Ontario Shifts Student Aid to Loans, Raising Urgency for Alternative Grants
February 27, 2026 · 3 min read
Claire Cummings
Hook
On February 12, Ontario rocked the higher education sector by ending its seven-year tuition freeze and allowing a 2% annual tuition hike for three years. More consequentially, it overhauled the Ontario Student Assistance Program (OSAP), slashing non-repayable grants from a maximum of 85% of student aid to just 25%. The remaining support will now take the form of student loans—an unprecedented shift that will deepen student debt and push institutions to seek new sources of grant funding.
Context
Ontario launched its tuition fee freeze in 2019 with a 10% tuition cut, earning the province the lowest tuition rates in Canada. The freeze, however, stressed institutional budgets and prompted years of sector warnings about financial sustainability. With this month’s announcement, colleges and universities are permitted to raise tuition by 2% annually for three years and, thereafter, either 2% or the average three-year inflation rate—whichever is lower. The government says these increases are among the lowest in Canada and are coupled with additional billions in system-level funding.
The bigger disruption, however, is the OSAP overhaul. Where once students could rely on receiving the majority of their aid as grants, the new structure flips that ratio. Students will receive at most 25% of their OSAP as grants, with the majority delivered as loans. Premier Doug Ford framed this as necessary to rescue a financially unsustainable model, arguing it allows institutions to avoid closures while protecting taxpayers. But many argue that what the government gives with one hand—limited tuition increases—it takes with the other by reducing grant support, leaving students worse off overall.
Higher education policy experts and student advocates alike warn these changes could undo progress in access and affordability, increasing the net cost for Ontario students at a time of mounting cost-of-living pressures.
Impact
For Students
The revised OSAP structure means students from lower- and middle-income families will see their debt loads soar. For years, Ontario had championed a high-grant model that made pursuing degrees more accessible, especially for those facing economic barriers. Now, students must be prepared to finance their education mainly through repayable loans, which will increase long-term debt and likely require more part-time work or postponements in study. High schoolers, like Grade 12 student Xingtong Shan, report these changes are actively discouraging postsecondary ambitions.
For Universities and Colleges
On paper, the ability to hike tuition by 2% per year offers some fiscal relief after years of deficits. Yet, the increases will only partially address the sector’s financial woes, with funding gaps still looming large for smaller or more rural institutions. Crucially, as student grants shrink, universities face heightened pressure to boost their own non-repayable grant programs and scholarships to attract and support diverse student populations—particularly international and low-income students.
For Nonprofits and Research Teams
Organizations that previously partnered with universities for student support or received provincial grants may see increased demand for their services. Expect more pressure to establish new bursaries, hardship funds, and support programs—areas ripe for external grant funding and philanthropic investment.
Action
Students:
- Explore alternative funding sources: Start researching university-specific grants, scholarships, and bursaries immediately. Leverage platforms like Yconic, ScholarshipsCanada, and institution-specific databases.
- Engage with advocacy efforts: The Canadian Federation of Students-Ontario (CFS-O) is protesting these changes on March 4, with ongoing mobilization. Participation can help amplify student voices and drive attention to alternative solutions (details here).
Institutions and Organizations:
- Audit current student financial aid portfolios: Review and, where possible, expand grant and bursary programs.
- Seek new partnerships and funding streams: Apply for provincial, federal, and private foundation grants that can shore up student support services and offset new financial pressures.
- Advocate for targeted government support: Coordinate with student groups and sector associations to communicate need for more robust grant-based funding, especially for vulnerable student cohorts.
Outlook
Ontario’s funding shake-up will have ripple effects throughout Canada—watch for increased competition for grants, shifts in student enrollment, and renewed lobbying for equitable access to higher education. As these changes play out, stay alert for government adjustments, philanthropic response, and new grant programs aimed at mitigating debt and protecting accessibility.
Granted AI stands ready to help you identify and apply for grants and funding opportunities in the evolving higher-ed landscape.
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