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ODSP and school: how OSAP funding is treated
The worry is usually the same one: that taking OSAP will cost you your income support. Here is what the ODSP directive actually says about it, including the one part that is treated differently.
The published rule
OSAP loans, grants, bursaries and awards for direct educational expenses are exempt as income and assets, for as long as the person stays in the program of study or training the funding is intended for.
The public ODSP page states plainly that OSAP should not affect your income support from ODSP. Working and earning money on ODSP →
What direct educational expenses covers
Direct educational expenses means tuition, other compulsory fees, books, instructional supplies, transportation, childcare, and disability-related educational services and equipment.
Part-time study, micro-credentials, and earnings
Funding for part-time study is exempt, and where micro-credential funding is received on top of funding for a regular full-time or part-time program, the micro-credential portion is exempt.
For a full-time postsecondary student, all earnings are exempt, including in the four months preceding attendance.
The one part that is not exempt
The exception is a personal living allowance, which a small number of students receive. If a recipient accepts personal living funding it is treated as income and deducted dollar-for-dollar from income support, pro-rated over the study period.
The 2026-27 OSAP change, and what it does not change
What changed
Changes to the provincial portion of OSAP announced on February 12, 2026 come into effect for programs that start on or after August 1, 2026. Students will receive more of their provincial OSAP funding as loans rather than grants, and students enrolled in career colleges will receive all of their provincial funding as loans.
What did not
That change is to the mix of grants and loans, which means more debt for many students. It is not a change to how ODSP treats the money: no change to the ODSP-side treatment rules was located, and the directive above still exempts OSAP funding for direct educational costs.
Earnings during a study period are still reported on the usual monthly cycle. The reporting date, and how the calculation works →
Common Questions
Does OSAP affect ODSP income support?
The public ODSP page states plainly that OSAP should not affect your income support from ODSP. The directive behind that says OSAP loans, grants, bursaries and awards for direct educational expenses are exempt as income and assets, for as long as the person stays in the program of study or training the funding is intended for.
What counts as a direct educational expense?
Tuition, other compulsory fees, books, instructional supplies, transportation, childcare, and disability-related educational services and equipment.
Is any part of OSAP not exempt?
Yes, one part. A personal living allowance, which a small number of students receive, is the exception. If a recipient accepts personal living funding it is treated as income and deducted dollar-for-dollar from income support, pro-rated over the study period.
What about money I earn while I am a student?
For a full-time postsecondary student, all earnings are exempt, including in the four months preceding attendance.
Did the 2026-27 OSAP changes change how ODSP treats OSAP?
No change to the ODSP-side treatment rules was located. Changes to the provincial portion of OSAP announced on February 12, 2026 come into effect for programs that start on or after August 1, 2026, and they shift more provincial funding from grants to loans, which means more debt for many students. That is a change to the mix, not to the ODSP directive that exempts OSAP funding for direct educational costs.
More on ODSP
Official sources
- ODSP policy directive 5.11: Post-secondary education →The directive that sets how OSAP funding is treated as income and assets.
- Learn about OSAP (Ontario) →The public page that announced the 2026-27 grant-to-loan shift.
- Working and earning money on ODSP (Ontario) →The public page that sets the monthly reporting date and the earnings exemptions.
Last updated: August 2026
This page explains a published process and the deadlines in it. It is not advice about anyone’s eligibility, and it cannot tell you what will happen with your own file. For that, contact your ODSP office or a community legal clinic. Guidepost is not a law firm. This is general information, not legal advice. Full disclaimer.