Reader Question About Using RESP funds For CEGEP Education

Dillon recently left a question about using RESP funds for CEGEP on my RESP withdrawal rules post.  For those of you who don’t know, CEGEP is an education program which students in Quebec must complete before heading to university.

Here is his question:

Hi, I am 16 years old and going to be attending CEGEP this fall. My father has saved some money in a RESP account (in which I am the beneficier) and I was wondering how can I “use” the money without being charged the taxes and without losing the accumulated income. Do I need to request a special reciept from my school?
Thanks a lot!

Great question Dillon, you are the first “beneficiary” who has ever sent a question to me.  🙂

First, let’s answer the question directly and then look at a few other possible issues.

How to use RESP funds for CEGEP or other post-secondary education

To use money from an RESP account for eligible post-secondary education, you must provide some sort of proof of enrollment to the financial institution which holds the RESP.

I would suggest phoning the financial institution where the RESP account is held, tell them your situation, including which CEGEP school you will be attending.  They should be able to tell you exactly which documentation is necessary to complete an Educational Assistance Payment (EAP) from the account.

Your Father will need to provide this enrollment documentation to the financial institution each time a withdrawal in requested.

You don’t need to show any kind of receipts or justify the withdrawal in any way.  As long as you are a student, then the money can be withdrawn and used for whatever you like.

The subscriber or owner of the account controls the payments

One point I want to emphasize is that the subscriber (the person who opened the account) controls the payments.  The beneficiary cannot request any payments, they must work with the subscriber in order to use the RESP money.  In Dillon’s case, his Father has to request the payment and provide the enrolment proof to the financial institution.

Financial institutions will not provide info to anyone other than the account holder.

This ties in with the previous point, a beneficiary cannot call up the financial institution and make inquiries about the RESP account.  Only the subscriber can do that.  The beneficiary can call and ask about procedures, such as how to request an RESP withdrawal.  A beneficiary cannot call and ask anything specific to the RESP account, such as how much money is in the account.

Make sure you check out my post 8 things you need to know about withdrawing money from an RESP account.

Good luck with school Dillon!

2 replies on “Reader Question About Using RESP funds For CEGEP Education”

I would suggest something extra to Dillon – CEGEP is almost free in Quebec. Almost free… I mean you have to spend few hundred dollars per semester simply to buy books and for some admin fees. Therefore, I would suggest him to keep his RESP money for University UNLESS he will do a “technique” certification at CEGEP which is a 3 year program and he can work as soon as he graduates or use some of RESP money because he has to leave home and live on his own. Otherwise, keep RESP money for University. It is too easy when you are a CEGEP student to blow it all away.

Well. depending how much money is in the account, maybe it’s safer to withdraw the subsidies from the RESP rather sooner than later and placing it in a regular bank account. You never know for sure if the child will be going to university for a few years…

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