hey OP. I work for Scotiabank and plan to go to law school in 2020. The 135 is the total limit for all 3 years. you usually get access to 41,700 in year 1, same in year 2 and the rest in year 3. They'll need to confirm you're still enrolled every year to advance that year's portion. Interest accrues (builds) immediately as you use it, instead of making you pay it, they add it to the existing balance. It basically snowballs. You borrow $100, bank charges you 3.95% a year, you don't pay anything, bank adds the $4 to the $100 and now you owe $104, bank charges you 3.95% on the $104, etc. You pay interest on the interest.
you can use your line of credit as you wish, buy something with it, transfer to your checking account or even take it as cash. interest calculation is the same.