Reform of Ontario’s Financial Aid System Ministry of Advanced Education and Skills Development February 2017

Overview 1 What is OSAP? 2 OSAP Transformation: Context for action 3 OSAP Transformation Phase I 4 OSAP Transformation Phase II 5 OSAP today, OSAP tomorrow 6 OSAP in the digital age

What is OSAP?

OSAP is financial assistance OSAP is an integrated program funded by both the federal and provincial government – ONE payment; ONE repayment. OSAP provides needs-based assistance through loans and grants to help qualified students and families with the cost of postsecondary studies. More than 380,000 students per year benefit from OSAP grants/loans, representing almost 60% of full-time Ontario university students and almost 70% of full-time Ontario college students. 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.

Who is eligible for OSAP? To be eligible for OSAP, students must be: A Canadian citizen, permanent resident or protected person (refugee) An Ontario resident Currently attending or entering an OSAP-approved program and school Currently enrolled in or entering a certificate, degree or diploma program Ontario students can still receive OSAP if they enroll in a program offered at a college or university outside of Ontario.

Aid is based on students’ unique circumstances Educational Costs $15,000 Financial Contribution $3,000* Financial Need $12,000 *Students are expected to make a flat rate contribution of $3,000 toward their education.

Aid is based on students’ unique circumstances Allowable Educational Costs Expected Financial Contribution Calculated Financial Need minus equals Tuition and Compulsory Fees* Books and Supplies** Equipment Computer Costs Personal Living Expenses Child Care Travel Student Fixed Contribution 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) * For some programs (graduate, professional and high demand college programs), Ontario caps how much tuition and fees it will recognize in the OSAP assessment. Canada recognizes full tuition. ** Includes such costs as uniforms, minor laboratory equipment, professional association and examination fees, field trips, and graduate thesis costs.

Applying for OSAP How do students apply for OSAP? Students can apply for OSAP online at: ontario.ca/osap. When is the deadline to apply? Students will be able to register for OSAP in late November 2016, when they apply to college/university through the Ontario Universities Application Centre and/or the Ontario College Application Service. The OSAP application will be released in Spring 2017. OSAP will send registered students an email when the application is available. Students should apply as soon as they are accepted into a program. Students have until 60 days before the end of the study period. Late applications can cause delays and late fees for students. How often do students have to apply for OSAP? Students must apply for OSAP every year.

Participation – Most students on OSAP

OSAP – Many student choices In 2014-15, ~$4.0B in OSAP assistance was issued to Ontario students. $1.2B $1.9B Canada issued $1.7B in loans; $500M in grants. Ontario issued $360M in net loans; about $1.0B in grants.

OSAP Transformation Context for action

Context for action The government has introduced changes to make OSAP simpler and fairer for students resulting in more than double the number of students accessing OSAP over the past 12 years. However, 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.

Limitations of the current system Mature learners, and those with children, are not sufficiently supported with non- repayable grants and help with tuition costs. Back-end support, like debt relief through the Ontario Student Opportunity Grant (OSOG) and the Tuition and Education Tax Credits, is not well-understood by students. Many low-income students are disadvantaged because they go to low-cost programs (e.g., college), and incur a larger proportion of their costs as loans. 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. ‘Net’ tuition, or the price of tuition/education after non-repayable government assistance, is largely unknown to students in Canada.

Student and parent attitudes about OSAP Ontario recently undertook a research project using focus groups and surveys to understand student and parent attitudes and knowledge of OSAP. What we learned: Parents are concerned about where the money to pay for postsecondary studies will come from, and how much debt their children will be left with. One-third of students surveyed have considered not attending or dropping out of school because of financial worries. Parents and students would like to see information become easier to access, and the eligibility factors be made easier. While most parents have some awareness of grants, many are not sure how the grants work or even if their children have applied. They also do not consider the grants offered through OSAP to make up a large part of the funding and expect that most will have to be paid back.

Objectives of reform 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, by applying up-front grants directly to reduce tuition/educational costs. Work with colleges/universities to implement by Sept 2018, an offer and 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 students. 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.

Timing of transformation Two phases with full implementation 2018-19. Phase I (2017-18): Introduce new OSAP (Ontario Student Grant) Increase Ontario weekly assistance limits Phase II (2018-19): Reduce parental and spousal contributions Net (or free) tuition system in place

OSAP Transformation Phase I 2017-18 academic year

Tuition & Education Tax Credits Phase I: The new OSAP Ontario is replacing many provincial grants with a single new Ontario Student Grant starting in the 2017-18 academic year. Financial support previously provided at various times (e.g., start of studies, end of studies, or years later) will now be provided to students upfront to help with education costs as they are incurred. Ontario Student Grant 30% Off Ontario Tuition grant Ontario Distance Grant Ontario Student Opportunity Grant Ontario Child Care Bursary Ontario Access Grant NEW! Tuition & Education Tax Credits

Phase I: The new OSAP Starting in September 2017, the changes to OSAP will result in free tuition and no provincial debt for: Dependent students whose annual family income is less than $50,000. Independent students whose annual income is less than $30,000. Free tuition = grants from OSAP that EXCEED the cost of average tuition Grants Loans

Phase I: Increase OSAP assistance levels Ontario’s maximum OSAP assistance levels will be increased. $160/week $180/week for single students $360/week $450/week for married and sole support students Canada provides $210/week for all student types Maximum OSAP Assistance Levels 2016-17 2017-18 Weekly 34-week program Single students $370 $12,580 $390 $13,260 Married / sole support students $570 $19,380 $660 $22,440 *Amounts based on both federal and provincial aid.

Phase I: More generous grants and loans Students with family incomes above $50,000 will receive a mix of grants and loans, based on their family size and income. For a family of 4, grant funding is available if the family income is up to $175,000 per year Maximum family income per year Family size (total parents + kids)

College student Living away from home Costs: $14,308 Family income: $40,000 Student contribution remains the same Loans reduced No Ontario loan (Canada loans only) Loan continues to be interest-free while in full-time studies Receives more grants – grants cover tuition Note: Funding reflects full roll-out of OSAP transformation (2018-19) and implementation of the 2016 Federal Liberal platform commitments regarding Canada Student Grants.

University Art & Science student Living away from home Costs: $18,001 Family income: $40,000 Student contribution remains the same Loans reduced No Ontario loan (Canada loans only) Loan continues to be interest-free while in full-time studies Receives more grants – grants cover tuition Note: Funding reflects full roll-out of OSAP transformation (2018-19) and implementation of the 2016 Federal Liberal platform commitments regarding Canada Student Grants.

Phase I: A new online tool A new tool to help students find out how much grants and loans they could be eligible for under OSAP in the 2017-18 academic year. Is available online at ontario.ca/osap and was launched on November 25, 2016.

Phase I: OCAS and OUAC integration On November 29, OUAC/OCAS provided direct links for students to register on the OSAP website for students applying to college and/or university 2017-18 financial aid. Students selecting the link from OCAS or OUAC are now directed to a special landing page where they are able to register for OSAP. In addition, OCAS is passing OSAP profile information so that a student does not need to re- enter this information on the OSAP site. Students coming from OCAS or OUAC are advised that the OSAP application for 2017-18 will be available in the spring of 2017 and OSAP will send them an email when the application is available. A link to the new tool is available from the new OSAP landing page allowing students to get a broad estimate of the amount of funding they may be eligible for.

OSAP Transformation Phase II 2018-19 academic year

Phase II: Reduce parental contributions Ontario will reduce the contribution it expects from parents of dependent students and align more closely with Canada. For example, Ontario would not expect a family of four to contribute until an income of $86,000/year is reached, up from $68,000/year today.

Phase II: Reduce spousal contributions Ontario will also reduce required spousal contributions. Currently, Ontario expects spouses to contribute 70% of actual income net of taxes and deductions for the study period weeks. Starting in 2018-19, contribution rates will be graduated, starting at 25% for students with little discretionary income and gradually increasing for students with more income.

University Art & Science student Married with one child Costs: $31,319 Family income: $40,000 Spousal contribution reduced Loans reduced No Ontario loan (Canada loans only) Loan continues to be interest-free while in full-time studies Receives more grants – grants cover tuition Note: Funding reflects full roll-out of OSAP transformation (2018-19) and implementation of the 2016 Federal Liberal platform commitments regarding Canada Student Grants.

Phase II: Net tuition “Net tuition” is applying students OSAP aid and institutional aid, if applicable, against their tuition fees. Tuition OSAP grants Net tuition $6,000 $9,000 $0 Net tuition will benefit students in a number of ways, including: Increased clarity and transparency about the out-of-pocket cost of tuition. Simplified payment process – payments will be made directly to institutions by OSAP on students behalf. Improved financial planning for students and their families. More informed postsecondary education decision making.

Four components of net tuition There are four components to net tuition: Net planning Integrated application Net offers Net billing Improved financial planning for students and their families, along with improved communications. New/updated tools to help students understand what the changes to OSAP can mean for them. Integrated applications for university and college – OUAC/OCAS - with OSAP applications, so students only need apply once. This will streamline applications and allow for timely Net offers. Net tuition based on OSAP estimates will be communicated to students on their offer of admission communication to assist students with understanding their net tuition costs. OSAP estimates will be based on tuition and costs from the previous academic year. Net billing will occur after the actual OSAP assessment has been calculated. A student’s OSAP assessment/disbursement information will be sent to institutions to net out the student’s balance owing.

Proposed net tuition system

OSAP today, OSAP tomorrow

Timing of aid Current distribution of financial support Sept. 2015 Jan. 2016 Aug. 2016 Future tax credits $7,140 (loans) $1,311 (grants) $2,982 (loans) $1,311 (grants) $2,722 in loans are forgiven $2,030 ($530 from Ontario) 1ST OSAP instalment 2nd OSAP instalment OSOG TETCs Future distribution of financial support $7,140 (loans) $1,923 (grants) $1,818 (loans) $4,119 (grants) 1ST OSAP instalment 2nd OSAP instalment Sept. 2015 Jan. 2016 *Example is based on university costs.

NEW! Impact of the changes The changes to OSAP will make tuition free for thousands of students and reduce the cost for many more. NEW! Free tuition = grants from OSAP that exceed the cost of average tuition OSAP grants will be focused on offsetting the cost of tuition first. Students, and their families, should have a clear understanding of how much tuition actually costs when non-repayable aid is taken into account. More than 210,000 students will receive free average tuition 4 out of 5 OSAP students with family incomes below $90,000 will receive free average tuition Nearly 85% of OSAP students will receive more grants

OSAP in the digital age

OSAP in the digital age Ontario is redesigning OSAP for the digital age, making it faster, and easier to use, so that students can apply, check their status and manage their financial assistance anywhere, anytime, on any device. Mobile Tablet Desktop

Communicating the changes Our digital marketing campaign finished in January. We’re ramping up our communication efforts in March to coincide with the launch of the application. Facebook Instagram Kits Twitter Snapchat

Stay informed about the changes to OSAP! Visit OSAP tools and resources to help educate students (and each other) about OSAP. Go to Ontario.ca/OSAPpartners Sign up for our monthly OSAP Transformation e-Newsletter! Get on the list, email: OSAP.Transformation@ontario.ca

Questions?