Tapping into opportunities for the students of tomorrow:

Benefits of the RESP

Under the program, both subscriber and government contributions can grow tax-free until the funds are withdrawn to attend an accredited post-secondary institution. Many employers  recognize a post-secondary education (PSE) as a pre-requisite when hiring. Specialized educational achievements are seen as indicators of a candidate’s ability to perform at a high level not only on the job, but also to successfully navigate the challenges of dynamic, modern workplaces.

Increasing cost of education

From 1989 to 2009 tuition fees in Canada more than doubled causing the levels of student borrowing and associated debt to increase.

Existing barriers

Despite the numerous benefits offered by the RESP, many households are not taking advantage of this option. Unawareness of the RESP and the complexity of its definitions and processes were found to be factors for RESP enrolment complacency, especially for the low and middle income demographic.

Low Income Families

It is widely accepted that economically disadvantaged students in Canada are less likely to pursue a university education than students from well-to-do families. While the level of a household’s income may pose a barrier for a student to attend a post-secondary institution, the current financial crisis further hinders a family from saving for PSE through RESPs.

Student Loans

Student loans remain the primary source of funding for costs associated with PSE such as living expenses, tuition and textbooks. In 2008, the average student debt upon graduation increased to $15,466 from $11,250 in 2000. While students may still need to rely on loans, bursaries and scholarships to finance their PSE, RESPs can make a significant impact and reduce the level of overall student debt.

Raise Awareness to the Benefits of RESP’s

Collaboration between financial institutions and group scholarship providers, who can communicate the benefits of RESPs, may be one way to raise awareness and encourage greater participation.

To obtain more information read the complete,Article from the CGA magazine:

Discussion Questions:

1. Why are Youth from Lower-income Families Less Likely to Attend University?

2. Where would you obtain more information on RESPs?

3. Do you find that more students are working today to pay for their education?