November is Financial Literacy Month, and while education costs continue to soar at more than twice the inflation rate, many families continue to leave millions annually in free RESP grant money on the table. Participation rates for eligible BC families remain at 38% for the Canada Learning Bond (CLB) and 54% for the Canada Education Savings Grant.
Based on these participation rates, parents collectively could be missing out on over $4.6 billion in their children’s lifetime.[i] Family Services of Greater Vancouver (FSGV) is aiming to change that. Through their free RESP workshops and one-to-one financial coaching sessions, families are learning how to take full advantage of the free money available.
“Families are often unaware they qualify to receive free education grants, without having to contribute any of money of their own”, says Murray Baker, Financial Facilitator and Coach with FSGV. “All that families need to do is open an RESP.” The low Canada Learning Bond participation rate, which is income contingent, suggests that lower income families are those who may be missing out the most.
Gemma Martinez, a single mom with a young son, attended an FSGV RESP info session. After attending, Gemma booked an appointment with the RESP coach and invited a friend. “The information shared about financial literacy was very useful for me. I really did not have any clue how to do the RESP of my son; where to go, and how to make it possible.”
A recent Vancity report: Earning While Learning found that not only do BC students graduate with higher debt than the national average, our province also includes a higher percentage of students working part-time while attending school, and they’re working a greater average number of hours each week.[ii]
The report also projected that based on the 15-year historic average, a student starting university in 15 years can expect to pay over $40,000 in tuition fees alone for a four-year degree.[iii] “It really underscores the importance of families taking advantage of RESPs and accessing as much in available grant money as possible.” Baker advises. “Early RESP planning can alleviate some of the financial pressure on a student, allowing them to focus on their academics”
Other findings on education costs and savings:
- In 2015 alone, B.C. families left close to $90 million in Canada Learning Bond (CLB) grants and close to $300 million in Canada Educations Savings Grants (CESGs) on the table. [iv]
- Over the 15-year period from 2000 to 2015, the average debt of student borrowers upon graduation increased 52% to $30,586 in B.C.; compared to only 32% to $26,819 for Canadian students overall during the same period.[v]
- From 1996 to 2016, tuition rates in B.C. increased an average of 4.1% annually[vi] – more than twice the average annual provincial inflation rate of 1.9% during the same period.[vii]
- The Canada Learning Bond provides an initial grant of $500 and an additional $100 per year for up to 15 years to low income families.
- The BC government provides grants of $1200 per child toward their RESP. Parents must apply when their parents are between age 6 and 9.
Family Services of Greater Vancouver, through the support of Prosper Canada and community partnerships, offers free RESP workshops and one-to-one financial coaching. Contact 604 638-3390 ext. 3166, or firstname.lastname@example.org to book a workshop or appointment. Or connect with us on Facebook where we post upcoming workshops.
Murray Baker is a Financial Facilitator and Coach – Financial Empowerment, with Family Services of Greater Vancouver, speaker and the author of the bestseller The Debt Free Graduate; How to Survive College or University Without Going Broke, now in its 14th edition.