Additional Financing Options
Student loans or lines of credit are available from most major banks and credit unions in Ontario. Interest rates and terms will vary by institution.
The Lifelong Learning Plan (LLP) allows students to withdraw up to $10,000 in a calendar year from their registered retirement savings plans (RRSPs) to finance full-time training or education for themselves or their spouse or common-law partner. Students cannot participate in the LLP to finance their children’s training or education, or the training or education of their spouse’s or common-law partner’s children. As long as students meet the LLP conditions every year, they can withdraw amounts from their RRSPs until January of the fourth calendar year after the year they made their first LLP withdrawal. Students cannot withdraw more than $20,000 in total. Students do not have to include the withdrawn amounts in their income, and the RRSP issuer will not withhold tax on these amounts. Students have to repay these withdrawals to their RRSPs generally within 10 years. Any amount that students do not repay when it is due will be included in their income for the year it was due. This chapter explains the conditions that students and the LLP student have to meet to participate in the LLP, and how to make an LLP withdrawal. The chart below summarizes the LLP withdrawal process.
The LLP Withdrawal Process: Who can participate in the LLP?
If the student is an RRSP owner and a resident of Canada, they can usually participate in the LLP to withdraw funds from their RRSPs for their own or their spouse’s or common-law partner’s education. Certain types of RRSPs, such as locked-in RRSPs, do not allow students to withdraw funds from them. The student's RRSP issuer can give them more information about the types of RRSPs that the student has. Students cannot participate in the LLP after the end of the year they turn 71. Students must be a resident of Canada when they receive funds from their RRSPs under the LLP. If students are not sure whether they are considered a resident or non-resident of Canada, or if they need more information about residency status, they can go to www.cra.gc.ca, or call the International Enquiries for Individuals and Trusts at one of the following numbers: 1-855-284-5942 (toll free within Canada and the Continental U.S.), or 613-940-8495 (from outside Canada and the Continental U.S.— accept collect calls).