OSAP default rates decline for third straight year
TORONTO, Jan. 4 /CNW/ - The percentage of students who defaulted on their Ontario Student Assistance Program (OSAP) loans is now the lowest it has been since the Government began publicly releasing default rates in 1997, Training, Colleges and Universities Minister Dianne Cunningham announced today.
"By releasing these data, we have brought increased accountability to the system by allowing students and their parents to better plan for the cost of their postsecondary education," said Cunningham. "I am pleased to see that rates are falling and more students are paying back their loans, but we still have a way to go to meet our overall commitment to reduce OSAP default rates."
This year's default rate is 15.7 per cent, down from 18.2 per cent in 1999. This is the third consecutive annual drop in loan default rates for the province since 1997, when the overall rate was 23.5 per cent.
The decline in rates demonstrates significant progress in meeting the Government's goal, set in 1998, to reduce overall OSAP default rates to less than 10 per cent by 2003.
"We believe that the best way to help students repay their student assistance is to ensure that their education leads to jobs," said Cunningham. "We have taken steps to provide them with the relevant information they need to choose courses that have a proven track record of successfully placing graduates in the workplace."
Students are also benefiting from this government's job creation agenda. By December 2000, Ontario had created 184,000 new jobs compared to the same period in 1999.
Further support is provided to students through Aiming for the Top tuition scholarships, a new program in which high school graduates who achieve high marks may receive scholarships of up to $3,500 a year.
The government is also helping to reduce student loan defaults by:
- providing Ontario Student Opportunity Grants so no student incurs more
than $7,000 of debt per year of study;
- credit-screening new loan applicants to be sure loans are not given to
students with a history of credit abuse;
- providing students who have low incomes after they graduate with
opportunities to apply for interest relief on their loan repayments;
- providing students with a tax credit to help cover the interest costs
on student loans;
- requiring institutions that have very high default rates to help pay
for the cost of these outstanding debts;
- requiring institutions to give students accurate information about
default rates, graduation rates and graduate employment rates by
program so students can make informed choices about their studies.
The default rate has declined across the system. The rate for university students is 7.1 per cent, down from 8.4 per cent and already below the 10 per cent goal; the rate for college students is 17.2 per cent, down from 20.1 per cent; and the rate for students at private vocational schools is 28.9 per cent, down from 31 per cent.
The 2000 default rates reflect the percentage of students who were issued loans in the 1997/98 academic year and were in default as of July, 2000. A loan is in default when a student has been in arrears on his or her loan payments for three consecutive months and the government has paid the default claim submitted by the lenders.
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For more information visit www.edu.gov.on.ca
For further information: Dave Ross, Communications Branch, (416) 325-2709; Kerry Delaney, Minister's Office, (416) 326-1625