First tuition bill this fall? Get the RESP withdrawal order right
RESP withdrawals aren't one button — there are two kinds of money in the account, and which one you take first can decide whether grant money gets stranded. Here's the order, the $8,000 first-semester limit, and the tax math.
If someone in your family starts college or university this September, the first tuition bill is weeks away — and this is the month most parents discover that taking money out of an RESP is more complicated than putting it in.
The account you've been filling for 18 years actually holds two kinds of money, and the withdrawal order matters.
Two kinds of money, two sets of rules
- Educational Assistance Payments (EAPs) — the government grants (CESG and friends) plus all the investment growth. EAPs are taxable income for the student, and the school-enrolment paperwork applies to this bucket.
- Post-Secondary Education (PSE) withdrawals — your own contributions. These come back tax-free, in any amount, any time the student is enrolled. You already paid tax on this money before it went in.
When you request a withdrawal, you tell the RESP provider which bucket it comes from. That choice is the whole strategy.
The $8,000 first-semester rule
For a full-time student, EAPs are capped at $8,000 during the first 13 consecutive weeks of enrolment. After those 13 weeks, the cap disappears. For part-time students, the limit is $4,000 per 13-week period.
Either way, the provider will ask for proof of enrolment before releasing an EAP — so get that document from the registrar early, not the week tuition is due.
Why you drain the EAP bucket first
It sounds backwards — why take the taxable money first? Two reasons:
- The tax is usually close to zero. EAPs are taxed in the student's hands, and in 2026 the federal basic personal amount is $16,452. Add the tuition credit and most students with modest part-time income pay little or no tax on EAP withdrawals.
- Leftover grants go back to the government. If the student graduates (or stops studying) with EAP money still in the plan, the unused grant money must be repaid, and pulling out the remaining growth as income for you comes with your marginal rate plus a 20% penalty. Your own contributions, by contrast, never expire and never get taxed — they can safely come out last.
The grants were the whole point of the RESP. Withdraw EAPs steadily across the study years — while the student's tax rate is near zero — so nothing is stranded in the account at graduation.
Timing details worth knowing
- Withdrawals count in the calendar year they're received. If the student had a high-earning summer job, splitting an EAP between December and January can keep them under the tax-free line in both years.
- You don't have to match withdrawals to receipts. Once enrolment is proven, EAP money can pay for rent, groceries, or a laptop — not just tuition.
- Moving cities changes the budget more than tuition does. Before you decide how much to withdraw per semester, price out the student's new city with the cost of living comparison — the gap between living at home and a Toronto or Vancouver apartment is often bigger than a year of tuition.
The takeaway
Ask the provider to classify withdrawals as EAP first, keep each year's EAP total comfortably inside the student's tax-free room, and save your own contributions as the flexible, tax-free reserve. And if the student is working part-time alongside school, their take-home pay — not their gross wage — is the number to plug into the budget.
Figures: RESP EAP limits per Employment and Social Development Canada (canada.ca); 2026 federal basic personal amount per CRA indexation. Retrieved August 2026.