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The Registered Education Savings Plan (RESP) is a long-term savings plan to help people save for a child's education after high school, including trade schools, CEGEPs, colleges, universities, and apprenticeship programs. An adult can also open an RESP for themselves.

What happens to the RESP if my child decides to study outside of Canada? RESPs can be used to cover education outside Canada, so your child will have the flexibility to decide where and what they want to study. However, not all foreign education expenses may be covered by EAPs.

Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries. Family plans are the only RESP that allow subscribers to name more than one beneficiary.

Here is an overview of how an RESP generally works. A subscriber enters into an RESP contract with the promoter and names one or more beneficiaries under the plan. The subscriber makes contributions to the RESP. Government grants (if applicable) will be paid to the RESP.

If you use RESP funds for non-educational purposes when leaving Canada, you may face taxation on the accumulated income, and government grants may need to be repaid. Is there a time limit for using RESP funds after leaving Canada? There is no specific time limit for using RESP funds after leaving Canada.

An RESP is the equivalent of a U.S. 529 plan. It allows savings for college to grow tax-free until the money is withdrawn, at which time taxes on withdrawals tend to be low or nonexistent because students typically have little to no income.