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Strengthening Financial Support for Students in Ontario

Archived Backgrounder

Strengthening Financial Support for Students in Ontario

Ontario is committed to making postsecondary education accessible to all qualifying students, regardless of their income. Ontario offers one of the most robust student assistance programs in Canada, with more than $1.3 billion provided to students each year - 70 per cent of which is in the form of non-repayable grants.

The government is moving forward with a plan to expand student aid even further and to modernize the Ontario Student Assistance Program (OSAP) to help increase transparency and predictability in the system.


The improvements include:

Raising the weekly Ontario student loan limits by indexing to inflation

OSAP is made up of 26 separate loan, grant, bursary, scholarship and other aid programs. For the 2015-16 school year, the Ontario student loan limit will increase by $5 to $155 per week for single students and $355 per week for students who are married or have dependent children. The limits were last increased in 2010-11 from $140 and $335, respectively.

On August 1st of every year starting in 2016, the maximum weekly loan amount will be adjusted by the annual change in the Ontario Consumer Price Index as of July 31st.

Many other factors that are considered when calculating the amount of OSAP aid students are eligible to receive - such as study period income exemptions, books, supplies and equipment, and living allowances - are already indexed to inflation.

Launching a loan rehabilitation program

In the past, borrowers who defaulted on their Ontario loan repayment obligations (falling more than nine months in arrears) had to repay their loan in full before they could apply for more Ontario student assistance. This was a more stringent requirement than the Government of Canada and some other provincial loan programs.

With this new program, borrowers who default on the Ontario portion of their Canada-Ontario student loans can now rehabilitate the Ontario portion to good standing with OSAP by showing commitment to repay.

To rehabilitate their defaulted Ontario loan, borrowers must make six regular monthly payments that cover their monthly principal and interest and all interest arrears. By also bringing their Canada loan into good standing, they can now also apply for more student aid or repayment assistance from Ontario. Based on data from the Canada Student Loan Rehabilitation Program, 60 per cent of borrowers who rehabilitate their Canada loan apply for further OSAP funding for additional postsecondary studies.

Borrowers who default on their Ontario Student Loan will be able to apply for this program in January 2015. Information about the program and how to apply will be posted on the OSAP website.

Raising the debt cap by indexing to inflation

Ontario currently caps student debt through the Ontario Student Opportunity Grant. This is the only fixed annual student debt cap of its kind in Canada. The program means that in 2014-15, no matter how much a student borrows, Ontario limits the amount of OSAP debt they need to repay to $7,300 for a two-term academic year and $10,950 for three terms.

Starting in 2016, the grant threshold, above which student loans are forgiven, will be indexed annually to inflation so that repayable debt will remain capped at 60 per cent of the maximum loan funding available to students. For the 2015-16 school year, the maximum amount of OSAP debt students need to repay for a two-term academic year is $7,400.

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