[FrugalTrader]

Hey guys, I got an email from a reader that I could use some help with as I'm unfamiliar with OSAP rules. Here it is:

How do you know how much money to take out of the RESP without affecting your OSAP negatively? We have some money in RESP but not near enough to finish university and we are a low income family.

Any thoughts?

 

[MoneyGal]

I googled "OSAP estimate" and was taken right to a Ministry of Colleges, Education and Training site which provides a detailed calculator of expected OSAP.

From that site:

Your financial aid through OSAP is based on a formula that compares your educational costs to expected contributions from your parents/spouse (if applicable) and your own assets and income, including the amount of RESPs you have cashed-in for the school year.​

I don't mean to be overly snarky, but...do people just not like to Google things? That search took me less than a second, eh?

 

[HaroldCrump]

I'm years away from that situation, however, just based on friends whose kids are going through that stage now - if there is any money in RESP and if the student lives with his parents and they are reasonably well-off, you can forget about OSAP aid.
It is all about convincing the student aid counselor that you have no money of your own, no RESP and your parents have essentially kicked you out and disowned you.

 

[FrugalTrader]

I just found an interesting site: (http://accesswindow.osap.gov.on.ca/aw/ENG/not_secure/resp_text.htm)

When you apply for OSAP aid, you are asked to provide the amount of your cashed-in RESPs. The value of the cashed-in RESPs is compared to the amount your parents are expected to contribute to your educational costs:

· If the cashed-in RESPs are less than your parents’ expected contribution, the RESPs are not included in your assessment.
Example:

Your parents are expected to contribute: $2,000

Cashed-in RESPs: $1,100

Difference: $ 900

RESP amount included in your OSAP $ 0

· If the cashed-RESPs are greater than your parents’ expected contribution, the difference is included as an extra financial contribution in your OSAP assessment.
Example:

Your parents are expected to contribute: $1,000

Cashed-in RESPs: $1,500

Difference:$ 500

RESP amount included in your OSAP assessment: $500