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Four alternatives to RESPs

Last week, I wrote about registered education savings plans (RESPs) in a column, The Ins and Outs of RESPs, for Canadian Business Online. In this post, lets look at other ways for parents to save for their childrens post-secondary educational costs. A key attraction is fewer restrictions, so they could be replacements, or useful complements, to RESPs.
1. In-trust accounts
Oneis informal in-trust accounts. Interest income is attributed to the contributing parent but capital gains are taxed in the child’s hands so long-term growth investments are best suited for this vehicle. The benefit of in-trust accounts is no limits on contributions plus flexibility in how the funds are used for example, if the child wants to start a business instead of go to university, they are free to choose that option.
2. Invest child benefits
Another alternative is to invest the Canada Child Tax Benefit (CCTB) and Universal Child Care Benefit (UCCB) within a non-registered account. Income earned from investing the CCTB/UCCB is not attributed to the parents but to the child. MoneySensetells the story of one momwho created an $85,000 education fund this way.
3. Get a job with a university
Yet another option is to get a job with a university that offers free, or reduced, tuition to children of employees. An in-law of mine got hired at a university last year and confirms her offspring wont have to pay tuition fees there. If you dont have the credentials to join the academic staff, there are positions in administration, physical-plant and other support functions.
4. Raise your children well
Of course, if you bring up your children to get good marks and to be self reliant, they may be able to finance most of their university education through scholarships, part-time work and summer jobs.