It's never too early to start planning for your child's future post-secondary education, but with the rising cost of tuition fees, it's more important than ever for parents to start saving. Thanks to a new incentive from the Québec government, getting started is much easier.

According to Statistics Canada, university tuition fees in Québec for the 2008/2009 academic year increased 5.4 per cent over the previous year, the highest yearly increase across the country. The Québec government sees the importance of higher education and the need to help parents offset these costs, so it's one of the first provinces to introduce a provincially-based savings incentive called the Québec Education Savings Incentive (QESI).

Available through registered education savings plans (RESPs) such as the Canadian Scholarship Trust Plan, the QESI is a refundable tax credit that encourages Québec families to start saving early for their children's or grandchildren's post-secondary education.The tax credit for education savings will equal 10 per cent of the first $2,500 in annual RESP contributions. In the case of lower-income families, the tax credit could be even higher in any given year. The maximum lifetime QESI paid into an RESP for one child is $3,600.

An RESP is an education savings plan registered under the Federal Income Tax Act that helps families save for post-secondary education. Income earned on contributions grows in a tax-shelter until a child is ready to attend college, university or trade school.

"The introduction of the QESI is a very progressive step by Québec and an incredible opportunity for parents to supplement their RESP," said Peter Lewis, Vice President, Canadian Scholarship Trust Foundation. "CST is ready to help Québec families maximize their education savings by accessing this grant and reach their goals of sending their children to higher education."

The federal government offers additional support to help offset the rising cost of post-secondary education. Grants include the Canada Education Savings Grant (CESG), which adds 20 per cent of all contributions made to a maximum grant of $500 per year per child, or $7,200 over the life of the plan. Some families may also be eligible for an additional 10 or 20 per cent on the first $500 contributed each year, depending on their income.

Modest-income families can also benefit from the Canada Learning Bond (CLB), which provides a $500 bond for children who are born after 2003 and are eligible for the National Child Benefit (NCB) supplement - generally families with incomes under $39,000. Eligible children also qualify for annual $100 CLB installments until age 15 as long as their family is entitled to the NCB supplement.

Even if parents are unable to make regular contributions to an RESP, the plan and government grants earn interest until their child is ready to attend a post-secondary institution.

Talk to your local RESP provider today to find out how to access the QESI and what options are available for your family.

For more information about setting up an education savings plan, please visit www.cst.org or call 1-877-333-7377.

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Dane Gergovich
Media Profile
416-504-8464
dane.gergovich@mediaprofile.com