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No money to contribute to your kids’ RESP? No problem! If you have Children born after Dec 31, 2003 and making $38,832 or less (family annual net income), and have been receiving National child benefit supplement as part of the Canada child tax benefit(family allowance), just by open up an RESP account(even with zero money in it), Government of Canada will help you to start your education saving by contributing $500 plus $25 to cover the cost of opening the account in initial year, and $100 each of the following year up to age of 15, that’s $2000 of free money! The bond can be used to pay for full time or part time studies in apprenticeship program, a CEGEP, trade school, college or university.
Click on the link to see where you can open up and RESP account:
http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml
Next I will explain why you should try to open up a self-direct RESP account rather than a group RESP account.
For those that received OSAP for your post-secondary studies, you are required to repay your loan after your school year ends. Although you are not required to make payments until 6 months later, the interest is charged during the 6 months period. If anyone is planing to make a lump-sum payment, I recommend you don't wait after the 6 month grace period.
If you have trouble making the monthly payments after the 6 month grace period, you can also apply for Interest Relief Program.
Interest Relief is a program that government helps students pay the interest for 6 months, and you are allowed to apply continuously as long as you are qualified and within your 5-year end of study date. Keep in mind that the principal balance of your loan is remaining the same when you are on Interest Relief Program.
Who is qualified:
- Your student loan is already in repayment and consolidated(a signed consolidation form must return to the student loan center)
- You must reside in Canada on the day you sign the application
- Your loan account is up-to-date
- Your gross income for the month you want your Interest Relief to start on, must below the eligible income limit.
Ontario Interest Relief Application http://osap.gov.on.ca/eng/PDF/0506/34-1531.pdf
Ontario Interest Relief Income Eligibility Chart http://osap.gov.on.ca/eng/PDF/0506/Income%20Eligibility%20Chart%20-%20August%201%20%202005.pdf
