Ontario’s New Post-Secondary Funding Model: What Grant Seekers Must Know Now

Hook

On February 23, 2025, the Ontario government unveiled a seismic shift in post-secondary funding: lifting a six-year tuition freeze, slashing OSAP grants from 85% to just 25% of a typical aid package, and pledging $6.4 billion over four years to stabilize college and university finances. Grant-seeking institutions, students, and education nonprofits now face rapidly changing funding formulas, a surge in student need, and a shortfall in public support for accessible education.

Context

Ontario is at the bottom of the pack in Canada for per-student post-secondary funding—a scenario worsened by years of frozen tuition and reliance on international student fees. This year’s reforms arrive amid a sector-wide crisis: 12,000+ layoffs, 600+ program closures, and sharply rising demand as Ontario’s college-age population is forecast to increase by 20%. The Ford government’s new policy package attempts to address these pressures—but critics charge the solution only compounds affordability issues and introduces more uncertainty for educational equity.

Here's the breakdown:

• Tuition will rise 2% for domestic students in fall 2025
• OSAP (Ontario Student Assistance Program) grants shrink from up to 85% of support to just 25%—the rest will be repayable loans
• $6.4B in new post-secondary funding focuses primarily on base operating grants (a roughly 6% increase, still the lowest provincial investment per student in Canada)
• Private training providers are being supported with $2.5B+ via the Skills Development Fund, fueling controversy over outcomes and accountability (Details, OPSEU report)

The stakes are high: as non-grant funding replaces grants, affordability will tighten, especially for low-income and marginalized students. Many worry we’ll see higher dropout rates and less opportunity for retraining amid rapid labor market change driven by automation and AI.

Impact

For researchers and colleges/universities:

• Shifting public funding priorities: While a $6.4B bump to operating grants sounds positive, it’s likely to be absorbed by rising costs and ongoing deficits, leaving little for expansion or innovation.
• Increased competition for philanthropic and government grants: As OSAP grants shrink, the pressure on institutions to secure alternative funding for scholarships, mental health support, and retention programs will intensify.
• Funding criteria may narrow: With the government emphasizing “in-demand” jobs and program alignment with labor market needs, grantmakers may increasingly favor STEM, trades, and applied research over arts, humanities, and basic science.

For students and training providers:

• Higher out-of-pocket costs and increased debt: Reductions in non-repayable supports will likely deter some from enrolling, particularly in rural or underserved communities, and amplify demand for targeted bursaries, emergency grants, and wraparound student services.
• Smaller nonprofits and community organizations: These groups may find increased opportunity—and pressure—to step up with program delivery, counseling, and bridge funding as public supports recede.

For small businesses and workforce development startups:

• Government support through the expanded Skills Development Fund means more grants are available—but often with an emphasis on short-term workforce or retraining programs, not long-term institutional capacity.
• Scrutiny is mounting: the fund has been tied to controversies around quality and transparency, so expect grant compliance, reporting, and impact measurement to become more rigorous.

Action

What should you do right now?

1. Audit your funding mix: Colleges, universities, and training nonprofits should map out current and anticipated revenue streams—public grants, tuition, private philanthropy—and identify gaps created by OSAP and base funding shifts.
2. Update your grant pipeline: Prioritize grants supporting student retention, financial hardship, mental health, and career transition—these will see surging demand as students struggle with higher debt and costs.
3. Watch for new RFPs: Monitor Ontario’s Skills Development Fund, philanthropic foundations, and federal agencies for upcoming calls targeting the anticipated workforce crunch (especially in tech, healthcare, skilled trades).
4. Engage stakeholders: Partner with student associations, alumni, and local employers to demonstrate community support and practical impact in grant proposals—this bolsters your case for funding amid fierce competition.

Outlook

The coming months will see rapid policy implementation and pushback, including a student rally planned for March 4 at Queen’s Park. Grant seekers should expect additional tweaks as the government seeks to address criticism—and as demand for retraining, youth employment, and educational affordability climbs. Watch for new or retooled grant streams focused tightly on labor market needs, student retention, and capacity-building.

Need help navigating Ontario's new funding landscape or sharpening your next grant proposal? Granted AI is here with tools and guidance to support your next steps.