Untapped millions waiting to be claimed for post-secondary savings
- Tiffany Head | June 13, 2015
Many Aboriginal youth do not have a post-secondary education savings plan set up for them.
Countless parents encounter barriers and believe that the funding from the government through the reserve band or tribal council is all that there is, but there is much competition to get that funding.
Recently, at the closing event of the Truth and Reconciliation Commission, an announcement was made that there were new partnerships that had been formed by non-profit organizations, academic institutions, private and private and community foundations and financial institutions.
These partners want to raise awareness of the Canadian Learning Bond (CLB) that is largely untapped by Aboriginal people and encourage them to participate in taking the money that is there for their children’s future. It is a part of the ongoing efforts to make reconciliation a reality in Canada.
A rough estimate suggests that as many as 200,000 Aboriginal children are eligible for the CLB and that this number is likely to grow as Indigenous populations increase,” said Stephen Huddart, President to the J.W. McConnell Family Foundation.
The CLB is a bond offered by the Government of Canada. It gives low-income families an opportunity to start saving for their children’s post-secondary education through a Registered Education Savings Plan (RESP). Only 30% of Aboriginal people have claimed their CLB.
The CLB is a kick start contribution into a RESP and can be received by eligible children with no requirement for contributions by their families. The RESP consists of a $500 initial contribution, with an additional $100 per year until the child turns 15 to a maximum of $2,000 per child.
The RESP savings grow tax-free until they are withdrawn to pay for full- or part-time post-secondary education (PSE). The fund can also be supplemented by other provincial and national education grants.
“We know that Aboriginal people with higher education earn greater incomes, and that salaries increase dramatically with post-secondary degrees,” said Dian Roussin, Executive director of the Winnipeg Boldness Project.
“By encouraging early planning and savings for a child’s post-secondary education we can dramatically improve educational outcomes.”
Studies show that only 45% of high school students without savings for post-secondary education enter a post-secondary program, and further, that only 7% of those actually graduate.
This is a stark contrast to students with at least some savings, whereby they are 3 times more likely to enroll and 4 times likely to graduate.
Requiring a social insurance number that numerous Indigenous children may not have or requiring access to a bank or credit union in the community are some of the barriers that Indigenous parents have in accessing the CLB.
To facilitate the CLB, the partnership is led by a number of national and local non-profit community organizations. Its members include:
- The J.W. McConnell Family Foundation
- National Association of Freindship Centres
- Winnipeg Boldness Progject
- Inspirit Foundation
- Community Foundations of Canada
- Martin Aboriginal Education Initiative
- Vancouver Islanda University
- SmartSAVER, an national program operated in partnership with BMO
- Meridian
- RBC Royal Bank
- Scotia Bank
- TD Bank
- Vancity
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