LLP (Lifelong Learning Plan)

How the LLP works

The LLP is the education cousin of the HBP: a tax-free loan from your own RRSP. You can withdraw up to $10,000 per calendar year, to a lifetime maximum of $20,000 per person (as of July 2026), with no withholding tax and no income inclusion as long as you repay on schedule. Withdrawals can be spread over up to four years while you or your spouse are enrolled.

One common confusion is worth flagging in bold: the LLP is for you or your spouse or common-law partner, never for your children. Funding a child's education is the RESP's job, with its own government grants. The LLP exists for adults going back to school themselves.

What education qualifies

The student must be enrolled, or have received a written offer to enrol, in a qualifying educational program at a designated institution: generally a program of at least three consecutive months requiring at least 10 hours per week of courses or work. Universities, colleges and many certified trade and technical schools qualify.

The program must be full-time, with one important exception: a student who qualifies for the disability tax credit can use the LLP for part-time studies. Short courses, hobby classes and casual part-time programs do not qualify for anyone else.

Like the HBP, the LLP has a 90-day rule: contributions must sit in the RRSP for at least 90 days before you withdraw them, or the deduction for those contributions can be denied.

Repayment: 10 years, starting in year five

You repay the LLP in equal instalments of 1/10 of the amount withdrawn, over 10 years. Repayment typically starts in the fifth year after your first withdrawal, which gives most students their study years plus a buffer before the first instalment is due. It starts earlier if you stop qualifying as a full-time student for two consecutive years, so dropping out accelerates the clock.

Repayments are RRSP contributions you designate as LLP repayments on Schedule 7. They create no new deduction. If you repay less than required in a year, the shortfall is added to your taxable income, and at an illustrative 30% marginal rate, missing a $2,000 instalment costs about $600 in tax while permanently shrinking your RRSP.

Once you have fully repaid a previous LLP balance, you can use the LLP again, as many times as you like over your life. The $20,000 limit resets after full repayment.

LLP vs. a student line of credit

The LLP shines when the alternative is borrowing at a high rate: it is interest-free, and the repayment schedule is gentler than most bank loans. For a mid-career retraining year with little other income, it can also pair well with the low tax bracket you will be in anyway.

It loses when you have decades of compounding left. Money out of the RRSP stops growing tax-sheltered, and your repayments restore only the principal. If you can borrow cheaply at prime or better, or cover tuition from cash flow, leaving the RRSP intact often wins over a 20 or 30 year horizon. Run the numbers both ways before you withdraw.