Going back to school can be a big financial commitment. Tuition, books, transportation and other expenses can add up quickly—especially if you’re also taking time away from work.

But what if you already have money saved in an RRSP?

The Lifelong Learning Plan (LLP) is a federal program that allows eligible Canadians to temporarily withdraw money from their RRSP to pay for full-time education or training for themselves or their spouse or common-law partner. Instead of making a taxable RRSP withdrawal, the LLP lets you access some of your retirement savings for education and repay the money to your RRSP over time.

But, just like the Home Buyers’ Plan, the LLP isn’t free money. You’re using savings that were originally intended for retirement, and you’ll generally have to repay what you withdraw.

Read What’s the Point of an RRSP? to learn more about how Registered Retirement Savings Plans work.

Why Does the Lifelong Learning Plan Matter?

Education can be expensive, but it can also be an investment in your future earning potential.

Maybe you’re considering a career change. Maybe you want to learn a new trade. Or perhaps you’re going back to school to improve your qualifications and open up new career opportunities.  You may have savings in a bank account, but using all of your cash could leave you without an emergency fund. You might qualify for student loans, but you may not want to take on additional debt. If you’ve been contributing to an RRSP, the LLP provides another option. Rather than making a regular RRSP withdrawal—which typically is taxable—the LLP allows eligible students to withdraw money under the program’s rules and repay it over time.

The LLP lets your RRSP serve another purpose

An RRSP is primarily designed for retirement. But life doesn’t always follow a straight line from school to career to retirement. The LLP recognizes that education and training can happen later in life.

For example, you might already have a career but decide to return to school at age 35 to qualify for a new profession. If you have money saved in an RRSP, the LLP may allow you to use some of those savings to help pay for your education. The trade-off is that you’re temporarily taking money out of your retirement savings.

How Does the Lifelong Learning Plan Work?

The LLP has specific eligibility, withdrawal and repayment rules. Understanding them before taking money out of your RRSP is important.

1. You need to qualify

The LLP is generally available to Canadian residents who meet the program’s conditions. You can use the LLP to finance full-time education or training for yourself, or your spouse or common-law partner. The student generally needs to be enrolled in a qualifying educational program at a designated educational institution.

There are also specific rules about whether you can participate if you’re already participating in the program or have an outstanding LLP balance.

2. You withdraw money from your RRSP

The LLP currently allows you to withdraw up to $10,000 in a calendar year, subject to the program’s rules. There’s also a $20,000 overall withdrawal limit for the LLP. However, you don’t have to withdraw the maximum amount. You can take out only what you need, up to the applicable limits.

This is important because withdrawing less means you’ll have less to repay later—and less money will be removed from your retirement investments in the meantime.

3. You use the money for education

The LLP is intended to help pay for qualifying education or training. That means you shouldn’t think of it as simply a way to access your RRSP without tax. The withdrawal needs to meet the LLP requirements. You’ll also need to keep appropriate records related to your education and LLP participation.

4. You repay the money

This is one of the most important things to understand about the LLP. Generally, you’re required to repay the amount you withdrew to your RRSP over a period of up to 10 years. Your repayment schedule begins after the applicable grace period.

If you don’t repay the required amount for a year, the amount you were supposed to repay may generally have to be included in your taxable income. In other words, the LLP is better thought of as borrowing from your retirement savings than taking a tax-free withdrawal.

Lifelong Learning Plan Example

Let’s say you have $50,000 saved in your RRSP and decide to return to school. You need $15,000 to help cover your education expenses. If you’re eligible, you could potentially withdraw $10,000 in one year and another $5,000 in a subsequent year, subject to the LLP’s rules and annual limits. You’d then repay the amount you withdrew according to the LLP repayment schedule.

The important point is that you aren’t simply taking $15,000 permanently out of your retirement savings – you’re using the money temporarily and are expected to put it back.

Common Misconceptions About the Lifelong Learning Plan

“The government gives me money for school.”

Not quite. The LLP doesn’t give you a government grant. You’re withdrawing your own RRSP savings. The advantage is that an eligible LLP withdrawal isn’t immediately treated as taxable income in the same way as a regular RRSP withdrawal.

“I can withdraw as much as I want.”

No. The LLP has annual and overall withdrawal limits. Currently, the maximum is $10,000 per calendar year, with a maximum of $20,000 overall under the plan.

“I don’t have to repay the money.”

You do. The LLP is designed around repaying the money you withdraw. If you don’t make the required repayments, the amount you were supposed to repay may generally be added to your taxable income.

“I can use the LLP for any course.”

Not necessarily. The education or training program and educational institution must meet the LLP’s requirements. Before withdrawing money, make sure your program qualifies.

“Using the LLP means I don’t have to pay tax on my RRSP money.”

Not exactly. The benefit is that an eligible LLP withdrawal isn’t immediately included in your taxable income. However, the money still came from your RRSP, and if you don’t repay the required amount, the unmade repayment can generally become taxable income.

“The LLP is the same as a student loan.”

No. A student loan is borrowed money from a lender. The LLP allows you to temporarily access your own retirement savings. That means there isn’t a traditional lender charging you interest, but the money removed from your RRSP isn’t invested there while you’re using it.

Benefits of the Lifelong Learning Plan

It can help pay for education

The most obvious benefit is access to additional money when you’re facing education expenses. That could make returning to school more manageable.

You don’t pay immediate tax on an eligible withdrawal

An eligible LLP withdrawal isn’t treated as taxable income when you take it out, unlike a regular RRSP withdrawal. That can make the LLP more attractive than simply withdrawing money from your RRSP outside the program.

You can use your existing savings

If you’ve already spent years contributing to an RRSP, you may have money available that could help support a major educational decision. The LLP can allow you to use some of those savings without permanently giving them up—provided you follow the repayment rules.

It can support a career change

Education isn’t just about getting a degree when you’re 18. Adults may return to school to change careers, develop new skills or qualify for a different profession. The LLP can provide another source of funding for that transition.

You aren’t taking on traditional debt

Because you’re accessing your own RRSP rather than borrowing from a bank or other lender, you’re not taking out a conventional education loan. However, that doesn’t mean there’s no financial cost.

Drawbacks of the Lifelong Learning Plan

The LLP can be useful, but it isn’t automatically the best way to pay for school.

You’re taking money away from retirement

This is the biggest drawback. Money in your RRSP has the potential to grow over many years. When you withdraw it, that money is no longer invested in the account. Even though you’re expected to repay the withdrawal, the money may miss out on investment growth while you’re using it.

Understanding how investing works can help you understand the opportunity cost of taking money out of a retirement account.

You have to repay the money

Returning to school can already put pressure on your budget. If you’re working fewer hours—or not working at all—during your education, adding LLP repayments later could make things more difficult.

Before using the program, consider whether you can realistically afford the future repayments. Read What’s the point of a budget? for tips on creating a budget that works for you.

Your RRSP may be smaller for a period of time

Even if you eventually repay the full amount, your retirement savings may follow a different growth path than they would have if the money had remained invested. The longer the money is out of the account, the more important that opportunity cost can become.

There are limits

The LLP isn’t designed to cover an entire education. With a current overall withdrawal limit of $20,000, you’ll likely need other sources of funding if your tuition and living expenses are significantly higher.

The rules can be complicated

There are specific rules around eligibility, qualifying programs, withdrawals and repayments. If you’re unsure whether you qualify, check the current CRA rules before making a withdrawal.

Lifelong Learning Plan vs. Regular RRSP Withdrawal

You might wonder why you would use the LLP instead of simply withdrawing money from your RRSP. The biggest difference is tax treatment.

A regular RRSP withdrawal is generally included in your taxable income for the year, and your financial institution will usually withhold tax from the withdrawal. An eligible LLP withdrawal, on the other hand, isn’t immediately included in your taxable income.

That doesn’t mean the money is permanently tax-free. The LLP has repayment requirements, and amounts that aren’t repaid when required can generally become taxable income. So, if you’re eligible, the LLP may be a more tax-efficient way to access RRSP savings for qualifying education than making a regular withdrawal.

Frequently Asked Questions About the Lifelong Learning Plan

How much can I withdraw through the Lifelong Learning Plan?

You can currently withdraw up to $10,000 per calendar year, subject to the program’s rules, with a maximum of $20,000 overall.

Do I have to repay money withdrawn through the LLP?

Yes. LLP withdrawals generally need to be repaid to your RRSP over a repayment period of up to 10 years.

Can I use the LLP for my spouse’s education?

Yes. Eligible participants can generally use the LLP for qualifying education or training for themselves or their spouse or common-law partner.

Can I use the LLP for any school or program?

No. The educational institution and program must meet the LLP’s requirements.

Is an LLP withdrawal taxable?

An eligible LLP withdrawal isn’t immediately included in your taxable income. However, amounts that aren’t repaid as required may generally be included in your income.

Can I use the LLP more than once?

Potentially, but there are rules about when you can participate again, including requirements related to your existing LLP balance.

What’s the difference between the LLP and the Home Buyers’ Plan?

Both programs allow eligible Canadians to access RRSP savings for a specific purpose without an immediate taxable withdrawal. The Home Buyers’ Plan is designed to help eligible people buy or build a qualifying home. The Lifelong Learning Plan is designed to help eligible people pay for qualifying education or training. Both programs also require you to repay the money.

So, what’s the point of the Lifelong Learning Plan?

The Lifelong Learning Plan gives eligible Canadians another way to pay for education or training by temporarily accessing money they’ve already saved in an RRSP. 

For someone considering a career change or returning to school, that flexibility can be valuable. But there’s an important trade-off. Your RRSP is designed to help fund your retirement. When you take money out, you’re giving up the potential investment growth that money could have earned while it was in the account.

Therefore, it’s important to consider whether using your RRSP for education makes sense compared with your other funding options. A financial advisor can help you determine what’s right for you based on your education costs, income, savings, retirement plans, and ability to repay the withdrawal. 

Practical Takeaways

If you’re considering the Lifelong Learning Plan:

1. Check whether you qualify. Make sure you and your educational program meet the LLP’s requirements.
2. Know the limits. You can currently withdraw up to $10,000 per year, with a $20,000 overall limit.
3. Remember that it’s your money. The LLP gives you access to your own RRSP savings; it isn’t a government grant.
4. Plan for repayment. Don’t forget that the money needs to be repaid.
5. Consider the opportunity cost. Money outside your RRSP isn’t earning potential investment returns inside the account.
6. Compare your options. Look at scholarships, grants, student loans, cash savings and other funding sources before deciding.
7. Don’t automatically withdraw the maximum. Take only what you need if the LLP makes sense for your situation.
8. Understand the tax implications. An eligible LLP withdrawal isn’t immediately taxable, but missed repayments can become taxable income.
9. Think about your long-term retirement plan. Make sure using your RRSP today doesn’t create a bigger problem later.

The Lifelong Learning Plan can be a useful tool when education is part of your financial future. Just remember that you’re not getting money from the government—you’re temporarily putting your own retirement savings to work for another important goal.