Saving for education

Lifelong Learning Plan (LLP)

What it is:

  • Individuals can borrow funds from their RRSP to finance their education.
Mature students studying in the library

Who can use it:

  • Individuals, or their spouse/common law partner, with RRSP savings.
Graduating mature student with wife

Main advantages:

  • Funds withdrawn from an RRSP as part of the LLP are not included in the participant’s income, and the RRSP issuer will not withhold taxes.
  • Generous repayment schedule: participants have up to ten years to repay funds withdrawn from their RRSP.
mature students with books

Potential limitations:

  • Funds withdrawn can only be used to finance education for the LLP participant or his or her spouse/common law partner.
  • Withdrawals are limited to $10,000 per calendar year and $20,000 in total over a four-year period. Withdrawals exceeding the limits are included in the individual's income.
  • Opportunity cost: Borrowing from an RRSP reduces the compounding growth benefits, and may result in lower savings at retirement.
mature students in university library

Special considerations:

  • Some RRSPs, for example locked-in RRSPs, do not allow for withdrawals.
  • To withdraw funds from an RRSP under the LLP, the individual must be a Canadian resident.