Education planning definitions

Money withdrawn from a Registered Education Savings Plan when the child declines a post-secondary education. This type of withdrawal has tax implications to the subscriber.

The expected return of an investment that is calculated as a percentage of the total amount invested.

The individual who will receive payments from the Registered Education Savings Plan towards a qualifying post-secondary educational program.

Through the Canada Education Savings Grant (CESG), eligible contributions to a Registered Education Savings Plan can qualify for a grant from the government. The CESG is available to Canadian children under the age of 18 based on certain rules and restrictions.

The Canada Learning Bond (CLB) is designed to help families start saving for post-secondary education earlier. There are eligibility rules and restrictions which can be found on the Service Canada website.

Any withdrawal from a Registered Education Savings Plan that is not a post-secondary education withdrawal. Government grant money received on the contributions being withdrawn must be returned to the government at the time of the withdrawal.

When a student enrolls in a qualifying program, the subscriber can withdraw money from their Registered Education Savings Plan to help pay for their education. These withdrawals are called Educational Assistance Payments (EAP).

The promoter pays the contributions and the income earned on the contributions to the beneficiary of the Registered Education Savings Plan.

A Registered Education Savings Plan (RESP) is an account that is registered with the Canadian government that allows a person (subscriber) to save for a beneficiary's post-secondary education. Contributions grow tax-deferred and may qualify for a match from the government up to certain lifetime and annual limits.

The subscriber will set up the Registered Education Savings Plan for the beneficiary and will generally make contributions to the plan. Contributions cannot be deducted from a subscriber’s income.