Our financial adviser just called us, and it got me thinking about RESPs. Most people come out of university (or any post secondary education) with student loans. Student loans are a bitch and, if they are the government loans that most students in Canada get, can take 10 years to pay off at a rate of prime + 5%. In the meantime, these ex-students get married, have kids, and can barely afford to put money into their kids' RESPs because they are spending hundreds of dollars every month paying off their loans.
In our case, my husband had a mere $10,000 loan for 6 years of university (he's smart and got a whackload of scholarships). Be that as it may, his loan payments were amortized over 10 years and the payments were to be over $100 a month. That's a piddly loan comparison to most people. I'm sure most people are paying over $300 or $400 a month to pay their schooling off.
Here's my idea: give some sort of cut or lower interest rate to loan-payers who are contributing to an RESP. Really, by contributing to the RESP, you are trying to ensure that your child will not have to take out as large of a loan as you did, so you are helping the loan company (government, bank, mafia) not have to lend as much of their precious money in the future. Makes sense, no?
I should run for office, I know. I'm just that good.
Hi, my husband is at $100,000 + and our student loan payments are going to be as high as a second mortgage for at least 30 years.
ReplyDeleteI think I just got an ulcer.
But good idea though!
Wowza. Can y'all not like refinance or something. Get a lower, fixed rate on a loan to pay off the prime +5 loan?
ReplyDeleteDon't pay attention to me...I really don't know what I' m talking about with Canadian loans.
You should run for office!!!! We thankfully got our load of college loans paid off a couple years ago. which freed up some moola.
ReplyDeleteI can't imagine what it's like for those who have to take out a loan for everything each & every year of schooling!
I wish I were only paying $400 a month! Ah, well. In 14 years our schooling will be totally paid of (and then we can start going into more debt by getting our Masters.) Hooray for higher education!
ReplyDeletethat's a great idea. after 4 years of school, i owed $32,000 CDN and was paying $400 a month. that sucked, since the job i got right out of school was paying $1500 a month and my rent was $860 a month...hmmm...not much money left for luxuries like food, heat, etc.
ReplyDelete