5 questions we have about Ontario’s free tuition plan

Who are the real winners of the policy?

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The Ontario government released its budget yesterday and the biggest showstopper policy was a complete overhaul of the province’s student financial aid services. Under the new Ontario Student Grant (OSG) system, to be implemented in the 2017/18 school year, lower-income students are going to be eligible for enough grants to cover their entire college or university tuition. It’s pretty exciting news for many young Ontarians (as well as their parents, obviously). “There are some very, very good components to it,” says Colin Busby, associate director research at the C.D. Howe Institute. “You’re taking this assortment of programs, bringing it into one program, one that’s very transparent and readily understood and available to people and to potential students.” But the announcement also raises a number of questions. More details will be revealed in the coming months but in the meantime, here’s what we know:

1. Who qualifies and how?

Ontario students from families that earn $50,000 or less will be eligible for larger grants than under the current system. Unlike loans through the Ontario Student Assistance Program (OSAP), they don’t have to pay anything back, which will ideally see them graduating with much less debt. Many students from families earning $83,000 or less will also receive more grant money upfront to pay for tuition than through the 30% Off Tuition Grant that everyone currently qualifies for.

2. Is it really free?

That depends on your family income and what form of postsecondary education you’re pursuing. The government estimates that 90% of dependent college students and 70% of dependent university students, whose parents earn $50,000 or less, will receive enough grants to cover the average cost of tuition. For those whose parents earn up to $83,000, approximately 50% of students will receive non-repayable grants substantial enough to cover tuition. While tuition won’t be free for all, the Ontario Liberals promise that no one will receive less than what they’re eligible for now through the 30% Off Tuition grant.

What happens if I default on my student loan? »

3. Where is all the extra money coming from?

The Ontario Student Grant is basically a reshuffling and consolidation of existing loans, grants and tax credits. It’s meant to simplify what is currently available to students. The government is also cancelling tuition and education tax credits, and those funds are being directed to the new grant.  In essence, the money you would have received in tax credits, possibly years after graduating, you will now get upfront in order to avoid taking on as much debt.

4. Who are the winners and losers?

The biggest winners of this new policy are obviously college students from low-income families. In a hypothetical situation, the Ontario government states that a college student living at home with a family income of $40,000 would receive grants of $5,383, which is more than enough to cover the average tuition of $2,768. It would also reduce the loan the student would have taken from $3,143 to just $531. Bear in mind, this is after the provincial student aid transformation has rolled out completely in the 2018-19 year and taking into account the federal Liberal promise to boost Canada Student Grant maximums.

Meanwhile, high-income-earners (those earning between $90,000 and $160,000) wouldn’t receive enough in grants to cover even half of either college or university tuition.

5. Do other governments offer free tuition?

Yes, but not in Canada. Germany, Italy, Finland, Sweden, Denmark and Norway all offer students free tuition for post-secondary education.

26 comments on “5 questions we have about Ontario’s free tuition plan

  1. thanks for this piece. Still leaves me with a question – if a family household income is above $83,000, will their college student who got a $1500 tuition rebate this year be eligible for that rebate next year?

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  2. Do young adults 20-24 quailify for these grants on there own if theyre living on their own without parents ?

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  3. Another question: Do we qualify if permanent residence is in Ontario but going to school in Nova Scotia or Alberta?

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  4. The cancellation of tax credits seems to be in fashion for governments. The federal convservatives did this with the dependant credit axed for the child care benefit and now the Ontario liberals are doing the same now with tuition and education credits. In both cases, money is taken from a larger proportion of people and given to a smaller proportion. I wonder what’s next!

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  5. How to pay for college? Simple! Work Part time. 11$ / hr and 20 hours a week nets you 800 so a month. X 12 months. You’re close to 10 Grand! More than enough!

    The other way, Tuition is free, if you finish your education within the prescribed time, full time and a certain GPA. I really think certain programs, should get more benefit than others. I don’t endorse free tuition for Arts and perhaps even business. Focus should be on STEM. The government and the people need to win somehow, and we need to attract businesses in these demanding fields. The fastest growth segment just can’t be RETAIL anymore, it needs to change.

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    • Overly simplistic answers are saddening. “Work part time and save $10,000.” What about students who work part-time while in secondary school, because they need to contribute to groceries, utilities, rent, transportation costs? Not everyone is blessed with parents who have stable income or regular employment – or even blessed with having a stable home to live in. This new grant system will help those who need it. I hope other provincial governments follow suit.

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      • very tru I lost my dad and he left us with debt . we would love to go to school to help our mother

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  6. i want to please ask that what about students that have low income but starting school this sepetember 2016. Will they would considered when all these law enforced from 2017 or they would be exempted

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  7. Doesn’t answer my question I had a Ontario Student Loan for Everest College figured out it was a scam Sued them and then attended Sheridan by taking out a student line of credit cause I could no longer get another Student line of credit I was told. This is BULL SHIT if I can’t get my college written off.

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  8. Uh… What about existing students who are currently enrolled and carry huge amounts of debt?

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  9. Assuming this action arose from the crippling debt many postgrads are faced with now, I hope the government can extend their generosity in some degree to those grads who are currently in low-income jobs, struggling to pay off even the interest on their OSAP loans.

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  10. By cancelling tuition and education tax credits, they are essentially penalizing hard working savers who try to be self sufficient and contribute to an RESP by taxing the kids more, one step closer to communism. Viva La Revolucion!

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    • Not fair taxing more the harworking people and give it to lazy people

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  11. Is there any word on how the cancelling of the tuition tax will apply to students who have already started or graduated post secondary education? Ie. Will we lose unused tax credits when this is implemented in 2017/2018?

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  12. What happens to existing tax credits? Are they cancelling those? I went to school (but am struggling to find work), but want to eventually use my tax credits. It would seem to be unfair to be told you can have tax credits and use them in later years, then cancel them. I hope someone clearly answers this. Thank you

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  13. I have made several years worth of contributions to my daughter’s RESP but haven’t used the money yet. I presume that I can now sponge off Ontario taxpayers instead of actually using those funds. Is this supposed to be fair? Why bother trying to be responsible?

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  14. Nothing is free. Ontario is over $300 Billion in debt. That’s twice as much as California with half the population. Ontario is the largest non-country borrower in the world. Generations to come will be saddled with this enormous debt. But the province comes up with ways to keep spending.

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  15. What happen if the child has purchase RESP, do they still qualified for the grant ? The government has not explained other conditions once this comes to effect.

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  16. Wait, where is the average in the 2,000? I’m paying almost 8,000 a year! This is several different kinds of bs.

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    • It sure is. But what did you expect from a liberal government? They do nothing but do us in.

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  17. What a load! You say “everyone qualifies” for the 30% tuition waiver. They do not. I don’t. If you have EVER defaulted on a loan, you do not qualify. Even if you have since paid it off, they still consider you ineligible. So there’s that. Also, what is to stop everyone from moving to Ontario for free schooling? Nothing. Trudeau has screwed us, just as his father did. God-damned Frenchmen!

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  18. Not everyone qualified for the old grants. You were disqualified if you were out of high school more than 4 yrs. so now you also lose tuition and text book credits…..that sucks

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  19. Question, how much would it cost to offer free tuition all across Canada?

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  20. I am all for higher education but I feel this is blatant discrimination. I work hard and work full time and am pushing 60. My husband has been laid off for 10 months. Because I make over 83,000 our daughter gets nothing!!! This is wrong!! Paying for her tuition is financially a hardship now and my tax dollars will be paying for other students tuition as well. I worked hard and went back to school as a mom with small children to get an education (and had a big loan to pay back then). Now other people will get their education on me but I get nothing for my child!! There has always been OSAP with loan forgiveness for the students from low income families. Make it for everyone or no one!!!! I have a line of credit that will be there when my daughter graduates. Others will have nothing to pay back. My daughter is an excellent student and deserves the same respect given to the lower income students. I am not meaning to be harsh but this frustrates me to no end. I have to pay over $4,000 today for her tuition. Her grants that she earned for her good grades do not kick in until next semester. We need assistance right now too!!

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  21. Does this apply to those that have already graduated and are stuck with tens of thousands of dollars of student loans? Is there a way to lower my student loans if I make under $50,000 and still have student loans?

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  22. OSAP is a secretive thing. Search the internet for the exact rules and you will find nothing. The aid estimator they have is very misleading and inaccurate.
    They are not adding any new money, just reshuffling, so somebody has to loose

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