Students across the province rely on the Ontario Student Assistance Program (OSAP) to help fund their post-secondary education. The program supplements earnings from part-time and summer jobs, and it increases access to education for students from underprivileged socioeconomic backgrounds (read: students whose parents don’t make a lot of money). But recent changes to the program have made it harder for many students in Ontario to afford post-secondary education.
Below, I’ll talk about a few of these changes and tell you what you can do to make your voice heard (hint: it’s signing OUSA’s letter-writing campaign). But before I do, it’s worth talking about how we should approach the question of whether these changes make OSAP more financially sustainable long-term. It’s an important question, and we should talk about it; we want future students to have access to reliable OSAP, after all. But we shouldn’t use this question to steer the conversation away from the current reality, which is that it just got a lot harder for many students to afford post-secondary education. Even if these changes do make OSAP more sustainable, that’s not an excuse to throw current students under the bus. Instead, the provincial government should work with students to develop an OSAP framework that works for everyone.
Some of the changes discussed below might be difficult to understand without a basic idea of how OSAP works. If you’re new to OSAP or have questions, visit this page for details on who’s eligible for the program, how loans and grants work, where funding comes from, and the repayment system.
THE 2019 OSAP CHANGES
1. Reduced OSAP Grants
Students from families earning less than $50,000 per year no longer receive “targeted free tuition” in the form of Ontario Student Grants (OSG) – i.e. the provincial portion of OSAP grants. Instead, they receive at least ten percent of their funding in the form of loans, and they’re no longer guaranteed enough funding to cover tuition. And while it’s true that this group of students now receives a larger portion of the total OSAP budget expenditure (82%, up from 76%), many actually receive less than they did before. That’s because the province’s OSAP budget is smaller now ($1.37 billion, down from $2.04 billion). Low-income students get more of the pie, but the pie’s a lot smaller than before.
Another change is that, now, fewer students in general are eligible to receive an Ontario Student Grant (OSG). Dependent students will be ineligible for provincial OSAP grants if their parents earn more than $140,000 (assuming a family of four), a number that’s been lowered from $175,000.
There’s also been OSG reductions for students in “second-entry” programs (e.g. graduate school, law, medicine) and for Ontarians studying outside the province. For these students, loans now make up at least 50% (and up to 100%) of the provincial portion of their OSAP funding.
Students may also be receiving smaller OSAP loans than last year, though to what extent is unclear. While OUSA has heard from many students who are now receiving less, we can’t know for sure because the provincial government hasn’t published information on current OSAP loan amounts. This information should be made readily available to the public.
2. Expanded “Mature Student” Definition
For the provincial portion of OSAP, students are now considered mature (or independent) once they’ve been out of high school for six or more years. (This used to be four or more years, and that’s still the case for the federal portion of OSAP.) Mature status is important because it determines whether a student’s OSAP eligibility and funding is calculated using their personal income or their parents’ income. The longer a student is considered dependent (or “non-mature”), the longer their OSAP eligibility and funding will be determined by their parents’ income – and in many cases, that means less funding.
This change may be worse for some students than others. In particular, it hurts students who: (1) receive little or no financial assistance from their parents; and (2) aren’t eligible for OSAP (or receive less funding) because of their parents’ high income. In other words, students whose parents make a lot of money but don’t help them pay for school. Those parents might have their money tied up in other places or believe it’s their child’s responsibility to pay for their education, or they could be estranged from their child. Whatever the reason, students in this position often need to resort to high-interest debt like bank loans and credit cards to pay for their education.
This change can also hurt students who enter university straight out of high school and then, right after finishing their undergrad, begin a graduate or professional program (law, medicine, etc.). These students will now be considered dependent for the first two years of their second-entry program and, like the students I mentioned above, they could end up without financial help from OSAP or their high-income parents. But in this case the effect is more severe. Usually, graduate and professional programs are more time-consuming and have higher tuition rates. That means these students have less time to work but need to earn significantly more money (compared to undergrads), and so they’ll likely need to take on even more high-interest debt. The end result is that the new, expanded definition of “mature status” could make students wary of pursuing additional schooling.
3. Elimination of the Interest-Free Grace Period
There’s also been a change to how OSAP repayment works. Interest on the provincial portion of OSAP loans now begins to accrue as soon as students leave full-time studies. And while there’s still a grace period – students aren’t required to pay back the provincial portion of their OSAP loan for six months – it’s not nearly as helpful. Students who wait six months to begin paying back their loan will incur significant interest and end up owing more money.
The idea behind this change was to match the way interest works on the federal portion of OSAP loans. This rationale hasn’t held up: the federal government announced recently that students will no longer accrue interest on the federal portion of their OSAP loan in the six months after they leave full-time studies. In other words, they have a “true” grace period on the federal portion of their loan.
4. Increased Expected Contributions
Students and parents are now expected to contribute more toward education costs, and this can affect how much students receive from OSAP. In most cases, the higher the expected contribution, the lower a student’s OSAP funding will be. The expected contribution for students has increased from $3,000 to $3,600, which means students are now expected to contribute $600 more out-of-pocket toward their education costs. Parents are now expected to contribute to their child’s education costs if they earn more than $90,000 (combined); before the changes, this was only expected of parents who earned more than $120,000.
MOVING FORWARD
It’s only September but OUSA has already heard from hundreds of students struggling to afford post-secondary education because of the recent changes to OSAP. These are students who now feel abandoned after pursuing an education believing that the provincial government would offer them a certain amount of financial assistance. Many have been forced to drop courses and work a second part-time job while studying, delaying their graduation; others have had no choice but to withdraw from their programs entirely. Some have been forced to take on high-interest debt to replace what they would have received from OSAP. These hurdles can force students to delay important milestones like getting a job, starting a family, or purchasing a home – all of which contribute to Ontario’s economy.
OUSA is dedicated to learning more about the effects of these changes, and our 2020 Ontario Post-Secondary Student Survey (OPSSS) will feature questions on OSAP and student employment (in addition to several other areas, affordability-related and otherwise). To learn more about how affordable post-secondary was for students in Ontario before the recent OSAP changes, check out OUSA’s report, “Affordability: Results from the 2017 Ontario Post-Secondary Student Survey”.
OUSA strongly encourages the provincial government to reverse the recent changes to OSAP and engage in meaningful consultation with students to develop a framework that works for everyone – one that’s sustainable long-term but that also prioritizes Ontario’s current post-secondary students and allows them to continue their education, enter the workforce, and contribute to Ontario’s economy.
If you’ve been affected by the recent OSAP changes, join OUSA’s letter-writing campaign and add your story. Make your voice heard to your local Member of Provincial Parliament (MPP), the Premier of Ontario, and the Minister of Training, Colleges and Universities. If you have any questions about the campaign, feel free to reach out to OUSA at 416-341-9948 or [email protected].
There’s a lot going on with post-secondary education in the province, and students face a range of issues beyond the classroom. But students also have solutions – recommendations that will bring us closer to accessible, affordable, accountable, and high-quality education for all. That’s why each month we’re highlighting key issues and priorities for students in Ontario with this blog series based on OUSA’s priorities and policy library.