Ontario ends tuition freeze and trims OSAP grants. Here’s what it means for your family

The government says the changes respond to a financial crisis in the post-secondary sector after years of low government funding, tuition levels frozen since 2019 and sharply reduced international student numbers, which had become a major revenue source for institutions.

Colleges and Universities Minister Nolan Quinn framed it as an investment in the province’s future workforce. “If we want Ontario to have a competitive workforce tomorrow, we need to strengthen our post-secondary institutions today, and that’s exactly what our government is doing,” Quinn told The Canadian Press (1).

That may be true at the institutional level, but at the kitchen table, families are doing a different kind of math.

Tuition is rising again

Colleges and universities will be able to raise tuition by up to 2% per year for the next three years. After that, increases will be capped at either 2% or the average inflation rate, whichever is lower.

For context, average undergraduate tuition for Canadian students in recent years has been in the range of roughly $6,500 to $7,000 per year, depending on province and program, according to publicly available Statistics Canada data. Professional programs can cost far more.

A 2% increase on $7,000 is about $140 in the first year. That may not sound dramatic, but tuition rarely moves alone. Books and supplies commonly add another $1,000 to $1,500 per year, depending on the program. Some science and health programs can run higher.

Then there’s living away from home.

If your child moves out for school, room and board can easily run $10,000 to $15,000 per academic year. On-campus residence with a meal plan at many Ontario universities often lands in that range. Off-campus rent, utilities, groceries and transportation can be similar or higher in larger cities.

Add it up and a year away at school can realistically cost $18,000 to $25,000 or more. Multiply that by four years and you are looking at six figures.

That is why frozen tuition and digestible levels of OSAP matters greatly to so many families.

Grants shrinking, loans growing

Right now, about 85% of OSAP funding is provided as grants and 15% as loans, according to the government. Starting this fall, students will receive a maximum of 25% of their OSAP funding as grants. The rest will come as loans.

If you were planning on grants doing much of the heavy lifting, that’s a significant shift.

Quinn noted how demand for OSAP has been rising significantly and that growth was unsustainable. “This will ensure sustainability and balance for the system,” he said. “We want to ensure that all students in future generations have access to OSAP as well.”

In line with federal changes, students at private career colleges will no longer be eligible for OSAP grants, only loans.

From an institutional perspective, the funding is welcome. Steve Orsini, president and CEO of the Council of Ontario Universities, told The Canadian Press, “this new investment strengthens the very foundation our universities provide, greater sustainability and long-term planning to support our students and local communities.”

Maureen Adamson, president and CEO of Colleges Ontario, told CP that “college graduates are the boots on the ground. Skilled workers are needed more than ever, and this funding expands regional opportunities for learners and employers alike.”

All of that may be true. But if you are saving with a specific number in mind, the practical takeaway is simple: Expect students to take on higher tuitions and carry more debt than you may have assumed a year ago.

Don’t panic — plan

This is not a panic moment. It is a planning moment.