Quick Answer
A gap year does not automatically mean a Registered Education Savings Plan (RESP) must be closed. In many cases, the RESP can stay open while the student decides what to do next. EAP withdrawals usually require eligible enrolment, so families should avoid closing or withdrawing too early without checking the rules.
Key Takeaways
- A gap year does not automatically close an RESP.
- Families can often keep the RESP open while the student decides.
- EAPs (Education Assistance Payments) usually require eligible post-secondary enrolment.
- A limited six-month EAP window may apply after enrolment ends, if conditions are met.
- Closing an RESP too early can trigger grant repayment and tax consequences.
- Later eligible options may include college, university, trade school, apprenticeships, or part-time study.
It’s one of the most common questions families ask Embark: when a student takes a gap year, what happens to their RESP? Finding out your child wants to take a gap year can bring up a lot of questions, including what happens to the RESP you’ve been building for years. Will you lose the grants? Do you have to close the account? Can you withdraw the money now?
Thankfully, a gap year does not mean the RESP is lost. In most cases, you can keep it open and wait for the student to be ready to return to post-secondary education. But there are important rules about when and how you can take money out, and closing the plan too quickly can have real consequences.
What Happens to an RESP During a Gap Year?
When a student takes a gap year, the RESP does not have to close. The account can stay open, and the money inside it, including contributions, government grants, and any investment growth, can keep sitting there until the student is ready.
According to Canada.ca, families generally have up to 35 years from the date the plan was opened to use the RESP. That means a one-year delay is a very small part of the overall timeline.
While the plan is open but not in use, no contributions are required. The money just waits. This applies to most individual and family RESPs.
Can You Withdraw RESP Money During a Gap Year?
There are two types of RESP withdrawals, and the rules are different for each.
Education Assistance Payments (EAPs)
EAPs are the portion of an RESP that contains government grants and investment growth. These withdrawals have the biggest potential tax impact. According to the Canada Revenue Agency (CRA), your RESP provider can only pay EAPs when the student is enrolled in a qualifying educational program or if the student is 16 or older, when they are enrolled in a specified educational program.
If the student has not yet started school, EAPs cannot be withdrawn just because they plan to go later. Enrolment must be active at the time of the request. Proof of enrollment must be submitted in order for an EAP to process, and Embark provides examples so you know exactly what to look for.
Contribution Withdrawals
Contributions are the money that you put into the RESP. These can sometimes be withdrawn, but taking money out during a non-enrolment period can affect the plan’s grant balance in certain situations, so it’s worth asking your provider first. Before taking any money out, ask your RESP provider whether it could affect the government benefits already in the plan.
For most gap-year situations, the safest approach is to leave everything in the plan and wait until the student enrols.
Learn more: Can I withdraw money from an RESP early? | What role do EAPs play in RESPs?
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What If the Student Already Started School and Then Takes a Break?
If the student was already enrolled in an eligible program and then stops attending, there may still be a short window to access EAPs.
The CRA allows EAPs for up to six months after enrolment ends, but only if the payment would have qualified immediately before the student’s enrolment stopped and the plan allows it. This means the student must have been eligible for the EAP while they were still enrolled.
If you think this rule may apply, it’s best to act fast. Keep records of the last enrolment period and any eligible education expenses. Contact your RESP provider before the six-month window closes. If Embark is your provider, feel free to speak with an Education Savings Specialist.
Learn more: RESP withdrawal rules: how to access education savings | Withdrawing from your RESP
How Long Can the RESP Stay Open?
The Canadian government confirms that contributions can be made for up to 31 years from the day the plan was opened, and families generally have up to 35 years to use the money in the plan. In certain disability-related situations, a longer period may apply if the plan allows it.
This means there is no rush to close an RESP just because a student takes a year off. Whether the student is deferring admission, taking time for personal reasons, or figuring out what comes next, the RESP can usually wait alongside them.
Gap Year Scenarios and What to Do
| Gap Year Scenario | What You Can Usually Do |
|---|---|
| Gap year before starting school | Keep the RESP open; wait until student enrols to request EAPs. |
| Deferred admission (a student’s spot in a program has been confirmed but they are not yet attending) | Keep records; confirm future program eligibility; no action needed now. |
| Semester off after starting school | Ask your provider about the six-month post-enrolment EAP window. |
| Switching to apprenticeship or trades | Check whether the program is eligible — many trade programs qualify. |
| Student unsure about post-secondary plans | Keep the RESP open and review unused RESP options if plans change later. |
What You Can and Cannot Do During an RESP Gap Year
| You CAN Usually Do This | Avoid Doing This |
|---|---|
| Keep the RESP open while the student decides | Request EAPs before the student is enrolled |
| Withdraw your own contributions (check grant rules first) | Assume grants are lost just because school is delayed |
| Access EAPs within six months of enrolment ending (if eligible) | Close the plan without asking about grant repayment |
| Change the beneficiary if rules allow | Ignore group plan-specific deadlines or penalties |
| Wait for the student to enrol in trades, college, or part-time studies | Withdraw accumulated income without understanding AIP rules |
What Happens to Grants If the Student Delays School?
A delay alone does not automatically cause grant repayment. Government grants stay in the plan as long as the RESP remains open and the student is still a potential beneficiary.
Grants generally only have to be repaid if the RESP is closed without the money being used for eligible education, or if certain conditions are not met. Closing the RESP before giving the student a chance to return to school is one way that families can trigger this outcome.
Warning: Do not close the RESP just because school is delayed. Grant repayment and tax consequences can follow a premature closure. Ask your provider before making any changes.
Learn more: What happens to an RESP if it’s not used?
What If the Student Never Goes Back to School?
If it becomes clear the student will not return to eligible education, there are a few paths forward:
- Change the beneficiary to another child in the family, if eligible
- Transfer the RESP to a sibling’s plan, if the plan allows it
- Close the RESP, but understand the consequences first
If the RESP is closed, the Canadian government says:
- Government grants (such as the Canada Education Savings Grant) and any Canada Learning Bond are returned to the government
- Your personal contributions come back to you tax-free
- Accumulated income (growth) may be paid as an Accumulated Income Payment (AIP), transferred to an RRSP where eligible, transferred to an RDSP in certain situations, or donated to a designated educational institution
Closing an RESP is a bigger move than it might feel in the moment. Before closing the plan, speak with your provider and review all available options. Keep the RESP open for as long as there is a realistic chance the student may return to eligible education. If you have questions about your specific Embark plan, the team can walk you through your options before you make any changes.
For a full overview: What happens to an RESP if it’s not used?
Not sure whether to wait, withdraw, or keep the RESP open? Embark can help you understand your options before making changes.
What to Ask Your RESP Provider During a Gap Year
Before making any decisions, bring these questions to your RESP provider:
- Can we keep the RESP open?
- Are there plan-specific deadlines or fees that apply during a gap?
- Can EAPs be paid during the six-month post-enrolment window?
- What proof of enrolment will be needed when the student returns?
- What happens if the student switches programs or schools?
- Would withdrawing contributions trigger grant repayment?
- What are the options if the student does not return to eligible education?
Always confirm with your specific provider before acting.
Learn more: RESP eligible schools
Common Mistakes Families Make During an RESP Gap Year
Closing the RESP too quickly. Many families assume the plan must be closed immediately. In most cases, it does not. Closing early can mean losing grants and triggering taxes on investment growth.
Trying to access EAPs before enrolment. EAPs cannot usually be withdrawn before the student is enrolled in an eligible program. Requesting them too early may be denied or create complications.
Forgetting the six-month post-enrolment window. If the student recently stopped attending school, there may still be a short window to access EAPs. Many families miss this by waiting too long to ask.
Withdrawing contributions without checking grant rules. Even withdrawing your own money can sometimes affect the grants in the plan. Always check before making any withdrawal during a non-enrolment period.
Not considering part-time or non-traditional programs. College, trades, apprenticeships, and part-time programs can all be eligible under an RESP. The path back to education may look different than expected — but it may still qualify.
Not checking group plan restrictions. Group plans often have stricter rules than individual plans. If you have a group RESP, review the plan terms carefully.
Frequently Asked Questions
What happens to an RESP if my child takes a gap year?
The RESP does not need to close. The account can stay open and the money inside — including contributions, grants, and investment growth — waits until the student is ready.
Can I withdraw RESP money during a gap year?
It depends on the type of withdrawal. Contributions may be accessible, but withdrawing could trigger grant repayment. EAPs (which include grants and growth) generally require active enrolment in an eligible program.
Can the RESP stay open if my child delays school?
Yes. Canada.ca confirms that families generally have up to 35 years from the plan’s opening date to use the money. A one-year delay does not require closure.
What happens if my child takes a break after starting school?
There may be a six-month window after enrolment ends where EAPs can still be paid, as long as the payment would have qualified while the student was still enrolled. Check with your provider quickly if this applies.
Will RESP grants be lost during a gap year?
Not automatically. Grants stay in the plan as long as it remains open. They are only returned to the government if the RESP is closed without the money being used for eligible education.
Ready to make a withdrawal or want help planning next steps? An Embark Education Savings Specialist can help. Make an RESP withdrawal with Embark. For a full walkthrough of the withdrawal process, check out our visual demonstration here.
