Skip to content

RESP Basics

Can an RESP be Used for Studying Outside of Canada


Canada welcomes many international students each year who pursue their higher education at one of our prestigious post-secondary institutions. Many Canadian families enroll in an RESP (Registered Education Savings Plan) to make post-secondary education more affordable and accessible.

While some programs have expensive domestic tuition fees, international tuition often costs much higher. From housing to groceries and other related expenses, pursuing higher education can be a significant financial burden for international students.

But what about Canadian students who wish to attend higher education abroad? Can their RESP funds be used to invest for a child’s education if they study outside Canada? Let’s dive into what you need to know if your child is planning on attending a post-secondary institution outside of Canada.

Can your RESP Be Used for Studies Outside of Canada?

A Registered Education Savings Plan in Canada is a financial tool designed to help parents save for their child’s post-secondary education. While it is primarily intended for use at Canadian institutions, it can also be used for studies abroad, provided certain conditions are met.

Using RESP for studies outside Canada can open up a world of educational opportunities while still benefiting from the savings plan you have invested in. Ensure you comply with the guidelines to make the most of your RESP funds.

Types of Eligible Institutions Outside of Canada

To use RESP funds for education outside of Canada, the institution must be approved by the Minister of Employment and Social Development Canada (ESDC). Eligible institutions include:

  • Universities: These are typically degree-granting institutions offering undergraduate and graduate programs.
  • Colleges: Colleges include community colleges, technical institutes, and junior colleges that offer diplomas, certificates, or associate degrees.
  • Vocational schools: These schools provide training in specific trades or careers, often leading to certificates or diplomas.

To ensure the institution is eligible for your RESP funds, check with the ESDC’s list of approved institutions or contact them directly for verification.

Program Requirements

For a program to be eligible for RESP funding:

  • Minimum program length: If the educational institution is outside Canada, the program must be at least 13 consecutive weeks in duration.
  • Full-time or part-time considerations: Full-time and part-time programs are eligible for RESP funding, provided they meet the minimum duration requirement. The flexibility allows students to choose programs that best fit their academic and personal needs.

Student Residency

The RESP beneficiary can be a non-resident of Canada while studying abroad. Even if the student moves to another country for their education, they can still access their RESP funds. However, it’s important to ensure that the educational institution and the program meet the requirements set by the ESDC.

Boost Your RESP with Government Grants for International Education

Your RESP contributions can be significantly enhanced by taking advantage of various RESP government grants. These grants can also be applied to education outside Canada, provided certain conditions are met.

The Canada Learning Bond (CLB)

  • Eligibility: The Canada Learning Bond is available to children from low-income families. Eligibility is based on the family’s net income and the number of qualified children.
  • Grant amount: Eligible children can receive up to $2,000 in their RESP. It includes an initial $500 and subsequent annual deposits of $100 until the child turns 15.
  • International studies: The CLB can be used for qualified educational institutions outside Canada. The key is ensuring the foreign institution is recognized by the ESDC.

The Canada Education Savings Grant (CESG)

  • Eligibility: The CESG is available to all eligible children. The government provides a basic grant of 20% on the first $2,500 contributed each year to an RESP, up to a maximum of $500 per year. Additional grants are available for low and middle-income families.
  • Lifetime limits: The maximum lifetime CESG amount is $7,200 per beneficiary.
  • International studies: Similar to the CLB, CESG funds can be used for studies at qualifying educational institutions abroad. The institution and program must meet the minimum requirements set by the ESDC.

Provincial RESP Grants

In addition to federal grants, some provinces offer additional RESP grants that can further boost your savings.

  • British Columbia Training and Education Savings Grant: This grant offers a one-time amount of $1,200 to eligible children. The child must be born in 2006 or later and you must apply between the child’s 6th and 9th birthday.\
  • Quebec Education Savings Incentive: This provides up to $3,600 in lifetime grants, which includes a 10% basic grant on the first $2,500 contributed annually, with potential additional amounts based on family income.

What Can You Use Your RESP For When Studying Abroad?

Using your Registered Education Savings Plan (RESP) for studying abroad offers flexibility in covering various educational and living expenses. Here’s a detailed guide on what you can use your RESP for when studying at a foreign institution.

Education Assistance Payments (EAPs)

EAPs are withdrawals from a Registered Education Savings Plan consisting of government grants and investment earnings within the RESP. EAPs are intended to help cover the costs associated with post-secondary education.

Tuition Fees

EAPs can be used to pay for tuition fees at eligible educational institutions abroad. The institution and the program must be recognized by the Minister of Employment and Social Development Canada. You can withdraw EAPs to pay for the tuition directly or reimburse yourself for tuition expenses already paid.

Living Expenses

A portion of EAPs can be used for reasonable living expenses, such as accommodation, food, transportation, and other daily costs from living abroad while studying. It’s important to keep detailed records and receipts of your living expenses as you may need to provide proof to your RESP provider to justify the withdrawals. The amount you can withdraw may depend on your RESP provider and the specific terms of the RESP agreement.

Limitations on Using RESP Funds

RESP funds can’t be used for expenses unrelated to your education, such as vacations, entertainment, or personal luxury items. You must use the funds to support your educational pursuits. You can only use your RESP funds for education expenses abroad at approved institutions and programs on the ESDC’s list. Short-term courses that are less than 13 weeks or non-recognized institutions may not qualify for RESP usage.

RESP providers typically require proof of enrollment at the qualifying institution before disbursing EAPs. Proof of enrollment may include an acceptance letter or official enrollment confirmation. There may be limits on how much you can withdraw as EAPs in the first 13 weeks of enrollment. This is often capped at $8,000 for full-time students. After this period, there is usually more flexibility in the amount that can be withdrawn.

Our specialists will assist you to optimize your RESP benefits.

Frequently Asked Questions

What paperwork do I need to submit to use my RESP for international studies?

To use your Registered Education Savings Plan for international studies, you’ll need to submit specific documentation to your RESP provider to ensure that the funds are used appropriately and in compliance with the regulations. Here’s a list of the necessary paperwork:

Proof of Enrollment

Proof of enrollment (often referred to as a Verification of Enrolment form) can be an official acceptance letter or enrollment from the qualifying educational institution abroad. It must confirm the student’s acceptance or enrollment in an eligible program. It typically includes details like the start date, duration, and whether it’s a full-time or part-time program. The eligible program should be at least 13 consecutive weeks.

Confirmation of Institution Eligibility

Provide documentation or details verifying that the foreign institution is recognized by the Minister of Employment and Social Development Canada as eligible. It may involve submitting the institution’s official documentation or referencing the ESDC’s approved list.

RESP Withdrawal Request Form

Each RESP provider has a specific form for requesting withdrawals. Fill out the form and specify the amount you wish to withdraw and the purpose, such as tuition or living expenses.

Expense Documentation

Keep receipts or invoices from the institution showing the cost of tuition and other school-related fees, such as student fees. Document receipts for accommodation, food, transportation, and other living costs. While detailed proof may not be required upfront, keeping these records is essential for your records and potential audits.

Identification and Beneficiary Information

Submit copies of the student’s identification, such as passport or student ID, to confirm the identity of the RESP beneficiary. Ensure all beneficiary information is updated and accurate with the RESP provider, including potential changes in residency or contact details.

Academic information

Some RESP providers may request periodic academic progress reports or transcripts to confirm ongoing enrollment and satisfactory progress in the program.

Are there tax implications when using RESP funds abroad?

Yes, there are tax implications when using Registered Education Savings Plan funds abroad. EAPs are considered taxable income for the beneficiary and are taxed at the beneficiary’s tax rate (which is typically quite low) when filing their tax return. Post-secondary education (PSE) withdrawals consist of the original contributions made to the RESP and are not taxable when withdrawn. The subscriber of the RESP account, often the beneficiary’s parents or guardians, can withdraw the contributions tax-free and the beneficiary doesn’t need to report this portion as income.

The RESP provider issues a T4A slip to the beneficiary for the year in which EAPs are withdrawn. The slip details the amount of EAPs that need to be reported as income on the beneficiary’s Canadian tax return. Even if the beneficiary studies abroad, they are required to report this income to the Canada Revenue Agency (CRA).

The beneficiary must file a Canadian tax return to report the EAPs. Since most students have little or no other income, the tax impact is often minimal due to available personal tax credits and deductions.

Tax implications for the RESP Account Subscriber

The investment earnings within the RESP grow tax-free until withdrawn as EAPs. When the beneficiary uses the funds, the tax burden is transferred to them instead of the subscriber. PSE withdrawals by the subscriber aren’t subject to tax as these contributions were made with after-tax dollars.

International considerations

Canada has tax treaties with many countries to prevent double taxation. If the beneficiary is studying in a country with which Canada has a tax treaty, it can help mitigate the risk of being taxed twice on the same income. It’s advisable to understand the specific provisions of the tax treaty between Canada and the country where the beneficiary is studying. Depending on the foreign country, the beneficiary may have to comply with local tax regulations. However, scholarships, grants, and other education-related payments are typically tax-exempt or subject to favorable tax treatment in many countries.

How long does it take to process an Educational Assistance Payment (EAP) for international tuition?

The time it takes to process an Educational Assistance Payment (EAP) for international tuition can vary depending on several factors, including the RESP provider’s policies, the completeness and accuracy of the submitted documentation, and the specific procedures in place for verifying the eligibility of the foreign institution and program. There are typically two steps involved in disbursing EAPs and each step takes approximately 1-2 weeks to complete.

Initial Review and Verification

The RESP provider reviews the submitted documentation, which includes proof of enrollment, the institution’s eligibility, and the RESP withdrawal request form. The provider may need to verify that the foreign institution is recognized by the Minister of Employment and Social Development Canada.

Approval and Disbursement

Once the RESP provider verifies the documentation, they approve the withdrawal request. After approval, the funds are disbursed. The method of disbursement, such as direct deposit, check, or wire transfer, can influence the time it takes for the beneficiary to receive the funds.

Factors Influencing Processing Time

Submitting complete and accurate documentation can significantly speed up the process of receiving the EAPs. Missing or incorrect information can cause delays as the provider will need to follow up for corrections or additional details.

Different RESP providers have varying internal processes and timelines for handling EAP requests. Some may have faster processing times than others. If the RESP provider needs to conduct additional verification to confirm the foreign institution meets the eligibility criteria, it can add to the processing time.

Direct deposit is typically the fastest method to receive the RESP funds. International wire transfers can take a few days to complete and may be subject to bank processing times. Mailing the check to the beneficiary is typically one of the slower methods of receiving the funds.

Can I use my RESP for a gap year or travel program outside Canada?

Using your RESP for a gap year or travel program outside Canada can be challenging, as RESP funds are specifically intended for post-secondary education purposes. RESP funds can only be used for programs offered by eligible post-secondary educational institutions recognized by the ESDC. The program must be at least 13 consecutive weeks in duration if it’s outside Canada. Short-term programs, gap year programs, or travel programs that do not lead to a degree, diploma, or certificate from an eligible institution are generally not considered eligible for RESP funding.

If the gap year or travel program includes enrollment in an eligible post-secondary institution and the student is taking courses that count toward a degree, diploma, or certificate, RESP funds can potentially be used. The student would need to provide proof of enrollment and details about the academic program to the RESP provider.

Your RESP provider will need to verify that the program and institution meet the eligibility requirements before approving the withdrawal of funds. Educational Assistance Payments (EAPs) from the RESP can only be used for eligible educational expenses, such as tuition, textbooks, and reasonable living expenses related to the eligible program.

To determine eligibility, start by researching the program to see if it has an educational component that includes enrollment in a recognized post-secondary institution. Verify with the institution that the program qualifies as post-secondary education under the criteria set by the ESDC. Contact your RESP provider to discuss the program details and confirm whether it qualifies for RESP withdrawals.

Then, get official documentation from the institution, such as an acceptance letter, course descriptions, and proof of enrollment, to submit with your withdrawal request. While RESP funds cannot typically be used for gap year or travel programs that do not involve formal post-secondary education, they can be used if the program includes enrollment in an eligible post-secondary institution and meets the required criteria.

For guidance every step of the way

Written by Embark

Embark is Canada’s education savings and planning company. The organization aims to help families and students along their post-secondary journeys, giving them innovative tools and advice to take hold of their bright futures and succeed.