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Ontario students can't get loans because the formula to calculate them isn't ready

The reason Ontario's student loan program isn't open for new applications because the government's formula for calculating them still isn't ready for primetime.

Ontario's student loan program isn't open for applications because the new formula isn't ready

Alex Usher says this new data shows the free tuition program worked well. (Martin Trainor/CBC)

Ontario's student loan program isn't open for new applications because Ontario's universities and colleges still haven't received the complicated government formula used to calculate how much financial aid each student gets.  

Unless that formula is enshrined in code no-one can process your application.-Alex Usher

It comes after CBC News reported Thursday that some college students are having to take "a leap of faith" and accept offers of enrolment from colleges without knowing if they've secured a loan through the Ontario Student Assistance Program. 

"(I think) this is a one-year glitch because they changed the rules and didn't have it soon enough to make it convenient for students," said Alex Usher, president of Toronto-based Higher Education Strategy Associates. 

"Until two years ago this was the norm, nobody knew," he said. "Most provinces in Canada are like this." 

End of 'free tuition' 

Western University students, seen here at a London, Ont. rally in March, protest funding changes by the Ontario Progressive Conservative government. (Kate Dubinski/CBC London)

Before the previous Liberal government brought in its version of student aid reform in 2016, students were accepted in March and often couldn't apply for student aid until June. 

Usher said when the former premier Kathleen Wynne changed the system, it made it possible for students to apply for aid much sooner because when they heard back from colleges or universities, they'd already have an estimate of what their student aid was. 

"That worked for some students, but not others," Usher said, noting the most recent changes to student aid brought in by the Progressive Conservative government in January rolled back many of the Liberal-era reforms.

That included changing the grants championed by the Liberals as "free tuition" for low-income students to a mix of grants and loans and eliminating a six-month interest-free grace period for students who must repay their loans. 

OSAP costs ballooning

Ontario students say changes made by Ford government will prevent many of them from accessing higher education. (Valerie Ouellet/CBC)

The aim of the changes, according to the PC government, was to make the OSAP system more sustainable. The province's Auditor General projected the cost of Liberal-era student grants would balloon to $2 billion by the 2019-20 school year, up 50 per cent compared to 2016-17. 

The hitch though, according to Usher, is that when the government changed the rules, they didn't release an updated formula used to calculate OSAP that reflects the policy changes. 

"You need a formula," he said. "They were very reticent about releasing details, which may mean they don't know the details." 

How OSAP is calculated can be complex. How much financial aid a student gets is based on the school, program, start and end dates, tuition, book costs, a student's earnings and their family's income. 

"Unless that formula is enshrined in code, no-one can process your application," he said. "Because changes were made late in the process, that code still has not been released to institutions and I understand it isn't being released for another week or so." 

As a result of the changes made in January by the province, hundreds of thousands of Ontario students can't apply for loans even though they've been accepted by their institutions because those institutions still don't know what to tell them. 

'We're still waiting for the final details'

Officials at Fanshawe College say they have yet to tell students about their financial aid details because they have yet to receive final details from the government. (Dave Chidley/CBC)

"We're still waiting for the final details on the changes they've outlined for us," said Elaine Gamble, the senior manager of corporate communications at Fanshawe College. 

"That's why we haven't communicated with the students yet," she said. "We're just putting all this information together right now." 

Gamble said once the details are known, Fanshawe College plans on holding a series of information sessions targeted at students who receive financial aid before they leave for the school year. 

She said the college also plans on holding additional sessions this summer, as well as online to make sure students who receive aid understand what the changes mean to their bottom line. 

In terms of what those changes are, Alex Usher believes that students and families will be forced to take on more debt as the province tries to pare down Ontario's outsized amount of red ink.

"What is going to change is the amount of debt students get at the end," he said. "That's going to return to where it was four or five years ago."