Ontario government announces significant changes to OSAP

On September 1, Reza Moridi, the Ontario Minister of Training, Colleges and Universities, announced that the Ontario Student Assistance Program (OSAP) will be revamped in order to make the “financial assistance program easier to use, more flexible, and more transparent.”

Some of the changes include giving students a little more control over the amount of financial aid they need and want to withdraw. Starting this year, instead of taking out a full loan and grants “students will have the opIOU_01tion of declining a full loan and only withdrawing the grant support they qualify for”.

Beginning in 2016, students will have full discretion over their financial aid and “will be able to decide on the portion of the loan amount they wish to withdraw.”

“Our government is committed to making postsecondary education accessible based on a student’s ability to learn, not their ability to pay. That’s why we support a progressive student financial assistance program that ensures virtually no student pays the full sticker price and the students with the highest need get the most support,” said Moridi.

Many students will welcome this change to the program. It will not only give students the final say over the amount of financial aid they actually need but will incentivize students to think more responsibly with their loans. If you receive $10,000 or $15,000 but only need $6,000 or $8,000 to cover the costs of your schooling and living expenses while attending school and working part-time, it’s only to your long-term financial benefit to decline whatever is left over.

Students will no longer be required to report their vehicle as an asset on their applications. However, this will only benefit a very small number of students, around 7,300 per year according to the Ontario government. Nonetheless, it does mean that for those students who live off campus, have long commutes or who have children they take to school and elsewhere will no longer be penalized when being assessed for financial assistance.

OSAP will also exempt “the first $3,000 in a student’s assets from their financial aid assessments”. This includes everything from mutual funds, stocks, tax-free savings accounts, to the money in your bank account.

The complicated process OSAP previously used in determining what each student was required to contribute each year to the cost of their schooling is also ending. OSAP will now go by a fixed $3,000 per year as the minimum amount each university or college student will be expected to contribute.

Aside from making the application process easier and giving students greater control over their financial assistance, OSAP will now be indexed with inflation to ease the burden of living expenses. According to the government “For 2015-2016, the student loan limit will increase to $155 per week for single students and $355 per week for students who are married or have dependent children.”

Spencer Nestico-Semianiw, President of the Ontario Undergraduate Student Alliance (OUSA), commented “We are happy with many of the changes we saw to OSAP in this budget, specifically the removal of in-study income exemptions, simplified student contribution expectations, and the decoupling of grants and loans.”

“OUSA has long advocated for increased flexibility and access for students in the aid system in Ontario – we are thankful to see such improvements being made. These changes will give students more predictability in their budgeting and stop their in-study income from counting against their overall loan, empowering students to have more agency in managing their debt.”

Other changes to OSAP include the recently launched Ontario Student Loan Rehabilitation Program, which will allow students who have defaulted to make scheduled payments to bring their loan back into good standing. However, the program is not without its troubles.

On August 30, the Toronto Star reported that Employment and Social Development Canada (the department in charge of the program) was stepping up efforts to collect on defaulted loans and to locate borrowers who haven’t paid or refuse to pay.

According to the report, the government is forced to write off approximately $300 million in student loans every single year “either because a debtor may file for bankruptcy, the debt itself passes a six-year legal limit on collection, or the debtor can’t be found.” In 2012-2013, 162,000 borrowers who received financial assistance defaulted on their loans and were written off by the Canada Revenue Agency.

Despite these changes, most students will still leave university with massive debt loads, encounter difficulties finding a job and financial uncertainty. Navigating the debate over student debt and what policies should be adopted to address it remains a difficult and contentious subject. However, there are some tried and true methods for reducing your debt load while going to school. These involve largely personal decisions and thinking wisely with your time and money.

Although some have to move away from home due simply to their physical location and program choice, one of the easiest ways to avoid financial assistance is staying right where you are in your home town. It’s no adventure and you’re stuck with the same old surroundings and usual crowd, but at least you’ll be doing away with the vast majority of expenses that come with living on your own away from home.

As much as we want to devote the majority of our time to studying, preparing for finals and writing papers, getting a part-time job while going to school and a summer job when you’re not will take you a very long way (especially if you’re good at saving your money).

The final tip is a bit more difficult and tricky, but if you’re diligent and discover that thriftiness is its own long-term reward, it will also help you steer clear of a massive debt load: plan a detailed budget. Know what expenses and costs you have. Figure out what your earnings are and what you want to save. Applying for bursaries and other rewards will help but if you stick to a budget, don’t go overboard on expenses and try your hardest to save as much money as you can (however difficult it is) you just might find yourself graduating without any debt or very little at all.

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