OSAP’s New Financial Literacy Test: What is it really achieving?

With the new school year set to start again in September, Ontario’s post-secondary students are in for a surprise when applying for government grants and loans through Ontario Student Assistance Program (OSAP). This year, the usual OSAP application forms are accompanies by a mandatory financial literacy module. Our editor Faria Ahmed reviews some interesting aspects of OSAP’s new, mandatory, financial literacy test and what it potentially hopes to achieve.

A typical OSAP application

Students who attend post-secondary college or university in Ontario, and routinely apply for government student grants or loans, are familiar with OSAP. In a typical year, students sign up for their OSAP applications online, a few weeks or months ahead of the start of the school year. They are asked to fill out a brief form, with questions about their program of study, year of study, university name, percentage course load, household income, expected scholarships or bursaries. The application has always been easy and straightforward to fill out and submit. Once a student has filled out the initial form, they are able to see the estimated grants and loans that they may be eligible for, based on the information provided in the form. Over the following weeks, OSAP verifies income and enrollment information, and eventually the estimated (or final) amount of grants and loans that the student qualified for arrived in the student’s bank account.

mage: Ontario Student Assistance Program Photo Credit: Millennial Things Network
Image: Ontario Student Assistance Program Photo Credit: Millennial Things Network

Over the last few years, there have been a few changes to this process. OSAP uses more user-friendly inforgraphics to explain the difference between grants and loans to students, compared to earlier years. They also began to send the tuition portion of the assistance directly to the college or university where the student is registered. Only any excess amount of grants or loans approved beyond the tuition (such as those to support purchase of books, living costs, etc) is deposited into the student’s account.

OSAP’s new financial literacy module

However, starting this fall 2020, there is one more ‘improvement’ or modification in the OSAP application portal. Students applying for OSAP will have to complete an additional component of their application, and without completing this, they cannot proceed with submitting the application for Fall and Winter 2020-2021. This new segment comprises a mandatory financial literacy module, whereby students must read and understand the information provided, and then complete a list of multiple choice questions following it.

The module is meant to help young Ontarians entering the first major financial commitment of their lives by ensuring they have a full and thorough understanding of the process and its obligations. Among the information that students get to learn about, are the Prime and Fixed interest rates, interest-free period after graduating, and so on.

‘Investment’ in your future

At first glance, it appears as a decent attempt by the provincial government to aid in the financial literacy of young adults who are making the first big financial commitment of their lives, with student loans sometimes exceeding CAD 30,000 for a full Bachelor’s degree. However, a closer inspection of the nature of questions makes it appear as if ‘lack of financial literacy’ is being seen as the main barrier which often prevents students from being able to pay back their student loans on time. However, several articles published since this new OSAP module have reported that it shows the province has failed to identify some major and real barriers which exist beyond the lack of financial literacy (CFS).

Not all investments turn a profit

One questions in this financial literacy module is dedicated to explaining to students, how going to college is an ‘investment in your future’ and will help set you up. The section gives off the impression that, by choosing to go to university, and take on thousands of dollars of student loans, you are making a strong investment in yourself. However, the term investment always comes with the ‘risk’ of a profit or a loss, and this is not addressed by OSAP.

According to Statistics Canada, Canada has “the highest proportion of” post-secondary graduates compared to any of the Organisation for Economic Co-operation and Development (OECD) countries, such as Australia, Japan, Ireland, Israel, Germany among others. So, if going to university for any program would guarantee employment or entrepreneurial financial success, then it Canada have a higher employment compared to all other OECD countries. However, Canada’s pre-pandemic unemployment stood at 7%, compared to Japan (2.5%) and Germany (5%) (OECD Statistics, STATISTA). So, if attending university does not guarantee financial success, it is curious how is financial literacy alone can be expected to solve the problems of graduates defaulting on student loans.

Recently, companies like RBC and Workopolis have published lists of university programs which show higher financial success among graduates. Many of these lists include professional degree programs such as nursing, pharmacy, engineering, among a few others. If that is a true picture of post-secondary education in Canada, where some programs and degrees are much more likely to guarantee financial success than others, then such statistics and information could allow future students make more informed choices about ‘investing’ in their future.


  • Serial Entrepreneur, Healthcare professional, and Democratic Socialist at heart. Believes in the power of community, grass roots movements and awareness of socioeconomic changes as a means of bringing about positive change in the world.

Leave a Reply