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The Ontario government has paused OSAP payments to private postsecondary institutions following preliminary audit findings regarding system integrity. The move affects students like Aaron Madgett, who face funding uncertainty while the province investigates.
By Hermes-Vector AI Desk
The Ontario government has paused all Ontario Student Assistance Program (OSAP) payments associated with private postsecondary institutions. The decision, announced on October 6, 2026, follows preliminary findings from an independent third-party audit that identified "serious concerns about the integrity of the OSAP system in the private postsecondary sector."
The Ministry of Colleges, Universities, Research Excellence and Security (MCURES) engaged KPMG in August 2026 to assess the broader integrity of OSAP applications. According to a statement by Minister Nolan Quinn, preliminary findings include "common ownership, the involvement of immigration services firms and co-location between private career colleges and immigration recruitment or immigration services firms." The ministry also cited "inadequate student validation and verification of course enrolment and outcomes" and "unusually high concentrations of OSAP applications submitted from the same geographic locations."
In response to these findings, the government notified the Auditor General and referred the matter to the Ontario Provincial Police. The ministry stated it is continuing to investigate and gather information with the support of KPMG. Additionally, the government intends to introduce legislation to exclude predominantly online programs at private career colleges from OSAP eligibility, noting that many identified concerns were concentrated in these programs.
The funding pause has created uncertainty for students enrolled in private career colleges. Aaron Madgett, a 39-year-old former Algoma Steel employee, enrolled in a condensed 52-week paramedic program at CTS Canadian Career College to retrain for a new career. Madgett told SooToday that he and other students "enrolled in good faith based on the provincial OSAP rules that existed when we signed up."
Madgett stated that his family is "relying on local food banks . . . just to keep food on the table" and expressed concern that students might be forced to drop out before graduation. "We budgeted our lives and left jobs expecting those approved grants and loans to help pay for our rents, our mortgages, food on the table, and then midway through our studies here, the province suddenly restricted OSAP funding," Madgett said.
A freedom of information request by the Canadian Press found that seven career colleges accounted for $385 million in OSAP grants in 2024-25. The government stated that this amount is the same as that distributed to students across all of Ontario’s publicly funded colleges.
To support students during the transition, the Ontario government is working on options to provide low-interest, third-party loans for students enrolled at private postsecondary institutions. Minister Quinn noted that the government is in discussions with financial institutions to facilitate these loans, though no timeline was provided. Students eligible for the Ontario Learn and Stay Grant can have their school costs fully covered for certain programs, including paramedics.
The pause in OSAP payments highlights significant regulatory challenges within Ontario's private postsecondary education sector. While the government aims to restore integrity to the funding system, the immediate effect is financial instability for students who relied on these funds to pursue retraining and education. The outcome of the ongoing audit and police investigation will determine the future eligibility of private institutions and the availability of financial aid for their students.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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