Six-month interest-free grace period eliminated with 10% cut to tuition fees

By Mick Sweetman and Nico deVeber
Dialog Staff

Students on OSAP could be paying more for student loans, even as the government cuts tuition. 

Along with a 10 per cent cut to tuition, the Ontario government has announced major changes to the Ontario Student Assistance Program (OSAP), including the elimination of the “free tuition” grants for low-income students brought in by the previous Liberal government.

Additionally, the no-interest six-month grace period for student loans is also being eliminated, meaning that students will start accumulating interest on OSAP loans the day after that they graduate. 

The new OSAP rules also mean that students who previously had non-repayable grants, covering the average tuition, will see the non-needs-based grants converted to loans.

A report from the Auditor General in December concluded that OSAP could cost the government up to $2 billion by 2020-21.

The Auditor General’s report found that while there were 27 per cent more college students getting financial aid, enrolment only increased by two per cent. 

“The number of people accessing higher education is not commensurate with the additional OSAP funding,” stated the report. 

“We cannot let yesterday’s recklessness threaten tomorrow’s students,” said Merrilee Fullerton, Minister of Training, Colleges and Universities. “It is up to us to restore accountability, trust, and sustainability to all of government, including OSAP.” 

College students will see the average “sticker price” of tuition reduced by about $340 this fall and that will be frozen for the following year. 

Mature students will also see a change in their eligibility, with their parent’s income now being taken into account for those who have been away from school for a six-year period instead of the previous four years. 

Fullteron said students who are currently considered mature students will not see their OSAP eligibility change. 

In the Auditor General’s report, 27 per cent of mature students in Ontario were only able to start accessing OSAP in the 2017-18 school year. 

“The reality of loans-based financial aid programs is that students from low-income families pay more for their education in the long-run,” said Nour Alideeb, Chairperson of the Canadian Federation of Students-Ontario (CFS-O). “This announcement will make life harder for students and their families.” 

When asked if the government will provide additional funding to make up the difference, Fullteron said that the institutions would have to figure it out for themselves. 

“Colleges are relatively independent. They have revenues from other sources and we anticipate that they are capable to make adjustments,” said Fullerton. 

The government will also administer a fund for smaller northern institutions to adjust to the tuition reduction. 

“I think this is ultimately a deceitful announcement, that they’re trying to sugarcoat what they’re actually doing, and students in the long-run are going to lose,” said Chris Glover, the NDP’s colleges and universities critic. “They’re going to be worse off than they were before these changes were made.”

The government is also requiring colleges and universities to provide an “online opt-out option for all non-essential non-tuition fees.”

Fees used to fund campus-wide services and facilities or fees for health and safety of students will remain mandatory. Examples of services include Safewalk, health and counselling, athletics and academic support. 

Student organizations are concerned that this will hurt student unions in the province who deliver services like health benefits, academic advocacy, clubs, services for marginalized students, food banks and transit passes.  

“This is a cynical move by the provincial government to undermine the very organizations that will fight Doug Ford’s cuts to public post-secondary education,” said Sami Pritchard, the national executive representative for the CFS-O. 

“Without student associations, there is no one to hold institutions accountable for decisions surrounding fee increases, programming, or strategic plans,”  said Brittany Greig, president of the College Student Alliance.