Can I Get OSAP While in a Consumer Proposal?

Applying for the Ontario Student Assistance Program (OSAP) while in a consumer proposal can feel like a daunting task. Yet, it’s a question that often comes up for those who are navigating their financial situations while also aiming to continue their education. This article offers a thorough exploration of this topic, shedding light on the possibilities and outlining the necessary steps one should take.

Understanding the Basics

Firstly, it’s important to understand what we’re dealing with. A consumer proposal is a legally binding process administered by a Licensed Insolvency Trustee (LIT) that allows you to negotiate a plan to pay off part of your debts over time, which stops interest from accumulating on your debts during that period.

OSAP, on the other hand, stands for Ontario Student Assistance Program. It’s a financial aid program that assists Ontario students to meet the costs of post-secondary education.

The question here is, “Can I get OSAP while in a consumer proposal?” The short answer is yes, but it’s a bit more complicated than that. Let’s delve into the details.

The OSAP Application Process

Applying for OSAP funding post-insolvency does not necessarily stop you, but you will need to provide additional details during the application review process. Your application will be considered incomplete if you do not provide this information. All conditions must be met for your application to be considered.

Disclosing Your Insolvency Status

In the application, there is a specific section where you are asked whether you have ever filed for bankruptcy or initiated a related event. A related event includes any proceeding filed under the Bankruptcy and Insolvency Act, including a consumer proposal or personal bankruptcy. You must disclose if you are an undischarged bankrupt and the date you filed.

If you have filed a consumer proposal, you need to disclose if the consumer proposal is still active and the date you filed. The consumer proposal is still active until you complete the proposal and obtain your certificate of full performance.

Canada Student Financial Assistance Act

According to the Canada Student Financial Assistance Act, if a borrower has a government-guaranteed student loan and files a bankruptcy or proposal, they are not eligible to receive a new student loan until three years after their discharge from bankruptcy.

Your Discharge Status Matters

The stage of your insolvency process plays a significant role in the documentation and conditions you must meet. If you have not yet been discharged from bankruptcy (or completed your proposal), you must provide:

  1. A letter from your trustee, confirming the date of filing.
  2. A statement indicating that the government was not a creditor for government-guaranteed student debt and that any funds provided by OSAP will not be seized to repay creditors listed in your bankruptcy or proposal.

If you have completed your proceedings and received your discharge or certificate of completion, you must provide:

  1. A copy of your certificate of discharge or certificate of full performance (consumer proposal).
  2. If your student debt was discharged as part of your bankruptcy or proposal under Section 178 (1) of the Bankruptcy and Insolvency Act, you must provide proof of when you were discharged and that three years have elapsed since the date of your discharge.

Navigating the Process

All these rules and regulations might seem intimidating, but they are designed to ensure fairness and maintain the integrity of the financial assistance program. If you are currently in a proposal or bankruptcy, you must show that you don’t have current student debt included in your bankruptcy or proposal and that your trustee won’t count new loans as income for the benefit of your creditors.

An Example Scenario

Consider this example: a student has filed a consumer proposal and now wishes to return to school. They can apply for OSAP, but they must provide the necessary documentation and meet the conditions mentioned above. If they can demonstrate that they don’t have current student debt included in their proposal and that their trustee won’t count new loans as income for the benefit of their creditors, they may be eligible for OSAP.

The Importance of Honesty

It’s critical to be honest and provide all the required information when applying for OSAP. Failure to provide accurate information can result in penalties, including being barred from receiving OSAP in the future.

Seeking Expert Advice

If you are considering returning to school and have not yet filed a consumer proposal, it’s advisable to speak to a licensed insolvency trustee about your situation. They can guide you through the process and help you weigh your options.


So, can you get OSAP while in a consumer proposal? Yes, but it requires careful navigation and adherence to the rules and regulations. If you find yourself in this situation, don’t hesitate to seek professional advice to guide you through the process.

Remember, the ultimate goal is to improve your financial situation and secure your future. Pursuing education can be a significant step towards that, and financial constraints should not hinder your progress. Understand the rules, prepare accordingly, and take one step at a time towards your goal. And remember, you’re not alone in this journey. Help is always available.

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