Postsecondary institutions have an important role to play in reducing loan defaults. Some measures schools have implemented include:
- improving program quality and relevance
- ensuring adequate testing and admissions practices
- informing students of loan repayment and repayment assistance supports
- providing support to students to complete their studies
- assisting with job searches
In addition, OSAP approved private institutions in Ontario must achieve:
- Both an overall graduation rate and an overall graduate employment rate of at least 80% of the overall average rate for Ontario Public Colleges in at least one of every three years.
- An overall default rate that is at or below the default rate threshold in at least one of every four years. The first year of default rates included in this standard are the 2016 default rates of 2013-14 borrowers.Sharing the cost of loan defaults
A private institution is responsible for sharing the costs of loan default if their default rate is above the default rate is above the default rate threshold.
Any institution with a 2020 default rate above the 20% threshold is required to post a Promissory Note for loans issued in 2021-22. The 2020 default rate pertains to loans issued in the 2017-18 OSAP academic year.
Any institution that posted a Promissory Note for loans issued in 2017-18 and has a 2020 loan default rate above the 20% threshold is in a payment position. The institution is responsible for the Ontario portion of the loan default costs above the threshold.