For my regular readers you have read along with the epic saga of the RESPs that I had opened, used, and depleted for my oldest daughter (and the journey continues for my other two daughters). RESP the end game is quite simply the collapse of the RESP that you set up to pay for your child’s education.
At the end of this post I will include a link to many of these posts (or you could search my site for RESP as well). This drama would make Shakespeare or Homer proud, with its twists and turns, rules, forms and frustrations, however for my oldest daughter her Post Secondary Odyssey is complete (for now).
During her 4 year journey, she applied for Student Grants along the way (and actually received a few), however, the system (in Ontario) is such that you cannot receive OSAP (no not the Ontario Stereo Assistance Program) Grants without taking the Loans as well. I argued a few times with different disembodied voices on the phone (who used a tone which suggested I was either insane, a crackpot or just plain uniformed) that this was the case, if your daughter deserves a Grant she must also take the Student Loan as well. I would equate that to Homer’s Medusa in terms of dramatic silliness.
Every year after first year, each student who received a loan, receives a letter from the National Student Loans Service Centre saying, “It’s time to pay back your loans! (unless you went back to school, then you can ignore this letter)”. Each year we dutifully ignored that letter, until this year, and now the letter includes a plethora of forms on how to set up paying back your student loans.
Luckily with my daughter we actually put her loan money aside, to pay off the loan as soon as it became due, so I (or my wife more likely) dutifully started reading through the forms to figure out how to do this exact thing (i.e. make a lump sum payment to pay off the loan). This is not as easy as  you think. It seems easy to do, after you have made your first “installment” (where installment is a direct withdrawal from an account you have nominated, complete with a monthly interest charge accrued in that as well).
Here is where I now stand, I am attempting to have my daughter pay off her loan, without actually paying any interest charges, however, it is not clear how to do this. There is a question into the NSLSC folks asking that exact question, and after investigating on the TD Bill Paying portion of my on-line banking NSLSC is actually there to make payments too, so I am hoping, we can simply make this lump sum payment directly onto the loan, and thus it is all over and dealt with.
Am I confident this will be the case? No, my guess is my daughter will end up paying at least 1 month in interest charges while the system answers questions or gives confusing answers that foil our attempt to not pay interest, but hope does spring eternal.
Anybody else have any luck with all of this?
Some older RESP Posts from the Past:
- Canada Learning Bond and RESPs, where I think I have figured out more money, that I have never actually ever received thanks to TD not doing what I think they should.
- RESP and more tree died (which they did this year too), which is last year’s installment on the entire RESP saga.
- RESP Wrinkles where I first learned taking out money from an RESP wasn’t going to be as easy as the previous year.
- RESP Money to get Money where I found out how much it cost to prove I just spent $2500
- RESP: The Old Switcheroo where I rant about one Universities trick for getting more money out of me
- RESPs and Rules taking your own money out shouldn’t be this hard, should it?
- RESP: Withdrawals Redux then I learned that call centers and local branches do not talk nor really acknowledge each other’s existance
- RESP: This Round Finally Ends (Prologue)Â I actually try to start taking money out of the RESP
- RESP: Lessons Learned it’s important to write down what you have learned so you remember it for the next time.
- RESPs and High Mutual Fund Fees points out that so many RESP providers rely on you buying their High MER funds.
There are others simply search for RESP on my search block and you will see them.
Ahh… student loans. I remember the hell that was. The only year I really needed they money was my first year, when, of course, I received nothing. I appealed multiple times (even to my MP) to get a total of $500. It’s a good thing my parents were able to dig a little deeper. The second year I got a full ride for some reason. The third year I was well into my co-op program and happily paying for everything myself (I studied computer science during the tech boom — times became good for me). I didn’t want any more loans, though I couldn’t afford to repay what I had already borrowed, so I “kept the interest free period going”. This proves to be much more difficult than just taking more money.
Every term I ventured into Needless Hell (Needles Hall, UofWaterloo) to get my signed forms. Yes, form”s”. The Ontario and the Canadian programs require independent proof of enrolment. “Good news!”, I was told. I only need 1 form this year because the Canadian form is “stronger” than the Ontario one and will be accepted for both loans. I’m sure you know where this is going. Yup. I received the nasty letters from the Ontario program stating that my loan was past due.
Amazingly, the loan people (at the provincial centre) were actually quite helpful. Just get the form, send it in, and they’d make it all go away. The University *refused* to sign the form. “Sorry, we don’t back-date forms”. No amount of “if I weren’t enrolled, how could I have earned 5 credits” questions could convince them to do the right thing. All this person would say was that “we’re signing only for this term”. Taking a long shot, I asked for the signed form, which she signed. I couldn’t have the form for when I was enrolled, but they had no problem signing for when I was not actually in class.
Apparently, “we’ll take care of everything” means “you’ll still be on the hook for the $72 of interest you accrued between leaving class and sending in the form you were told you didn’t need.”
This is already too long, so I’ll spare you the saga of the following three years and the quest to repay the loan before it finally came due. The best part was driving to the branch to finally close all of my accounts. When asked why I was leaving The Royal Bank, I told them. In a loud voice. In front of all of the other students looking now looking pretty nervous. The best part was being told that “I wouldn’t be happy moving to PC Financial” because “they don’t have tellers”. I smiled and politely informed them that the lack of tellers was the main reason I was leaving.
I heard an interview on the radio later that week (from the CIBC, I believe) that they have to change the way they handle student loans because a student with a loan is a lost customer forever.
My daughter is now 3 and has a growing RESP. I really don’t need this again.
Another saga, wow, thanks for sharing!