Looking at the financial aid system in Canada, it seems that significantly more aid is available for those who do not have savings or lack the ability to directly pay for their education.

As a member of the (lower) middle-class, it looks to me like, without significant savings on my part, my children are going to be much more likely to be able to receive grants, scholarships and other assistance with their fees when entering university. The expected university expenses may, in the end, be much lower. If I invest, instead, in reducing my debt (car loan and mortgage), it looks likely I'll be able to provide a close to equivalent funding for the university education by obtaining loans when my children enter school, rather than by saving the money in advance.

So, is it advisable that I save for my children's education in Canada, instead of paying off debt and gaining room for a future loan?

1 Answer 1


At the very least I'd look closely at what you could get from the RESP (Registered Education Savings Plan). Depending on your income the government are quite generous with grants and bonds you can get over $11,000 of 'free' money if you qualify for everything

CESG - Canada Education Savings Grant By applying for the CESG, up to $7,200 can be directly deposited by the Federal Government into your RESP. The Canada Education Savings Grant section offers information about eligibility requirements for the grant as well as how to use it when the beneficiary enrolls at a post-secondary institution.
CLB - Canada Learning Bond CLB is available to children born after December 31st, 2003 if an RESP has been opened on their behalf. Browse the Canada Learning Bond section to find out who is eligible, how to apply, and how much the Government of Canada will contribute to your RESP.

I can recomend the TD e-series funds as a low cost way of getting stock market exposure in your RESP

So if I were you...

  1. Go to TD and open an RESP
  2. Apply for the CLB, this gives you an initial $500 then $100 every year until your child is 15
  3. Apply for the Basic CESG (20% on your contributions capped at $7200)
  4. Apply for additional CESG is your family income is less that $83k

As an example if you earn $40k and you pay in the minimum amount to get all the grants ($500/year, $42/month) assuming zero growth you'll have almost $14k of which $5.4k would have been given to you buy the government, if you can afford to save $200/month you'll get over $11,000 from the government

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