Sunday, February 20, 2011

Free Money for University

Executive Director of The Omega Foundation in Toronto, May Wong, told me via Skype last week, "The exciting challenge for philanthropy is figuring out how to invest in people's self-sufficiency." Their new financial literacy initiative called SmartSAVER aims to do just that in 14 languages.

The SmartSAVER initiative has one purpose: to let Canadians know that the federal government is offering free money for post-secondary education through RESPs (Registered Education Savings Plan) and has been doing so since 2004. The problem, says May, is that hardly anyone knows about it.

How to Get the Free Money

1. Check your eligibility. Your child must be born in 2004 or later AND your household income must be below a certain level. If you receive the National Child Benefit Supplement your family will likely qualify.

2.
Get a Social Insurance Number. Your child must have a Social Insurance Number. So must the child's parent or guardian.


3. Make an appointment. Choose an RESP provider and set up an appointment to open an RESP. You do not need to have any money to put in that RESP. Note that some providers charge an RESP set up fee but this will be reimbursed to you up to $25 by the federal government. These banks will set up your RESP for free: Bank of Montreal, TD Bank, Royal Bank, and Scotiabank.

4. Do the paperwork. At the bank you will fill out the paperwork to open an RESP, plus you will need to complete the application for the Canada Learning Bond and the "matching grant." With the matching grant, families that qualify for the Canada Learning Bond will also get  the benefit of having up to 40% of their RESP contributions matched by the government. (If your family doesn't qualify for the CLB, the RESP matching grant is to a maximum of 20%).
 
5. Wait. After the paperwork is done, it will take up to 9 weeks for a deposit of $500 (plus the $25 to offset the cost of setting up the RESP) to show up in your RESP account. Every year, another $100 will be put in that account until your child turns 15. If you are starting today, your first deposit will be bigger because the government will contribute an additional $100 per year going back to 2004.

6. Contribute. When you can, contribute a little bit of your own money to your child's RESP. The government will match what you put in up to 40%. So for every $10 you contribute, the government will add $4. You've got to love free money! Just remember that this money has to go towards your child's post-secondary education.

For more information about the Smart SAVER program or to make a tax-free donation to The Omega Foundation and help them spread the word about this free money for university, please contact May Wong at info@smartsaver.org.


 

Copyright 2011. Laura Thomas. All Rights Reserved.
For reprint permission contact money@agentstory.net.

2 comments:

  1. RESPs are a wonderful way to save for a child's education. I bought them for my kids and my grandkids. The extra money the government puts into them is a great bonus. Thanks for pointing this out Laura.

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  2. Agree with Darlene, RESP is no doubt the best program for education savings, you can get more details from http://knowledgefirstfinancial.ca/.

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