A loan is money that you borrow. It is a type of debt. In OSAP’s case, you are borrowing the money from the governments of Canada and/or Ontario and they secure the debt on your behalf (otherwise you would usually have to secure the loan by pledging your assets). You must pay back the loan plus any interest on the debt.
In the case of student loans the interest accrued while you are in school is paid by the federal and provincial governments. For anyone who completes their studies on or after August 1, 2010 the Province of Ontario will pay the interest on your Ontario student loans during the six month grace period immediately following the end of your studies. Once the grace period ends, students are responsible for paying the interest on both their Ontario and Canada student loans. You agree to the terms and conditions of the loan when you sign your Loan Agreement with OSAP.