OSAP Changes for Ontario Students: What to Know for 2026

What OSAP changes are coming in 2026?

OSAP provides a combination of grants (money you don't have to repay) and loans (money you do have to repay) to help students cover tuition, school fees, textbooks, and other education expenses.

The amount of OSAP funding a student receives depends on their education costs, course load (full-time or part-time), and personal financial situation (income, family size, and other factors). Using a Registered Education Savings Plan (RESP) does not affect how much OSAP you'll get.

Previously, students could receive up to 85% of their financial assistance package as grants. But starting this fall, grants are capped at 25%, meaning students receiving OSAP will have to take at least 75% of it in loans. 

For students attending private career colleges, 100% of OSAP funds will be loans, a change the Ontario government says is “in alignment with changes made by the federal government to its own student support funding.”

Ontario has also created a new long-term funding model to help post-secondary schools deliver “programs that align with student and labour-market demand supported by increased, predictable funding.” 

It will inject $6.4 billion over four years, increasing annual operating funding by 30%, for a total of $7 billion.

If you've already applied for OSAP, you're probably aware that you're receiving a smaller grant than you might have in previous years, or no grant at all. 

This makes it extra important to have a realistic picture of how much school will cost, budget carefully, and get every tax break and government benefit you're eligible for.

The hidden costs of education

In addition to tuition fees, students are on the hook for mandatory ancillary fees, technology fees, lab fees, exam fees, and administrative charges that can add up to hundreds of dollars each year. 

Then there are course materials—textbooks, kits, required software—plus everyday costs like your phone plan, transit fares, and housing and food, if you aren't living at home.

Can you opt out of certain student fees?

You can likely opt out of health and dental plans bundled into student fees if you already have equivalent coverage through a parent's plan, for example. Schools have a short opt-out window, so don't miss the deadline. 

Some student association or ancillary fees may also be optional, depending on the university or college. It doesn't hurt to ask.

Where to look if OSAP doesn't cover everything

With a smaller share of OSAP arriving as grants, students can also look into institutional bursaries and grants and external scholarships. 

Eligible low-income students can benefit from Ontario's enhanced Student Access Guarantee (SAG), a bursary meant to help cover gaps between OSAP and direct program costs (tuition, books, and mandatory fees). To be considered for a SAG bursary, you must first apply for OSAP. If you receive SAG, you don't need to repay it.

If you're still short on funding, you may need to apply for a student line of credit or a personal loan at a bank. Compare the loan terms and interest rates carefully before you borrow money, and make a financial plan to repay the loan.

Budgeting for the school year

Once you've factored in the real costs of school, it's worth creating a budget so you know where every dollar of your OSAP funds and job income will go. (Read more affordability tips.)

With OSAP grants covering less of the total cost of school, more students are leaning on summer and part-time jobs to bridge the gap. Even if that income is modest, filing a tax return is important, as this is the only way to access certain refundable credits and benefits. 

Hang on to tax slips and receipts so you have them at the ready when it's time to file. 

What is the tuition tax credit?

The federal tuition tax credit is one of the most valuable perks available to students. If you're aged 16 or older and attend an eligible post-secondary institution, you can claim eligible tuition fees as a non-refundable federal tax credit. 

(“Non-refundable” means it can help reduce your income tax to $0, but you won't get a refund for any remaining credit.)

For the 2026 tax year, that credit is calculated at a 14% rate—down from 14.5% in 2025—applied to your total eligible tuition.

Most students don't owe much tax to begin with, so this is where the real benefit of the tuition tax credit kicks in: any unused tuition amount can be carried forward indefinitely for a future year. 

Or, once your own tax is reduced to zero, up to $5,000 of the remaining amount can be transferred to a parent, grandparent, spouse, or common-law partner to use on their own return (but it must be in the same year).

When you file your tax return, transfer the tuition figure shown on your T2202 tax form to line 32300 on Schedule 11, the tax form used to claim tuition and education credits. 

Make sure your student status is noted in the personal information portion of your return, and use the numbers from your T2202 form (or equivalent tuition certificate) to complete the rest of that schedule.

If you have amounts left over after that, you can carry them forward by filling out the remainder of Schedule 11.

How are scholarships and bursaries taxed?

Scholarships, bursaries, and other academic awards are considered income, and you'll receive a T4A slip for them. 

The taxable amount of these awards could be reduced if you're a qualifying student who's eligible for the scholarship exemption—the portion of eligible scholarships, bursaries, and other awards you don't have to include in your income.

A qualifying student is someone enrolled in a qualifying educational program at a designated educational institution during the period the award was intended to support. Qualifying students can be enrolled full-time or part-time. 

If you're a student with a disability who has qualified for the Disability Tax Credit or you meet the impairment certification conditions in Canada Revenue Agency (CRA) guidance, you may be treated as a full-time student even if you're enrolled part-time (meaning your award is likely to be tax exempt).

• If you're a full‑time qualifying student and the award is intended to support your enrolment in a post‑secondary program, it could be fully tax exempt.
• If you're a part-time qualifying student and you received an award related to your part-time program in the taxation year, the preceding tax year, or the following tax year, your scholarship exemption will be limited to tuition and program-related costs. The CRA has a scholarship exemption calculation chart to help you determine how much to report.
• If you're not a qualifying student, enter only the part of the awards you received in the year that are more than $500 on line 13010 on your tax return.

Keep your tuition slips and T2202 forms

The T2202, or Tuition and Enrolment Certificate, is the form your school issues showing eligible tuition paid and months of enrolment. This is the document that supports your tuition tax credit claim. 

Schools should post it to their student portal by late February. You don't need to submit your T2202 with your tax return, but keep it in your files in case the CRA asks for it later.

If you attend school outside of Canada, you'll receive a TL11A, TL11C, or TL11D form instead. Your school should issue your form by the end of February, but you may have to request it.