Will your child be able to afford university?



The simplest, most efficient way to prepare is by opening a Registered Education Savings Program (RESP).

How much do you think a 4-year post-secondary education costs? $30,000? $40,000?


The actual figure is over $50,000. And that’s just today. For a child born in 2010, it’s been suggested that university tuition and accommodation could top $130,000.

But there are ways to prepare.

And the simplest, most efficient way to prepare is by opening a Registered Education Savings Program (RESP).

Meridian offers parents (and grandparents) the following ABCs about RESPs:  

  1. Start an RESP as soon as possible. You can open an account with as little as $20.  All you need is a SIN (Social Insurance Number) card for your child. And remember, the sooner you start, the greater the advantage of compounding your savings over time.
  2. Investing in an RESP is a wise investment option and arguably the best way to save for post-secondary schooling. RESPs can be supplemented with a variety of government grants including the Canadian Education Saving Grant (CESG) and the Canada Learning bond. The CESGs are a government contribution equal to 20% of your annual RESP contribution, to a maximum of $500 per child per year and to a lifetime maximum of $7,200 per child.
  3. Does your teen have dreams of attending university abroad? Not a problem! There are literally thousands of International schools – from junior colleges to Ivy League – that qualify as educational institutions for your RESPs. You can visit www.canlearn.ca to find a list of institutions.
  4. When RESP grants and earnings are withdrawn, payments are taxed in the hands of the beneficiaries upon receipt. However, since the beneficiaries are students, they will typically have little other income and they should, in most cases, pay little or no tax on these funds.
  5. You’ve been saving for years and now your child doesn’t want to go to school. Okay, so you have to refund all of the grant dollars received – but not the growth! You take out all of your invested capital tax free, and take the growth out as taxable income. Or if you have an RSP with contribution room to spare, simply move your RESP to your RSP as a contribution to offset the tax liability.
  6. RESPs can remain open for up to 36 years, so even if your graduating secondary school student isn’t keen to go to university or college right away, you can push the date of attending a post-secondary institution forward until your student has a clear goal for their future.


To learn more about RESPs, find your nearest branch.

Meridian Credit Union