Mike from the Quest for Four Pillars blog commented on a post I had written about the Lifelong Learning Plan. He mentioned that if he were ever considering going back to school, he would be inclined to just withdraw the money from his RRSP since that year would probably be a lower income year and the tax hit not as bad as a "full" income year.
It is an excellent suggestion. In fact, for the LLP, you almost always have to be enrolled in a full-time capacity at a qualifying educational institution. That means it is indeed likely to be a lower income year.
Add to that:
1. You no longer have to worry about what program you take and making sure it qualifies under the LLP.
2. You don’t have a set repayment schedule – you can make your repayments on your own terms, and probably in a higher tax bracket which will afford more tax refunds on your future contributions than tax paid on the withdrawal.
Perhaps this is why most people don’t use the LLP… Thanks for the suggestion Mike!
Mike and Mr. Cheap run the Quest for Four Pillars blog and I suggest you visit their site to find out where the name comes from. I’m a subscriber to their site (it’s free) and visit it daily.