OSAP expects students to live below the poverty line
For a single student, living away from home, the OSAP living allowance provides a total of only $34.72 per day for food, shelter, public transit, and miscellaneous expenses. This amount is constant across the Province and does not recognize the varying costs of living between communities.
Over a year, this living allowance would add up to $12,540 – about $3,000 less than the Low-Income Cut-Off for a city of between 100,000 and 500,000, such as Kingston, London, St. Catharine’s or Kitchener-Waterloo. The Low-Income Cut-Off, or LICO, is widely considered a proxy for a poverty line.
For cities above 500,000 people, such as Toronto or Ottawa, the situation is even worse. Students in these cities are asked to live $5,000 below the LICO.
OUSA recommends immediately increasing the living allowance and building in geographical diversity so that no student in Ontario is asked to live below the poverty line.
For a detailed breakdown of the OSAP living allowance, click HERE.
For more on the Low-Income Cutt-Off, click HERE.
The OSAP need assessment does not take into account the full cost of tuition, books and supplies
Each year, colleges and universities in Ontario must report the costs of tuition, books and supplies to the government. But rather than use these amounts to assess a student’s need, OSAP employs a variety of maximums to cap the amount of government financial aid a student can get.
For instance, students in the arts or sciences are assessed a maximum of $600 for textbooks in a normal, two-term academic year, despite the fact that textbook costs in some programs can go well above $1,000.
Similarly, students in graduate and professional programs are assessed a maximum of $4,700 for tuition by the Province, even though these students often pay thousands more. Conversely, the federal government, in its own separate need assessment, includes the full cost of tuition for students in all programs.
OUSA recommends that both the federal and provincial governments include the full cost of tuition, books and supplies, as reported by each institution, when assessing a student’s need.
For more on the OSAP books and supplies maxima, click HERE.
The OSAP maximum has not been increased in four years and continues to prevent students from receiving adequate financial aid.
For many years, the maximum financial aid given to a student through OSAP was $110 per week. Former Premier Bob Rae recommended an immediate increase to $140 per week in his landmark 2005 report Ontario: A Leader in Learning, and the government heeded his advice. Mr. Rae also recommended a second phase of increases, to $175 per week, but five years later students are still waiting for the government to implement this change.
Without a further increase to the OSAP maximum, changes to the OSAP living allowance or the need assessment formula will provide no benefit to high-need students who already receive the maximum allocation.
OUSA recommends that the government immediately increase the OSAP maximum to $175 per week, as recommended by Bob Rae, and tie the maximum to the rate of inflation.
OSAP expects students to save $2,710 in summer earnings for their education, no matter how much a student actually earns.
The summer of 2009 saw the worst student unemployment levels since Statistics Canada began collecting student unemployment data in 1977. Last August, student unemployment reached a whopping 16.4%.
But the OSAP assessment formula assumes a minimum contribution that each student is expected to earn over the summer months – $2,710 for a 16-week pre-study period. This contribution is expected regardless what a student reports earning when they apply for OSAP.
In a summer that saw record student unemployment, thousands of students were unable to make this minimum contribution but could not receive additional government aid to fully cover their costs.
OUSA recommends relaxing the minimum contribution in years with above average student unemployment.
For more on the minimum pre-study contribution, click HERE.
The federal and provincial governments spend millions of dollars each year on tuition and education tax credits that do next to nothing to improve access
The federal and provincial governments together spend over $1.9 billion on tuition and education tax credits each year, far more than they spend on need-based financial aid. Unfortunately, tax credits tend to benefit wealthier families rather than those with the most need.
Research from the Canada Millennium Scholarship Foundation found that the average tax credit claimed per young person in the top income quartile is two times that of the average tax credit available per young person in the bottom income quartile. Moreover, the tax credits are claimed at the end of the academic year, long after students need assistance to pay for tuition, books and rent.
Recognizing that these tax credits do not increase access, the McGuinty government promised in its 2007 platform to eliminate the credits and reallocate the money to up-front grants. Students are still waiting for to see this promise fulfilled.
OUSA recommends immediately eliminating all tuition and education tax credits at both the federal and provincial level and reallocating these funds to the Canada Student Grant Program and the Ontario Student Opportunity Grant, respectively.
For more research on education tax credits, see the Canada Millennium Scholarship Foundation report HERE.