Ontario is planning one of the largest year-over-year increases in student lending in recent financial estimates as changes to the Ontario Student Assistance Program (OSAP) take effect for the 2026/27 academic year.
For the 2025/26 year, the province budgeted $631.6 million for student loans. For 2026/27, that figure rose to $3.018 billion, an increase of approximately $2.387 billion, or 378 per cent. Ontario’s 2026 budget directly connects the increase to the changes to OSAP announced back in February to take effect on Aug. 1.
The budget states that “the increase in Net Loans and Investments primarily reflects higher projected loan disbursements associated with […] OSAP policy changes effective in the 2026/27 academic year.”
The $2.387 billion increase therefore provides a starting point for estimating how much additional debt could ultimately reach students. These estimates are not a projection of what an individual student will receive, as the number of recipients will change, students receive different amounts of OSAP and the increase will not be distributed equally. OSAP loans and grants are not one-size-fits-all, but the estimate can provide a scale for the additional borrowing built into the provincial estimate.
Ontario reported providing OSAP financial assistance to approximately 494,000 full-time students during the 2024/25 fiscal year. If the additional $2.387 billion in loans projected for 2026/27 were distributed across roughly the same number of full-time recipients, it would mean approximately $4,832 in additional lending per recipient in one year.
If this additional $4,832 is sustained for four years for the same borrower, it would amount to approximately $19,300 in additional loan principal by the end of a four-year degree.
A 2018 report from Statistics Canada illustrates why an increase of that magnitude would be significant for borrowers.
The size of a graduate’s debt was strongly associated with how quickly it was repaid. Among 2015 graduates of bachelor’s degrees, those who left school owing at least $25,000 had repaid approximately 42 per cent less of their debt three years later than otherwise comparable graduates who started with less than $5,000 in debt. The analysis controlled for factors including employment income, family situation and demographic characteristics.
The same study found that 64 per cent of graduates who had student debt in 2015 still had outstanding debt three years after graduating. Graduates who still owed money after three years had started with a median debt of nearly $22,000, more than twice the roughly $10,000 median among those who had completely repaid their debt.
More recent federal research suggests a similar conclusion about larger loan balances. An Employment and Social Development Canada evaluation found that borrowers carrying less than $25,000 in debt were less likely to encounter repayment difficulties. Overall, 52 per cent of surveyed borrowers making student-loan payments described those payments as somewhat or very difficult, while 21 per cent reported making at least one late or missed payment.
Additionally, the Ontario portion of a student’s OSAP loan accumulates interest after a student leaves school. While there is a six-month grace-period after a student leaves full-time studies with no interest, the interest is accrued during the six-month period before mandatory repayment begins.
The province says that OSAP loans are normally repaid over nine and a half years. In an example provided on its repayment website, the province calculates that a $20,000 loan at an illustrative five-per-cent interest rate would require payments of $226 per month over that period.
That $20,000 example is close to the approximately $19,300 in additional principal produced by the four-year scenario based on Ontario’s planned increase in lending. Although actual payments would depend on the amount borrowed and the interest rate when repayment begins, the available data allows for inference on the scale of impact that the OSAP changes will have on students in the coming years.