Alberta's education grant program needed for low-income families, says advocate

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Free money isn't easy to come by and time is running out to get a free $500 from the Alberta government.

This isn't a joke.

The NDP government is going ahead with the cancellation of the Alberta Centennial Education Savings (ACES) grant effective July 31. This grant provides $500 to any Alberta family with a child under six who was born or adopted between Jan. 1, 2005, and March 31, 2015. Parents can use the money to contribute to a Registered Education Savings Plan (RESP) for their child.

ACES is being cancelled without provincial legislation approving its cancellation and without much debate inside or outside the legislature. That's disappointing because the NDP committed to maintaining the grant during the election campaign.

Cancellation comes at a bad time for parents

The ACES grant was introduced through legislation back in 2005 to much fanfare. It was Bill 1, the flagship bill for that session of the legislature. The program was also the first of its kind among the provinces. British Columbia and Saskatchewan have now introduced grants of their own. Meanwhile, Alberta is moving backwards.

Given the cost of post-secondary education in Alberta, $500 may not seem like much. However, interest on that money over 18 years, plus other available grants and bonds, can make this add up quickly — especially if parents contribute money of their own into the RESP.

As little as $3,000 saved can change the perspective of a child from thinking that post-secondary education is out of reach to making it a realistic goal.

With Alberta's high school dropout rate higher than most provinces at 24 per cent, why not keep a grant that will both reduce this number and increase post-secondary enrolment?- Mike Brown

Children with an RESP are up to six times more likely to complete high school and move on to post-secondary education, says a study by Momentum. With Alberta's high school dropout rate higher than most provinces at 24 per cent, why not keep a grant that will both reduce this number and increase post-secondary enrolment?

That is the million dollar, or perhaps $500, question.

Why is the grant being cancelled?

That's a difficult question to answer. The program does not come at a large cost: only $18 million per year.

The province contends that there has been a two per cent decline in RESP participation between 2005 and 2010. But this is, of course, at a time of rapid population growth in Alberta.

It also may be true, as the government contends, that only 17 per cent of grants have been issued to families on low incomes. But the goal of the program was not just to support low-income families. It was for all Albertans.

If you look at the total uptake, the numbers for ACES are solid. Grants more than doubled between 2008 and 2013. In that same year, a third of Alberta families took advantage of the grant. With better promotion of the program, that number could be even higher.

Parents see the value in education savings

Parents are also contributing more into RESPs. Assets invested in RESPs across Canada have grown from $18 billion to $40 billion in the last 10 years, according to 2013 federal government review of the program. 

So if parents are enthusiastic about education savings, then you might ask why a grant in Alberta is necessary?

It encourages the good habit of saving money. When grants or other incentives are introduced, people are more likely to save. Roughly 97 per cent of families on low incomes who have an RESP are contributing their own money on top of government grants, according to a university study in 2014. 

Several international studies have shown that 25 per cent of children raised in poverty will remain in poverty throughout their life. A post-secondary education is a proven way to end this poverty cycle.

With the provincial government developing a poverty-reduction strategy to end child poverty, promoting education and RESPs ought to be a part of that.

Ending the grant program should be debated

Given that the ACES grant was introduced through legislation, it should only be cancelled through legislation. The program is ending without the direction of the Alberta Legislature.

If the current government agrees with the former PC government on the ACES cancellation, then it should be debated in the fall sitting of the legislature, in order to consider the grant's value to Alberta families and the post-secondary aspirations of Alberta's children.

By cancelling the grant on July 31 without debate, the government is preventing Alberta families from accessing the grant before the program is properly ended.

Your time to get money to help with your child's education is running out.

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