Common myths about OSAP include the idea that it’s a free money program, that all First Nations students automatically receive funding, and that debt is not a factor in OSAP assessments, when in reality, OSAP is a loan and grant program, funding is not automatic for all First Nations students, and parental debt is not considered in the OSAP assessment.
Here’s a breakdown of some common OSAP myths and the truth:
Myth 1: OSAP is free money.
- Truth: OSAP is a student loan and grant program. While grants are non-repayable, loans must be repaid.
- OSAP grants can be converted to loans:
If you withdraw from studies within the first 30 days and don’t return as a full-time student within 5 months in the same academic year, the government may convert all or part of your OSAP grants to a loan.
Myth 2: All First Nations students automatically receive OSAP funding.
- Truth: Only “status Indians” recognized by the federal government are eligible for funding through Indigenous and Northern Affairs funding.
- Even when First Nations people are eligible for funding, it doesn’t mean they automatically get it.
Myth 3: OSAP doesn’t consider parental debt when assessing eligibility.
- Truth: The initial OSAP application only asks for parental income and student contributions, and not for parental debt.
- OSAP assessments are standardized to ensure equitable assessment of eligibility, and individual debt load is not included in each assessment.
Myth 4: You can’t use RESP money and still get OSAP.
- Truth: Using money from your Registered Education Savings Plan (RESP) doesn’t affect how much OSAP you can get.
Myth 5: OSAP is only for students with low incomes.
- Truth: While OSAP is designed to help students from low-income backgrounds, it can also be used by students from families with higher incomes.
- Grant funding is available to families with incomes above $160,000, as the income threshold increases with additional family members.
Myth 6: You have to start repaying your OSAP loan immediately after graduation.
- Truth: You have a six-month grace period after graduation or leaving full-time studies before you need to start repaying your OSAP loan.
- During this 6-month grace period, you will not be charged interest on the Ontario portion of your loans, but you will be charged interest on the Canada portion of your loans.
Myth 7: OSAP is a simple program to understand.
- Truth: OSAP can be complex, and many students are confused about aspects of the program, according to a survey by the Higher Education Quality Council of Ontario (HEQCO) [3].
- For example, students are often confused about the repayment plan and the grace period.