How OSAP and provincial student loans work
OSAP (Ontario Student Assistance Program) is one of the largest provincial student aid programs, combining Canada Student Loans and Ontario Student Loans. Other provinces have equivalents (StudentAidBC, AlbertaWorks, AFE in Quebec). Since April 2023, the federal Canada Student Loan portion charges 0% interest, permanently. The provincial Ontario portion still charges prime + 1%. Repayment starts 6 months after you leave school. The Repayment Assistance Plan (RAP) caps payments based on income; under roughly $40,000 a year, you pay $0.
Graduate with $30,000 of OSAP debt, split $20,000 federal (0%) and $10,000 Ontario (prime + 1%, currently around 7.45%). Standard 10-year amortization is roughly $315 a month on the combined balance. If you earn under $40,000 in a year, RAP drops your required payment to $0 and the government covers any accrued interest on the federal portion. There is no benefit to paying down the 0% federal portion early; clear the 7.45% Ontario portion first.
Putting all extra payments against your OSAP balance proportionally. The federal half is 0% interest forever. Throw every spare dollar at the provincial half and let the federal portion sit at the minimum payment.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.