This week, students welcomed Premier McGuinty and Minister Glen Murray to Ontario campuses as the government’s new OSAP disbursement plan, OSAP express, delivered much needed student assistance into the bank accounts of thousands upon thousands of students. The new program carries a host of benefits, including the elimination of OSAP pickup-lines and the need to sign multiple loan agreements. Additionally, electronic enrolment verification and improved communication with universities and colleges have enabled OSAP to speed up the process of getting funds to students, directly addressing a perennial student concern.
However, there is one tiny, possible cloud in this otherwise excellent news story for students. In the effort to better align OSAP disbursement with institutional payment processes, there is a greater likelihood that student funds will be transferred directly to the institution to reduce the costs of tuition. In previous years, funds were transferred directly to students by default, with students being given the choice to transfer funds directly to institutions to reduce up-front tuition costs. Starting this year, students must opt-out of direct institutional transfers on their application.
In other words, unless a student indicates that they want control of their money, the institution may collect as much of the student’s OSAP disbursement as it deems necessary. This is not a problem in-and-of itself. However, students who do not pay close enough attention when filling out their OSAP application could be left vulnerable to the possibility of not having enough funds to support their living expenses.
How might this happen?
Students rely on OSAP not only to fund up-front tuition costs, but also rent, utilities, textbooks and transportation costs. With 12 of 20 Ontario universities charging full-tuition at or before the beginning of the school year and OSAP only disbursing 60 per cent of a student’s funds in September, it stands to reason that some students may see their entire assistance amount for the fall go towards paying the year’s worth of tuition.
For example, a student with a $10,000 dollar assistance package would receive $6,000 of that assistance in September. If they were attending a program that charged tuition of $5,400 (last year’s average undergraduate arts tuition rate), at an institution with a full-tuition payment deadline in the first week of September or in August, they would be required to pay that full amount in fall, unless they opted to defer (for a fee in most cases).
If the student opted not to defer tuition payment, and neglected to opt out of a direct deposit to the institution, there would be nothing to stop the institution from taking the full $5,400 from the student’s $6,000 package, leaving them with $600 to live on for the entirety of the fall term.
The likelihood of this happening to a large number of students is small. Even for the students that do not notice the new opt-out feature of the OSAP application, the likelihood of this scenario happening depends on the institution’s tuition payment policies, the awareness of their financial assistance officers and the size of the student’s OSAP package, amongst other factors.
OSAP is currently working with student groups and universities to change institutional payment processes to better align with this new policy, meaning that this problem may diminish in the long run. However, in the short-term, students should monitor their financial situations carefully.
If you, or anyone you know falls into a situation where their institution subtracts too much of their fall OSAP package, leaving them with little to live on, I’d encourage you to get in touch with OUSA immediately. In addition to providing direct advocacy on this issue, we are looking to understand how much of a problem this loophole in the system really is. If it does adversely affect even a small number of high-need students, we will begin exploring alternative solutions.
As we continue to work with the Ministry of Training, Colleges and Universities and universities on the implementation of OSAP express, we want to make sure that the train leaves the station with all students on board.
Director of Research
Ontario Undergraduate Student Alliance