Guest Post: Province cancelling ACES grant for post-secondary education

Free money might sound too good to be true but if you have kids and apply before July 31, you can get a free $500 towards your child’s post-secondary education. This is available for all Alberta children under 6. After July 31 the Alberta Government is cancelling the Alberta Centennial Education Savings (ACES) grant. You can claim this $500 when you open a Registered Education Savings Plan (RESP) and watch it grow over time especially if parents contribute some of their own money as well.

RESPs and incentives to encourage parents to save are an important poverty reduction tool. Twenty-five percent of children raised in poverty will remain in poverty throughout their life. Education is one way to end this cycle. In addition, children with education savings, like an RESP, are up to six times more likely to complete high school and enroll in post-secondary education. As little as $3,000 saved can change the mindset of a low income child and make them see post-secondary education as an attainable, realistic goal. In a province like Alberta with an exceptionally high dropout rate anything that can be done to reduce this number and boost post-secondary enrollment is a good step.

What is more confusing about the government’s cancellation of this grant is that it hasn’t been properly cancelled. The current government contends that the program was cancelled by the previous Progressive Conservative government. However, as the ACES grant was introduced through legislation in 2005, in fact as the flagship Bill 1, it must be cancelled through legislation. Prior to the election call the PCs introduced a Bill to cancel the grant. It only ever received first reading. The new NDP government never reintroduced the Bill. During the recent election campaign the NDP, when asked about the ACES program, committed to keep it in place.

The new government will be ending eligibility to a legislated program without debating it in the Legislature and passing repealing legislation. If the program must be cancelled then why not do so in the fall after public and legislature debate? The $18 million annual price tag of the program is not so prohibitive that the government cannot push this deadline until proper debate and legislation can be had.

The program is being cancelled because of low uptake, especially among families living on low incomes, according to the government. However, the program was never meant only for low income families. Overall uptake of the program has more than doubled between 2008 and 2013 from 13.2% to 32.3%. According to the initial intent of the program it is successful. It creates the habit of saving money for a child’s education. Given the high cost of post-secondary education parents really do need to look at saving.

For now, those of you who are parents, go to your bank and open a RESP. Get this money before July 31. The government should extend the deadline until the proper steps for program cancellation have been fulfilled. Even then, ACES has a role to play in poverty reduction and should at least be available still for families on low incomes.

Mike Brown is Public Policy Coordinator at Momentum, a non-profit Community Economic Development organization in Calgary. His work includes research and writing on developing a poverty reduction strategy for Alberta and research into payday loans and predatory lending reform in Alberta.

6 thoughts on “Guest Post: Province cancelling ACES grant for post-secondary education

  1. Liam

    Yes, this sounds like some one needs to quickly advise them of the legislative requirements. Please do not make Boo, boos like this folks; keep it tidy.

    Reply
  2. Neil

    I’d like some supporting evidence to: “RESPs and incentives to encourage parents to save are an important poverty reduction tool.”

    My impression is that RESP grants are very much a handout to the well-off, since you have to have a little over $200/month kicking around in your budget in order to maximize your benefit. I feel like families with that much leeway in their budget are probably not very poor. What’s more, for someone who can make it happen, but barely, they may be sacrificing things early in childhood that could do a better job of setting their kids up for long-term success.

    Education as a poverty reduction tool is important, but it’s unclear to me that grants contingent on saving are the most effective use of tax dollars for achieving this.

    Reply
  3. Me

    Correlation is not causation.

    Those whose parents are well off can save more. Those whose parents are well off are more likely to achieve higher levels of education.

    That in no way makes this grant program a poverty reduction tool, and claiming it is is either a misstep in reasoning or politics at its worst.

    Reply
  4. Chris

    “The new government will be ending eligibility to a legislated program without debating it in the Legislature and passing repealing legislation.”

    There seems to be a lot of that going around these days in NDP Alberta. Can’t wait for the pixie dust coming in the next legislative session.

    Reply
  5. Blaine B.

    I am extremely disappointed that Notley and her NDP team have not changed this horrendous decision. At a crucial time in our provinces history we need to be investing in education and encourage more students to go off to post-secondary education (whatever form that may take (university, trades, etc.))
    It makes perfect sense to encourage families to save for their child’s PSE. This grant was one way. We don’t just need to keep this, we need to expand these type of grants to promote education.

    Reply

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