Ontario to defer student loan payments until end of September due to pandemic

A piggy bank is seen in this undated file photo.

TORONTO — Ontario will be deferring student loan payments and holding interest until the end of September.

The Progressive Conservative government said that students will not have to make Ontario Student Assistance Plan (OSAP) payments for a six-month period between March 30 and September 30 as the province recovers from the COVID-19 pandemic. Interest will also no longer be accrued on top of their loan throughout this time period.

The deferral is accessible to “borrowers in good standing.”

The Minister of College and Universities said in a statement issued Wednesday that the decision was made “to remove financial barriers to postsecondary education” in this “unprecedented period.”

"Investing in higher education is one of the most important investments a person can make in their future," Ross Romano said.

The announcement was made as applications for the 2020-21 school year opened. Students who wish to apply for a loan will also be required to complete an “information module” that will ensure they understand how OSAP works and can demonstrate financial literacy.

Last year the Ontario government, under the leadership of Premier Doug Ford, made several changes to the cost of post-secondary education, including a 10 per cent reduction in tuition fees and allowing students to opt-out of certain student expenses. They also made changes to OSAP, effectively eliminating a six-month grace period following a student’s graduation in which interest was not charged and reducing the annual income threshold in which students have to begin repaying OSAP from $35,000 to $25,000.