The Ontario Student Assistance Program (OSAP) has been overpaying students, and it wants the money back. According to a Toronto Star investigation released on April 1, the student loan program has handed out over $700 million in overpayments since 2009.
According to OSAP’s website, an overpayment is when a student has received more in loans than they are entitled to.
This can happen for two main reasons: either the student provided an inaccurate estimate of income when applying for OSAP, or the student reduced the number of classes taken during the school year, in turn reducing their tuition
The OSAP application process is notoriously complicated and asks students to guess how much they will make over the coming year, which can greatly vary depending on if students receive grants or scholarships, pick up extra shifts or take on another part-time job throughout the year.
Majid Atto, a second-year engineering student, said that he worked over the summer last year and disclosed that on his OSAP application. But after the summer ended, he was offered the opportunity to continue working part time throughout the school year.
“I made a good amount of money by working during school, however I didn’t know this was going to happen so I didn’t account for that money in my original application,” Atto said.
Atto was lucky. This was his first time receiving an OSAP overpayment.
The first time this happens, a student is given a warning — OSAP accepts it as a mistake .
The debt is added to the total the student will have to pay once out of school.
But students who have this happen the first time often aren’t even aware that they were overpaid. That’s why it is a shock to be hit with an overpayment notice on the second occasion.
According to the Ontario Ministry of Training, Colleges and Universities’ website, the second time that OSAP deems a student has been overpaid, students “must repay the second overpayment in order to be eligible for further student aid.”
There’s a process students can go through to have a second-time overpayment forgiven by OSAP, but it’s complicated and often never explained as an option to students.
“Students that do become overpaid can meet one-on-one with one of Ryerson’s financial advisers to determine if they meet the criteria to appeal the overpayment,” Charmaine Hack, the registrar at Ryerson University, said in an email to The Ryersonian.
“If eligible for appeal, the adviser will help the student submit the necessary documents to request a review by the ministry.”
But this process is often complicated for students.
Paisley Snow, a fourth-year social work student, voiced her frustration at this process.
“(OSAP) said they overpaid and that I had to pay it back, but obviously I had used the money for tuition, so I didn’t have it.”
Unable to repay the overpayment, Snow went to the financial services office at Ryerson. There, she was told that there would be a fee to process her complaint.
It ended up costing her $300 in fees to the school in order to even start the appeal process
OSAP determined Snow had been overpaid after her mom was injured at work and was placed on worker’s compensation.
“(My mom) wasn’t making any more, she was making less. But because she was getting (Workplace Safety and Insurance Board) payments, I guess that meant I couldn’t get OSAP.”
The situation was never fully explained to Snow in a way she understood by anybody at OSAP or Ryerson.
Snow said she never updated her OSAP information to indicate her mom was on worker’s compensation, assuming she would just have to update it for the new school year as normal.
In other cases, students who plan to take a full course load, but suddenly have to reduce the number of classes they’re taking, can be left with overpayments
Hack said this is just part of a larger problem with OSAP.
“The story (in the Toronto Star) sheds light on a systemic issue inherent in the application of the current rules for OSAP administration,” she said.
“Perhaps the story will prompt a more in-depth review of overpayment issues to better illuminate how student degree progression is impacted (by the system of dealing with overpayments).”