For generations many parents believed that sending their child to a top university was the ultimate goal as graduating from a top school would enable their child to write their own ticket to success.
That was then and this is now. Times have changed and students today have a multitude of options and choices when it comes to post-secondary education. Other than university, there are plenty of different types of programs and schools. As a result, Registered Education Savings Plans (RESPs) payout rules have changed to become much more flexible.
RESP rules allow your child to use their education funds for any program that qualifies under the Income Tax Act (Canada). In fact, any program of three consecutive weeks or more in Canada is eligible, including university, community college, trade school, vocational, technical, religious schools, part-time studies and correspondence. You can check this list of designated educational institutions to look up a specific institution or simply get an idea of the immense number of institutions in Canada that your child’s post-secondary education can be funded through your child’s RESP.
If your child wants to pursue their post-secondary studies at a school outside of Canada, they can still use their RESP to pay for it. Any eligible university program outside of Canada of three consecutive weeks or more is eligible and any other eligible post-secondary program abroad needs to be thirteen consecutive weeks or more.
While universities are incredible places for higher learning, times have changed and students have many options available to them. RESP rules have adapted to accommodate this change with increased flexibility and pay out rules. When the time comes, your child will have many options available to them and will be thankful that you had the foresight to plan ahead.