Ontario Budget 2017: What it Means for Starting an RESP

What Ontario Budget 2017 means for families starting an Registered Education Savings Plan

Starting in 2018, families in Ontario will no longer need to worry about holding a Registered Education Savings Plan (RESP) when their students apply for the Ontario Student Assistance Program.  

The province made the surprise change to the OSAP reforms – announced in the 2016 budget – on April 27, stating that if students have an RESP, it will no longer affect the financial assistance they receive.

Tuition fees in Ontario are the highest in Canada – an average of $8,114 a year for a basic Bachelor of Arts and Science degree (2016/17 Statistics Canada), and $2,400 annually for a college diploma and $3,600 for a Graduate Certificate program (Ontario Colleges). These figures don’t include student fees and housing costs which can effectively double those costs, or more expensive programs such as engineering or firefighting. 

For families, especially those with lower incomes, that have resisted starting an RESP and taking advantage of RESP grant programs and the Canada Learning Bond (CLB) for fear they couldn’t qualify for OSAP, this is great news. 

Studies show that students who have an RESP are more likely to attend post-secondary education. 

With qualifying for OSAP no longer a barrier for some families, this should open the door to even more families participating in programs such as the Canada Learning Bond by starting an RESP. 

With the Canada Learning Bond, lower income families with children who start an RESP could receive $500 in the first year from the federal government and $100 per year for each year they qualify thereafter until the child turns 15, adding up to $2,000 towards an RESP.

Another relevant announcement made in the budget is that recent graduates can now wait until they earn $35,000 a year before they need to begin repaying the provincial portion of their student loan.

As well, mature students (anyone out of high school for four years or more) can receive the same access to OSAP support as younger students.  

These measures make it more manageable for students with RESPs to complete their studies and pursue a career without the financial pressures of immediate debt.