It’s no secret that post-secondary education is expensive. According to Statistics Canada, full-time undergrad tuition  averaged a whopping $6,693 for the 2021-2022 school year. And you can expect that number to rise over the coming years. This doesn’t even include expenses like books, clothing, housing, food, and transportation. And the expenses don’t always stop when your child earns a degree or diploma. They may pursue a graduate degree or professional program like law, medicine, or teaching.

You may be wondering if you’ll have enough money to help pay your kids’ way through post-secondary school. Yes, student loans are an option. But, they could become a financial burden your kids will have to carry for years. So where else can you turn?

Do you have close relationships with friends and relatives who are invested in your child’s future? If so, there’s ways they can help. 

How can you fund your child’s education?

Your friends and relatives may give your kids money on their birthdays. Or perhaps your parents plan to leave their grandkids an inheritance. These financial gifts can provide opportunities to talk to your family about your child’s education savings. They can also be a great way to educate them about registered educations savings plans (RESPs).

It’s a good idea to let your family and friends know about your child’s RESP early. Why? Because they can contribute to it whenever they want. But they can’t do that if they don’t know it exists.

Want to learn more about RESPs?

Start with understanding what they are and how they work 

Can friends and family contribute to RESPs?

Yes, they can. And there are two options to collect their contributions:

1. Collect money directly and put it in a family RESP

A benefit of a family RESP is that you have one plan for multiple children. If one child doesn’t pursue post-secondary education, the other kid(s) could still use the money. Having everything in one, consolidated plan also makes it easier for you to keep track of all the contributions.

Will all your children be eligible for grants under one RESP? Yes. The government bases the Canada Education Savings Grants (CESGs)  on how many beneficiaries exist within a plan. It’s not based on how many plans there are for a beneficiary.

To add children to an existing family RESP:

• they must be under age 21, and 
• step-parents must have adopted their stepchildren.

2. Relatives or friends can set up individual RESPs

If anyone wants to contribute regularly, they can set up an individual RESP for the child. They can then give directly to the RESP without having to connect with you each time.

However, it’s important to stay connected. Why? The lifetime contribution limit of $50,000 per child/beneficiary applies to the total of all plans. If you have multiple plans for the same child, people may end up over-contributing, maybe without realizing, and there is a penalty for over-contribution. If you want to follow this approach, it’s a great idea to work with an advisor to make sure all contributions are coordinated.  

What are the best times to crowdfund for an RESP?

It can be a great idea to ask for contributions at times where people are likely to give gifts to your children.

• Birthday parties. Add a note to birthday invitations that if guests would like to give a gift, they can add to your child’s RESP.
• Baby showers. If it’s not a surprise, ask the host to suggest that guests consider contributing to your child’s education. After your baby is born, you can deposit the money received into an RESP. Note that you can’t set up a RESP until your child has a social insurance number (SIN).
• Holidays. Ahead of the festive season, you could send a family email suggesting that cash gifts will go into your kids’ tuition fund. Or, if someone asks for gift recommendations, that’s a great opportunity to bring up the RESP.
• Graduations. What better way to celebrate this milestone than by investing in their academic future. CESGs are available for kids up until December 31 of the year the child turns 17. However, a child is to be only eligible for the grant at age 16 and 17 if you save in an RESP before they turn 15.

You might feel a little funny about asking. But your family and friends will love knowing that their money is going to a good cause.

Note that the subscriber – which is the person who opens the RESP – must be the one who makes the contribution to it, otherwise the contribution will not qualify for the Canada Education Savings Grant. The money that the subscriber contributes can come from someone else, like family and friends, but it’s the subscriber who must make the actual contribution. Also note that the attribution rules don’t apply to RESPs. Generally, the attribution rules require you to include in income any interest, dividends or taxable investment gains on money or property that you give to another person who is closely related to you, like a spouse or child. However, contributions grow in an RESP tax-free, and any investment gains on the money in an RESP are taxed to the student once paid out for education purposes.

How can you encourage family who hesitates to give to RESPs?

Some grandparents or relatives might think RESP contributions are a “boring” gift. Of course, there’s something magical about seeing a child eagerly open a new toy. Compared to toys that break and clothes they outgrow, RESP contributions make a useful and lasting gift.

Faced with such hesitation, you could suggest they give your child an inexpensive gift AND a RESP contribution. That way, they get to experience the joy of seeing the child’s reaction, and they can feel good about contributing to their education and future.

Prospr RESP investment options

Opening an RESP through Prospr gives you access to a range of investment options to help grow your savings for your child’s education. Whether you’re looking for growth potential, stability or added protection, a Prospr advisor can help you find options that fit your needs.

Here’s a breakdown of what’s available at Prospr:

Mutual Funds

When you contribute to a mutual fund, your money becomes part of an investment pool managed by professionals who buy stocks, bonds or other assets on behalf of the fund. These pools are invested in a diverse mix of assets such as stocks, bonds and other securities.

With mutual funds, you benefit from:

• wide mix of investments to help diversify your portfolio.
• Professional asset management.
• Flexibility to select funds that align with your specific investment goals, risk tolerance and preference.

Guaranteed Interest Products

For those who value safety and predictability, guaranteed interest products protect your initial investment while delivering steady returns.

Prospr by Sun Life can help you invest in two types:

• Guaranteed Investment Certificates (GICs): Your principal and interest are guaranteed, making them a low-risk option.
• Insurance GICs: Similar to GICs, but with added insurance benefits for enhanced security.

Investing in a GIC can be ideal if you’re prioritizing stability and capital preservation.

Learn more about Prospr’s investment options.

Whether you're looking for growth, stability or protection, opening an RESP through Prospr helps ensure you have access to investments that align with your family’s financial goals.

How can you get started?

Everything starts with a Prospr advisor. They have the right advice to help you build a savings strategy that works for you. There’s no cost to meet with an advisor. Simply book an appointment for a virtual meeting, or call us at 1-888-222-7957, Monday to Friday 8 a.m. to 8 p.m. ET.