Sources of funding for postsecondary education

Government student loans and grants – “Of the loans available, student loans are the best by far,” says Chartered Accountant Terri Heggum-Allen, a partner with Loftus Allen & Co. in Oakville. “If your child qualifies, the loans are interest-free until the child is finished school, and a portion of the amount may be a grant. There are many types of assistance available, so don’t assume you don’t qualify.” You can check out the Ontario Student Assistance Program (OSAP) at [url=http://www.osap.gov.on.ca]http://www.osap.gov.on.ca[/url]. Registered Education Savings Plans (RESPs) and the Canada Learning Bond – “RESPs are a good option for higher-income earners,” says Heggum-Allen. “The savings inside RESPs are tax-sheltered and the total RESP lifetime contribution limit for each RESP beneficiary is $50,000. The federal government will also contribute a Canada Education Savings Grant (CESG) to your child’s RESP.” Low-income families with children born after December 31, 2003 are also eligible for a federal Canada Learning Bond (CLB). “The CLB contributes $500 to an RESP in the first year and $100 for each subsequent year for up to 15 years,” says Heggum-Allen. More information about RESPs and the CLB is available at [url=http://www.canlearn.ca]http://www.canlearn.ca[/url]. Scholarships, bursaries and awards – “These aren’t just available to students with high marks,” advises Heggum-Allen. “They may be based on financial need or special learning needs. Talk to the financial assistance office at the college or university to see what your child is entitled to or can apply for.” Bank loans – “If you go this route, it’s usually better for the parents to take out the loan and lend the money to the child,” advises Heggum-Allen. “They will get a lower interest rate.” Trusts – “Grandparents or great-grandparents can contribute to their grandchild’s RESP, but they can also create a trust that will provide funds for their grandchild’s education when they die,” says Heggum-Allen. Student income – “Your children’s savings or summer job income may affect what they get in a grant or loan, so in some cases it may make more sense for them to go to school in the summer,” says Heggum-Allen. “Once the student has been out of high school for four years, he or she is viewed as an independent and will qualify for loans and grants.” Students can also save money on their postsecondary education costs by living at home and sticking to a budget. Talk to a Chartered Accountant – “CAs can help middle-income earners determine what grants and loans may be available,” says Heggum-Allen. “They can help higher-income earners set up a trust and help families decide what type of RESP will work best for them.”