My son will be graduating from university when he is 16. Can we use this RESP before the projected maturity date as he will be starting before he is 18? If so, is there a penalty in making withdrawals earlier? What if he gets a scholarship from the university? Does this impact the withdrawals as well?
Thank you for your inquiry.
With a Family Group Plan, you may request an earlier maturity date. Contributions are returned earlier and your student will begin receiving Education Assistance Payments (EAPs) sooner as well. If you are a Knowledge First customer, please submit your request in writing and we’ll send you the appropriate forms. Otherwise, please contact your RESP provider for more information as the details on how to request a return of contributions or EAP vary by plan. Generally speaking, scholarships will not impact the amount of withdrawals from your RESP, however it is important to know that both scholarship money and EAPs are taxable income to the student.