Comments on: Interesting Report on RESPs

By: Lack of flexibility a big problem with Scholarship RESP Plans | MoneySense

Lack of flexibility a big problem with Scholarship RESP Plans | MoneySense — Tue, 02 Nov 2010 13:50:50 +0000

[...] Interesting Report on RESPs [...]

By: Carl

Carl — Mon, 10 Nov 2008 09:02:41 +0000

Thanks for the link to the report. Quite a good read! I’ve been reading intensly on the subject since friday, and didn’t know what was the best financial product to use. I’ve been offered CST and Heritage plans, but after reading both prospectuses and this report, I’m going to go for a self directed RESP through a direct brokerage account. At least I’ll know what my kid is going to get at the end (ok… it will depend of my choices of investments, but I’ll know why he gets more or less…), something I couldn’t be able to know with CST or Heritage even after reading the report!

By: RESP

RESP — Sun, 21 Sep 2008 12:38:58 +0000

RESP can be self directed. Usually the best option if you know what your doing.

By: Labour Day Weekend Roundup - Aug 31, 2008 | Million Dollar Journey

Labour Day Weekend Roundup - Aug 31, 2008 | Million Dollar Journey — Sun, 31 Aug 2008 10:32:14 +0000

[...] Canadian Capitalist has an interesting report on RESPs. [...]

By: Four Pillars

Four Pillars — Thu, 28 Aug 2008 12:23:43 +0000

Ed – great points about the expectations.

As far as grants go – what if the low-income student could determine early on (ie grade 11) that they will qualify for funding for PSE. That might help encourage them.

By: Ed

Ed — Thu, 28 Aug 2008 11:46:52 +0000

Four Pillars – having worked a little in Student Financial Aid policy, the benefit to setting up an RESP for your kids goes far beyond the CESG. The research shows that the biggest determinant of whether or not a kid goes on to post-secondary education (PSE) is parental expectations – not financial means.

The idea behind the CESP is that having an education fund around predisposes kids and their parents towards PSE. In other words, if you’ve been conditioned to think you’re going on to university or college all your life, you’re much more likely to go than if the first time you think about it is when you talk to a guidance counsellor at age 17.

Incidentally, giving “money to students who are actually going to school (or about to) in the form of grants/scholarships” would just exacerbate the problem that you’ve identified (e.g. the aid flows to upper income families).

By: florch

florch — Thu, 28 Aug 2008 07:07:15 +0000

RESP’s can be self-directed, mine is.

By: charlie A

charlie A — Thu, 28 Aug 2008 02:16:34 +0000

My main issue with RESP is that they are not self directed.

By: Canadian Capitalist

Canadian Capitalist — Wed, 27 Aug 2008 17:33:11 +0000

florch: It is definitely worth asking if the costs of administering a program that has paid out $24 million so far can be spent in other areas.

Chuck: It’s interesting that RESP funds are matrimonial assets (makes sense). One other reason why flexibility is so important. I haven’t seen anything so far to convince me that group plans are superior. The advantages of attrition are eaten up by the costs, so a self-directed plan is likely as well, if not better.

Mike: As a public policy, CESG is definitely questionable. Most of the people who participate will save for their kids education regardless. But I doubt it is going away.

I think (I may be wrong) “participation rate” means the percentage of children who have ever received a CESG, not necessarily in 2006. In that light, 35% is pretty low.

By: florch

florch — Wed, 27 Aug 2008 15:35:34 +0000

There are a number of ways that low income earners can help themselves and leaving free money on the table is very telling as to why they are low income in the first place. You can read that however you like. Each way you read it possibly applies to a different reason or excuse. Maybe some don’t know, maybe they’re too lazy, don’t care, or don’t value education.

The part about 35% participation rate may be encouraging, but doesn’t say how much they contribute or for how many years.