Over the past five years, the group scholarship plan industry in Canada has grown by 47%.
It now manages about $10.6 billion in assets for Canadian families saving for their children’s post-secondary education. This and other industry data was recently compiled by the RESP Dealers Association of Canada, which includes five member companies who represent approximately 90% of the industry.
The $10.6 billion invested in group education plans counts for nearly 30% of the $35.6 billion invested in all registered educations savings plans in Canada.
“The growth in assets of our members’ plans is keeping pace with the growth in RESPs generally, and that’s very gratifying,” says Paul Renaud, Chair of RESP Dealers Association of Canada.
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He adds, “Even though the economy has proven to be challenging and unpredictable these past five years, there’s no question families continue to see the huge value of post-secondary education for their children.
According to Stats Canada, the average for undergraduate tuition fees in Canadian universities was $5,366 for the 2011/2012 academic year, not including residence and other living costs.
For a child born in 2012, it’s estimated that a four-year university course, beginning in 2030, will cost between $85,000 and $136,000, depending on where the child resides throughout their schooling. Without savings built up, more Canadian families will find post-secondary education beyond financial reach.
Fortunately, Stats Canada has also reported roughly 70% of Canadian families are saving for kids’ educations, and more than 65% do so through RESPs, whether group or individual plans.
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Group plans are available through plan dealers and place peoples’ regularly scheduled contributions in a pool. The investments made with these assets are restricted primarily to more conservative fixed-income vehicles such as treasury bills, government bonds and GICs.
Individual plans can be obtained through the same dealers, but enable investment decisions to be made at the discretion of the plan holder.
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