Why is more of your OSAP now a loan? What changed, and what you can still say no to
For Ontario college and university students who apply for OSAP. As of October 2026.
Many students opening their OSAP estimate are finding more of their aid listed as a loan and less as a grant. It is not a mistake. Ontario changed how the provincial part of OSAP is split between money you keep and money you pay back.
Grant or loan: why it matters
- A grant is money you do not have to pay back.
- A loan is money you need to repay once you are done school.
- When you apply, OSAP automatically considers you for both.
What changed
Ontario says the changes to the provincial portion of OSAP announced on February 12, 2026 apply to programs that start on or after August 1, 2026. Under these changes:
- Students receive more of their provincial OSAP funding as loans rather than grants.
- Students at publicly assisted colleges and universities in Ontario and Canada, and at private institutions in Ontario, receive a larger share of their provincial funding as loans.
- Students enrolled in career colleges receive all of their provincial OSAP funding as loans.
Ontario says information on how the changes affect your estimate is available through the 2026 to 2027 OSAP application.
What you can still say no to
If you are a full-time or part-time student and you do not want the loan, ontario.ca says you can decline it after your application is approved.
If you take the loan: what repayment looks like
- You have a six-month grace period after you graduate or leave full-time studies before repayment starts.
- Interest is charged on the Ontario portion during the grace period, at the prime rate plus 1%. Since April 1, 2023, Canada does not charge interest on the federal portion.
- Payments go to the National Student Loans Service Centre, not to OSAP, usually over 9 and a half years.
- If payments become hard, the Repayment Assistance Plan can lower them for six months at a time, and you may not have to pay at all if your family income is under the limits ontario.ca lists.
- A loan goes into default after 270 days without required payments, which can affect your credit and future OSAP.
What you can do
- Open your OSAP application and look at how much is a grant and how much is a loan.
- Take only the loan you need. If you do not need it, decline it after approval.
- Plan with the OSAP Aid Estimator before you commit to a program.
- Ask your school’s financial aid office about your own estimate.
- Keep the repayment rules in mind, including the grace period and the Repayment Assistance Plan.
The point to remember
More of Ontario’s student aid now comes as loans, and career college students get all provincial funding as loans. You are not stuck with a loan you do not need: full-time and part-time students can decline it after approval.
Check the official pages before you act:
Join the conversation
Did your OSAP estimate change? Share your questions in the comments. Please do not post your income, student number or documents.
This article is general information on Canadian law, as of October 2026. It is not legal advice and does not create a representative relationship. Always consult a licensed legal professional for your specific situation.
