children in class

What is attrition?

If you have a group plan, attrition refers to the income left in the plan due to a reduction in the number of beneficiaries who qualify for Educational Assistance Payments in their beneficiary group. Whether they cancelled their plan or failed to apply for their EAPs, it means that there is a lower number of people that will be sharing the amount of money available for EAPs – thus providing you with an increased return and/or payment.

I keep reading about principal protection – what does this mean?

When we say that we provide principal protection, we are referring to investing your contributions in stable and secure fixed-income government bonds, so when your child is ready for school the principal will be returned to you at maturity. It’s one of our investment objectives and we’re proud to say that the CST Foundation has upheld its promise of providing principal protection throughout its 54 year history.

What is a unit? Why do you use units?

A unit is applicable to group plans only. It represents your child’s proportionate share of the Educational Assistance Payment (EAP) account. The number of units you have in your plan depends on how much, how often and for how many years you contribute.

We use units because it’s an easy way for us to tell you exactly how much you get when it’s time to collect your Educational Assistance Payments (EAPs). There is no set value for each unit, as it depends on the value of the EAP account for your child’s beneficiary group and the number of units that are held by the group.

What is an EAP account?

It’s an account that holds all the income earned on contributions from everyone who has a CST group plan. There is a separate EAP account for each beneficiary group, so if your child is eligible to begin their post-secondary education in 2016, for example, the income earned on contributions from all the other CST students of the same year will be included in that EAP account. The account also includes income earned on contributions from those whose plans were cancelled.

The money in an EAP account is distributed to students (based on the number of units purchased) once they’re enrolled in eligible studies at a post-secondary institution as part of their Educational Assistance Payments (EAPs).

What is an EAP?

An EAP is an Educational Assistance Payment. It's the payment that's made to the beneficiary after they’ve officially enrolled in eligible post-secondary studies at an approved school.

If you have a group savings plan, an EAP consists of the following:

  • Government grants and any income earned on your government grants
  • Beneficiary’s share of the EAP account (a pool of money distributed between students in the samebeneficiary group)
  • The group plan bonus

What are government grants and how do I take advantage of them?

A key feature that distinguishes RESPs from other registered or tax-deferred savings plans such as Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs) is access to government grants. The government offers incentives to save towards post-secondary education in the form of federal and provincial grants.

At CST Consultants Inc., we simplify the process by applying directly to the federal government and relevant provincial governments at your request. We encourage you to make the most of these incentives by managing your contributions effectively so that you can optimize this extra source of money.

For a full list of the grants that are available to you, please click here.

Are group plans geared towards low-income families?

Not at all. Our plans are a fit for families of all backgrounds. If you’re committed to saving for your child’s education and are looking for a hassle-free way to earn a competitive return, a group plan may be a great fit for you.

In particular, the CST Group Savings Plan 2001 works well for anyone who is able to make regular contributions and who wants the money to be there when their child needs it.

What is a scholarship plan and how does it work?

A scholarship plan is a type of investment fund. It’s specifically designed to help you save for post-secondary education. Once you sign up for a plan with CST and we have received all the necessary information including your and your child’s Social Insurance Number, your plan will be registered with Canada Revenue Agency (CRA) to become a Registered Educational Savings Plan (RESP), and will then qualify for government grants and other tax benefits.

When you open a plan with us, you have signed a contract. You have agreed to make certain contributions according to a set schedule (group plan only), and we invest this money for you. Once your child has enrolled at a post-secondary institution, you will receive your principal (which includes all of your contributions minus sales charges and fees) and your child will receive Educational Assistance Payments (EAPs) from us. The important thing to know is that all of the terms of the contract must be met in order to receive EAPs and all of the benefits associated with scholarship plans. Your contributions are not tax deductable and are returned to you tax-free. EAPs, income and grants are taxed in the hands of the child, who generally has a lower tax rate.

If you stick with your plan and your child doesn’t pursue post-secondary education, you still get your principal (contributions less sales charges and fees) back regardless.

Who are our sales representatives?

We have a range of people that sell our CST Plans from former beneficiaries of our plans to former clients, school teachers that have retired, and business leaders in their respective communities. All of them have one thing in common; a profound belief in ensuring every Canadian child has access to a post-secondary education.

What is CST’s business structure? Do all Sales Representatives work out of the head office?

Our Sales Representatives are registered to sell Canadian Scholarship Trust plans through their branch. Our head office (CST Consultants Inc.) oversees the distribution and administration of our plans, and other day-to-day functions.