The University of Toronto’s St. George campus on Wednesday.Fred Lum/The Globe and Mail
Ontario’s changes to funding for postsecondary institutions and student aid will result in small tuition increases but big additional costs for some low-income students.
Premier Doug Ford’s government announced on Feb. 12 that it would boost postsecondary funding by more than $6-billion over four years while lifting its years-long freeze on domestic tuition at public universities and colleges.
Postsecondary schools will be able to increase tuition for Canadian students by up to 2 per cent a year for the next three academic years and by the lower of either 2 per cent or an average annual inflation rate after that.
At the same time, the government also said it would start providing financial aid through the Ontario Student Assistance Program, or OSAP, mostly in the form of loans, rather than grants, which don’t require repayments. The reform caps a student’s grants at 25 per cent of their provincial funding, down from a current maximum of 85 per cent.
The changes would amount to tuition increases of less than $200 a year for most undergraduate degrees. But they could increase debt loads by thousands of dollars per year for the students that rely most heavily on financial aid, according to an analysis by higher education consultant Alex Usher.
Ontario’s tuition increases are eminently manageable. But the financial aid changes will sting
“The burden is falling most heavily on the students who are least able to pay it,” said Mr. Usher, president at Higher Education Strategy Associates.
Annual domestic undergraduate tuition in Ontario typically ranges between around $6,000 to more than $7,000 a year, according to Universities Canada, which represents institutions of higher education across the country. Based on a tuition of $6,500, a 2-per-cent increase would work out to $130 more in fees in the first year.
“It’s very manageable, even for a family of limited means,” said Mr. Usher.
It helps, also, that rents have been falling across the province for well over a year, reducing expenses for many students who live away from home.
Those lower housing costs are, in part, the result of federal curbs to international student arrivals. In 2024, Ottawa announced drastic cuts to international student permits, a move that shrunk a critical source of revenue for universities and colleges in the form of foreign tuition fees, which are much higher than domestic ones.
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Ontario’s decision to boost postsecondary funding and end the tuition freeze reflects the need to shore up universities’ and colleges’ finances in the wake of those federal curbs.
But at the same time, lower inflows of international arrivals have also reduced demand for housing, contributing to recent rent declines that likely made it easier for many students to afford living off-campus.
In Toronto, for example, the average rent for those living with roommates dropped to less than $1,170 from more than $1,300 a month two years ago, according to rental platform Rents.ca. In Ontario as a whole, rents for shared accommodations have fallen below $1,000 a month for the first time in three years, according to the same data.
But Mr. Usher warned Ontario’s reforms to OSAP would still leave the province’s lowest-income students significantly worse off.
For a student who is eligible for the maximum amount of OSAP assistance, the changes would mean taking on an additional $3,500 a year in loans that would have previously been available as grants, Mr. Usher estimated based on the latest available data on financial-aid amounts.
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While the new rules would keep the overall assistance students can receive through OSAP the same, they would force students to take on more debt, he added.
The Ford government says the changes are necessary to maintain the long-term viability of OSAP.
“The restructuring of the OSAP grant and loan allocation not only ensures that students with the highest need are able to receive grants, but that grants will be available for future generations of low-income students,” Bianca Giacoboni, press secretary for Nolan Quinn, the Ontario Minister of Colleges, Universities, Research Excellence and Security, said in an e-mail.
Mr. Usher said the reforms would have the worst impact on low-income students who qualify for the maximum amount of aid and have limited ability to work while in school. Many single parents would fall in this category, he added.
The cuts to student grants will also make it harder for workers in their 30s and 40s to go back to school after a job loss or to pursue a new career, Mr. Usher said.
While the changes are unlikely to result in lower enrolment from students coming out of high school, they could dissuade middle-aged Ontarians – who have a shorter time horizon to repay their student debt – from returning to the classroom, he said.
