Using an RRSP to finance higher education

Tax-free RRSP withdrawals can also be made to assist you in financing full-time training or education for you or your spouse or common-law partner. Withdrawals are limited to $10,000 per year over a period of up to four calendar years and subject to a cumulative total of $20,000.

To qualify, you or your spouse or common-law partner must be enrolled or committed to enrol as a full-time student in a qualifying education program of at least three months’ duration at a designated educational institution. The full-time criterion is dropped for disabled students.

Withdrawals must be repaid to the RRSP over a maximum 10-year period starting in the year after the last year in which the qualifying individual was enrolled as a full-time student. However, the repayments must commence no later than the sixth year after the initial withdrawal, even if full-time enrolment continues. If the required repayment is not made, an amount will have to be included in income. As with many tax situations, special rules apply.