Social Policy in Ontario

Ontario got two things right with post-secondary funding — and one thing very wrong

Posted on February 21, 2026 in Education Debates

Source: TheStar.com — Authors: Daniel Corral

TheStar.com -Opinions/Contributors
Feb. 21, 2026.    By Daniel Corral, Contributor

“Increasing tuition and provincial funding will improve the financial conditions facing colleges and universities. However, shifting OSAP from majority grants to loans will make it harder for students, particularly those most economically disadvantaged, to attend, persist, and graduate,” writes Daniel Corral.

Last week, the Ontario government made three sweeping changes to post-secondary education: it allowed for an increase to tuition fees, announced $6.4 billion in new institutional funding and overhauled the Ontario Student Assistance Program (OSAP) by flipping the financial aid structure from predominantly grants to predominantly loans.

The first two of these decisions are sound and severely overdue. The third threatens to undermine both.

As a higher education researcher, I have spent years studying how tuition changes affect university enrolment and finances. Years of frozen tuition and federal caps on international students have left institutions reeling; colleges alone have cut $1.4 billion in costs, suspended over 600 programs, and eliminated more than 8,000 positions.

A modest 2 per cent annual tuition increase gives institutions room to maintain educational quality rather than quietly degrading it through larger classes, fewer courses, and reduced student services. The $6.4 billion funding injection begins to address a structural deficit in a province that has chronically underfunded its post-secondary system.

Higher education tends to be the “balance wheel” in provincial budgets, the sector that absorbs cuts in tough economic times. This investment is an overdue recognition of that pattern.

Here is where the government got it wrong: despite propping up institutional finances, it is letting individual students down. The province is restructuring OSAP so a maximum of 25 per cent of a student’s provincial financial aid will come as nonrepayable grants and 75 per cent as loans.

Under the old framework, a student receiving $6,000 in provincial OSAP aid could receive up to $5,100 in grants. Under the new rules, that same student receives a maximum of $1,500 in grants and at least $4,500 in loans, or roughly $3,600 more in repayable debt each year.

Over a four-year degree, that amounts to more than $14,000 in additional debt, on which provincial interest begins accruing immediately upon leaving the institution. Although federal student aid is not part of this provincial restructuring, this produces serious financial constraints for the thousands of students whose packages rely on the provincial component.

Experimental research, including my own, suggests that most students focus on the net tuition price, what they pay after subtracting grants and scholarships. When net tuition is affordable, students from all backgrounds are willing to borrow.

A drastic increase in net price is bound to affect students’ choices: whether to pursue a post-secondary degree, which school to attend, or which major to study. Currently enrolled students face difficult decisions too, since the restructuring applies to all students.

Research shows that rising tuition increases employment among full-time students and working more hours means fewer hours to study and engage in co-curricular activities, both of which are strongly associated with timely degree completion. These upper-year students enrolled under a different financial aid regime and now face loan burdens they did not anticipate.

Despite official claims, the current restructuring is neither the only, nor the best option for OSAP’s long-term sustainability. The government argues that the previous grant ratio was “dramatically out of line with other jurisdictions.”

This is a legitimate concern. No financial aid program can serve students well if it cannot sustain itself. However, as the Ontario Undergraduate Student Alliance notes, the government took a measured approach to tuition by phasing in 2 per cent increases, while drastically restructuring OSAP overnight to loan ratios never seen before.

If sustainability were the goal, the government could have maintained higher grant ratios for the most disadvantaged students or offered a longer repayment grace period.

Instead, it changed the model with little notice, when affordability nationwide is at its lowest in recent memory.

The government got two out of three right. Increasing tuition and provincial funding will improve the financial conditions facing colleges and universities. However, shifting OSAP from majority grants to loans will make it harder for students, particularly those most economically disadvantaged, to attend, persist, and graduate. There are other, more equitable pathways forward.

Daniel Corral is an assistant professor at the Ontario Institute for Studies in Education at the University of Toronto, where he researches how institutional policies and finances shape postsecondary access and outcomes for historically underserved student populations.

https://www.thestar.com/opinion/contributors/ontario-got-two-things-right-with-post-secondary-funding-and-one-thing-very-wrong/article_7a75706a-ca81-4e3a-a5ac-ab0ca8cac051.html

Tags: budget, Education, ideology, jurisdiction, participation

This entry was posted on Saturday, February 21st, 2026 at 8:55 pm and is filed under Education Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.