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Matthew Lau: University students should get loans, not gifts

Ontario's students prefer grants to loans. But adults who want 'Hands off my education' should be willing to pay that education's full cost

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Kids these days have become addicted to other people’s money. I don’t mean seven- and eight-year-olds, who really shouldn’t be expected to support themselves, but rather many older, larger kids, mostly in their late teens and twenties. Last week at Queen’s Park hundreds of them protested the Ontario government’s changes to the Ontario Student Assistance Program (OSAP). A statue was defaced and two people arrested. Many others protested in Ottawa and other cities across the province.

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Under current OSAP rules, students can receive up to 85 per cent of their funding in non-repayable grants. The government proposes to put Ontario back in line with other provinces by limiting the grants to 25 per cent, with repayable loans making up the other 75 per cent. Spending is not being slashed: concurrent with the OSAP change, the government announced $6.4 billion in additional postsecondary funding on top of the $13 billion a year it’s already spending.

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Nevertheless, the kids are dissatisfied. Thus the Queen’s Park protest, which was organized by the Canadian Federation of Students-Ontario and where demonstrators waved signs saying: “Hands off our education.” The message is curious. By changing OSAP funding rules, the government isn’t putting its hands on anyone’s education. In fact, if anything the government is taking its hands off students’ education: repayable loans are less of an intervention than non-repayable grants.

The student protesters evidently believe that the natural state of affairs is for their university classes — which, ironically, many skipped in order to protest — to be entirely or almost entirely supported by taxpayers. And any change to this natural state of affairs amounts to government unacceptably impeding their education.

This view that they should be entirely financed by others makes sense for seven- and eight-year-olds, but grown adults do not behave this way. If people have protested on Parliament Hill to demand the government force banks to convert their mortgages into non-repayable grants while waving signs saying, “Hands off my house,” then I must have missed it.

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It is true that many students and their families do not have tens of thousands of dollars to pay for university programs, but this is what the loans are for. One protester, an undergraduate journalism student at Toronto Metropolitan University (the school formerly known as Ryerson) said, “If my OSAP becomes mostly loans, I’ll be taking on almost $80,000 just to finish my four-year program. I’m from a low-income family, I don’t have money to fall back on. If I don’t work a full-time job while doing my studies, I’m going to either be in debt for the rest of my life or I’m going to have to drop out of school.”

The question is: is her journalism degree worth $80,000? If so, borrowing to pay for the degree is not a problem because her future earnings should be more than enough to recoup the costs and repay the debt in a timely manner. And if her journalism degree is not worth $80,000, then she should not be spending $80,000 of taxpayers’ — or anyone’s — money on it.

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The government’s rationale for changing the OSAP funding model is that the current one is unsustainable. In the 2024-25 school year, total OSAP grants amounted to $1.7 billion for 473,000 students. That then ballooned to an estimated $2.7 billion in 2025-26. According to the province, without changes in the funding model, the cost was projected to increase past $4 billion by 2028-29. And that doesn’t include the cost to taxpayers of the student loans, which are interest-free while students are still in school, and are partly written off if borrowers do not end up paying.

Even after the government’s changes, the ratio of grants to loans remains more generous to students than it once was. Until 2017, grants accounted for 15 per cent of OSAP funding and loans 85 per cent, but then-premier Kathleen Wynne flipped the ratio, bringing Ontario out of line with other provinces and shovelling huge additional costs onto the backs of taxpayers.

The government’s change to OSAP funding, now making it mostly loans instead of grants, is a move in the right direction and brings Ontario back in line with other jurisdictions. Seven- and eight-year olds should be allowed to live at the expense of others, but the older, larger children taking four-year degrees should not have the same entitlement.

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