On the idea of not depleting the RRSP and paying the loan after, a couple considerations. First, an RESP withdrawal will require proof of enrolment to get the grants. You can’t take the grants without that, so you’ll definitely want to at least take those portions through the schooling period. For clients, we generally take all of the grants we can, as early as we can, so that if the student doesn’t finish then we have the government portion out.
The other consideration here is that funds that come out during school are in the name of the student. It’s taxable to them, and of course they have all kinds of things they can write off as a result of being in school. So, it makes sense. If you’re plan is to one day withdraw all the funds and pay the loan, just bear in mind these potential tax consequences before you embark on that.
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