How to best invest a student's loan?

[Frznrth]

Hi
My 18 year old son started university a few weeks ago.  We have enough to cover all of his expenses stashed away in an RESP - we are in Canada - so he didn't need a student loan but I encouraged him to apply as I know he will automatically get a bit forgiven as a bursary and we would have the chance to invest it.   

He got around 10k for this year and will likely get about the same for each of the rest of his 4 year program.

I'll get him to open up a TFSA and likely a direct investing account with the Royal bank - unless there are better places.

Should it all simply go in to a safe guaranteed GIC? or an index fund?  or a managed mutual fund? or???

I get the idea that when your young your investments "should" be more on the "risky" side but it didn't work out for me - but then again after I lost I simply got out of the market and paid off my mortgage and saved for my kids schooling (besides spending some now that I look back a bit foolishly)   I would hate for him to graduate and then not have that money sitting there to pay back the loan - more likely I would feel so bad I'd pay it off for him.  But I don't want him to miss seeing what a good investment could do for him in the future - or is boring old safe GIC's the good investment?

Thanks for your help.

[Freedomin5]

If it's a bursary or grant that does not need to be repaid, then I would put it in a "riskier" investment like an equity index ETF or low MER index fund. However, for the portion of the loan that needs to be repaid after four years, then I would definitely put it in somewhere safer, like GICs. His "riskier" investments can also be from savings from his first job after graduation, or from part-time work during university.

[Frznrth]

The bursary part will be small - about $500 each year.  Enough to bother with in a fund?