Ontario Student Assistance Program Transformation Ministry of Training, Colleges and Universities College Student Alliance May 12, 2016

OSAP Description/Statistics OSAP Applications and Participation OSAP Improvements to Date OSAP Transformation Common Qs and As Future Work Questions? 2 Overview

OSAP Background 3

OSAP Description OSAP is an “umbrella” term for needs-based student financial assistance provided by Ontario and Canada. OSAP includes over 20 separate loan, grant, bursary, scholarship, and other aid programs (i.e. 30% OTG, Distance Grants, Bursary for Students with Disabilities). The purpose of OSAP is to provide needs-based assistance to eligible students from low and middle-income families to assist with the costs of postsecondary education. OSAP is an entitlement program. No cap is set on the number of students who can qualify for funding; eligibility is determined based on student need assessments. 4

About 380,000 students per year benefit from OSAP grants/loans. Almost 70% of full-time Ontario college students rely on OSAP to help finance their postsecondary studies. The average college student received about $9,109 (in ). In , almost $3.5B in OSAP assistance was issued to Ontario students. Canada: $1.7B in loans; $400M in grants. Ontario: $360M in net loans; about $1.0B in grants. OSAP Statistics 5

* For higher-tuition programs at public institutions (graduate, professional and high demand college programs), Ontario caps how much tuition and fees it will recognize in the OSAP assessment at $2,930/term. Public institutions are required to deliver financial aid towards unmet need due to tuition above these caps. ** For programs at PCCs/other private postsecondary institutions, Ontario caps how much tuition it will recognize in the OSAP assessment at $5,000 per term and $10,000 per academic year. (Canada recognizes full tuition). ** Includes such costs as uniforms, minor laboratory equipment, professional association and examination fees, field trips, and graduate thesis costs. Allowable Educational Costs Expected Financial Contribution Calculated Financial Need minusequals Tuition and Compulsory Fees* Books and Supplies** Equipment Computer Costs Personal Living Expenses Child Care Travel Student Income Student Assets Parental Income Spousal Income Spousal Assets Federal Assistance (60% of assessed need subject to maximum) Provincial Assistance (40% of assessed need subject to maximum) 6 Determination of OSAP Entitlements Example of OSAP Financial Need Calculation (Dependent University Student; Family Income: $90,000/year) Costs:$19,665 Resources: $ 5,053 Expected Parental Contribution $ 3,000 Expected Student Contribution Financial Need:$11,612

8 OSAP Participation Rates - Ontario Colleges

ChallengeAddressed by Complicated, paper-based loan agreements (students line ups) OSAP Express – self-service, lifetime agreements, NO more lining-up (2011) Complex and punitive treatment of funding for Crown Wards Living and Learning Grant and Free Tuition Fee introduced for Crown Wards (2012) Help for recent graduates in financial trouble to pay for their student loans Repayment Assistance Program (2010); Extended grace periods volunteers and entrepreneurs (2012) Late OSAP payments up to a month after school start Early payments up to 2 weeks before school starts (2013) Multiple payments under OSAP from different sources creating confusion Single/simplified OSAP payment was introduced through National Loan Centre (2013) Expensive and early deposits, BEFORE OSAP payments, and full year billing in advance. New rules for tuition billing - smaller deposits; per-term billing, fee caps (2013) 9 OSAP Improvements to Date

10 ChallengeAddressed by Infrequent increases to OSAP loan/ assistance limits/maximums Indexed OSL and OSOG thresholds to inflation (2015) Complex rules on pre-study contribution, and large disincentives to work during study Budget 2015 committed to: -Removing restrictions on in-study earnings -Simplifying OSAP with a flat $3,000 pre-study contribution -Exempt $3,000 assets Prohibitive rules around owning vehiclesRemoval of vehicles from OSAP assessment (2015) Debt aversion for certain studentsStudents can now choose to accept grants only or a portion of loans (2015) Once a graduate defaulted on loan, could never get back into good standing Introduced automated RAP (electronic) and default rehabilitation (2015) OSAP Improvements to Date

OSAP Transformation 11

12 Context for Action Over the years, the government has introduced changes to make OSAP simpler and fairer for students. While these changes have resulted in more than double the number of students accessing OSAP over the past 12 years, there remains a concern that students from lower income families continue to participate in PSE at much lower rates than those from higher income families. Source: Statistics Canada custom data prepared using family T1 tax data (2013). Ontario couple and lone parent families with one or more children aged and residing at home. Percentage of families with students attending full-time postsecondary program, based on tax credits claimed, by gross parental income (Line 150, Canada Tax return).

13 Problems with the Current System Mature Learners, and those with children, are not sufficiently supported with non- repayable grants and help with tuition costs. ‘Net’ tuition, or the price of tuition/education after non-repayable government assistance, is largely unknown to students. Back-end Support, like the Ontario Student Opportunity Grant (OSOG), a program which reduces student debt, or the TETCs, is opaque and not well understood by students. Many low-income students are disadvantaged because they go to low-cost programs (e.g., college). Because OSOG is focussed on capping debt, students in high-cost programs receive more grant funds than those with lower costs. Number and Complexity of Grants under OSAP are not well understood, and can be confusing to students. There are over 20 different OSAP grants. Parental Contribution requirements toward the costs of a student’s education are high for middle-income families in Ontario, much higher than Canada/other provinces.

14 Objectives of OSAP Transformation MTCU and the Ministry of Finance (MOF) are proposing to discontinue the TETCs and make changes to OSAP to provide students with the highest need for financial assistance with better access to grants upfront, when they need them. The OSAP redesign means: No provincial student debt for students from families with annual income of $50k or less. Clearer and more transparent net tuition costs of postsecondary education (PSE), by applying up-front grants directly to reduce tuition/educational costs. Work with colleges and universities to implement by Sept 2018, a billing system that takes into account government and institutional grants for students, reflecting net tuition. Increased grants for mature students, making tuition support available to all student types. Reduced number and complexity of grants delivered through OSAP (i.e., eliminate the 30% Off Ontario Tuition, Ontario Access Grants, Childcare Bursary and OSOG). Improved ability to contain student debt by redirecting increased tax revenue to up-front grants. Improved access to subsidized loans for middle-income families, by reducing parental contributions. Expanded outreach to address non-financial barriers by building on initiatives that improve supports to students who might otherwise not attend PSE.

Timing of Aid – Current and Future (University Example) 15

Reduced Parental Contributions By , Ontario will reduce the amount of contribution it expects from parents of dependent students. Align the income threshold at which parents are expected to contribute to postsecondary education costs with the threshold used by the federal government. For example, Ontario would not expect a family of four to contribute to their children’s education costs until an income of $86,000/year, up from $68,000/year today. Reduce the rates at which parents contribute from their discretionary income. 16

Reduced Spousal Contributions In , Ontario will also reduce required spousal contributions. Currently, Ontario expects spouses to contribute 70 per cent of actual income net of taxes and deductions for the study period weeks. Starting in , contribution rates will be graduated, starting at 25 per cent for students with little discretionary income and then gradually increasing for students with more income. 17 Ontario Expected Spousal Contribution Rates in Annual Income Net of Taxes and Deductions Ontario Contribution Rate CurrentNew 0 - $7,000 70% 25% $7,001 to $14,00050% > $14,00070% Note: Contribution rate is pro-rated for number of study period weeks.

Increased OSAP Assistance Levels Both Canada and Ontario provide a maximum level of assistance in the calculation of OSAP needs-based aid - regardless of financial need. For single students, federal government aid accounts for about 60% of the maximum. For married students or students with dependent children, Ontario’s share of the maximum is larger. For professional and high-demand programs, OSAP also caps the amount of tuition and fees. This cap was $5,860 for Starting in , the maximum OSAP assistance levels will be increased to about $180/week for single students and about $450/week for married and sole support students. 18 Maximum OSAP Assistance Levels Current Changes to Ontario Levels as of CanadaOntario Single students$210/week$155/weekAbout $180/week Married/sole support students $210/week$355/weekAbout $450/week

19 Note: Funding reflects full roll-out of OSAP transformation ( ) and implementation of the 2016 Federal Liberal platform commitments regarding Canada Student Grants. Scenario 1: College student Living at home Costs: $8,900 Family income: $40,000 Transformation: Receives more grants No Ontario loan Canada loan reduced substantially; interest-free while in full-time studies Student Scenario: Comparison of Current vs Future Aid for College Student, Family Income of $40,000/year

20 Note: Funding reflects full roll-out of OSAP transformation ( ) and implementation of the 2016 Federal Liberal platform commitments regarding Canada Student Grants. Scenario 2: College student Living at home Costs: $8,900 Family income: $80,000 Transformation: Receives more grants Parental contributions are eliminated Access to subsidized, interest- free loans while in full-time studies Student Scenario: Comparison of Current vs Future Aid for College Student, Family Income of $80,000/year

Implement net tuition billing with public universities and colleges. Through net tuition billing, a student’s OSAP grants and institutional aid will be taken into consideration when calculating tuition fees owed. The student’s tuition statement would reflect total tuition, non-repayable aid and the final ‘out-of-pocket’ tuition actually owed – after OSAP grants and institutional aid are taken into account. The implementation of net tuition billing will: Provide students with clarity and transparency about actual final tuition owed to the institution by the student. Simplify payment process for student – payment made directly to institution by OSAP. Allow students/families to more easily plan for their education and inform postsecondary education choices. 21 Net Tuition Billing in

22 OSAP and Net Tuition Billing Process in

Common Questions and Answers… When will the OSAP changes take effect?  Changes will be implemented over two years.  : Ontario Student Grant implemented and weekly assistance levels increase.  : reduced parental and spousal contributions. Net tuition billing system in place with universities and colleges. Should I delay going to school until the changes are in place?  Students who are ready and interested in going to postsecondary education should not wait for OSAP changes.  Government support for students attending postsecondary education is already very generous – more so than most students realize.  Federal OSAP grants for students from low and middle income families will be increased in  A big part of the Ontario changes is just better packaging and timing for aid.  Support that is currently provided at various times (e.g., start of studies, end of studies, or years later) will start to be provided through a single up-front grant, so students can better understand the support available to them to help with education costs when they are incurred. 23

Common Questions and Answers… What are the residency requirements for the Ontario Student Grant?  Same as current OSAP residency rules.  Ontario resident who is a Canadian citizen; permanent resident or protected person.  May enrol in a public postsecondary institution in another Canadian jurisdiction.  Students who are residents of other Canadian provinces and are studying in Ontario would receive financial assistance from their home jurisdiction. Can I receive only the grant-only portion of OSAP funding?  Yes; students have options.  Students can opt to receive full entitlement of OSAP grants with no loans; or both OSAP grants and loans. 24

Future Work Design issues that will require further development Impact of federal changes as announced in Budget on March 22 Canada Student Grants values and thresholds Repayment Assistance Plan Ongoing work with the federal government and other jurisdictions Finalize OSAP transformation design details Stakeholder consultations on the Ontario Student Grant, including student groups Future changes to billing for universities and colleges Technical working group on net tuition and billing changes 25

Questions? 26 Get more information by visiting OSAP websites: OSAP: ontario.ca/osap 30Off: ontario.ca/30off Communicate with OSAP via: #OSAP #30off