Ontario has referred the issue of student financial assistance payments at private career colleges to the provincial police after preliminary audit findings identified “serious concerns,” the government said Tuesday.

Colleges and Universities Minister Nolan Quinn said in a statement that the ministry launched targeted inspections of career colleges last year in response to growing concerns about Ontario Student Assistance Program (OSAP) usage and in August had KPMG begin an audit.

“While that work is ongoing, preliminary findings have identified serious concerns about the integrity of the OSAP system in the private post-secondary sector,” he wrote.

“These include common ownership, the involvement of immigration services firms and co-location between private career colleges and immigration recruitment or immigration services firms, inadequate student validation and verification of course enrolment and outcomes, and unusually high concentrations of OSAP applications submitted from the same geographic locations.”

The government notified the auditor general last week and has also referred the matter to the Ontario Provincial Police, Minister Nolan Quinn says. (Paula Duhatschek/CBC)

As a result, the government notified the auditor general last week and has also referred the matter to the Ontario Provincial Police, Quinn wrote.

The Canadian Press has reported that the total of provincial grants sent to students at just seven career colleges in 2024-25 was about $385 million, the same amount that went to students at all of Ontario’s publicly funded colleges.

Career colleges group warned of suspicious OSAP activity

Court records show that Career Colleges Ontario, an association representing the sector and the body that processes their students’ OSAP applications, has been warning the province about possible “suspicious” OSAP activity for years, dating back to January 2023.

At the same time, the government has paused all OSAP payments for career college students while the audit is ongoing.

It has thrown the entire sector into uncertainty.

The ministry often approves which schools can accept OSAP funding over the summer, but news of the pause Tuesday came as the academic year is already well underway.

Career Colleges Ontario said the approval delays are causing significant disruption for schools, which have to make operational decisions without clear information or timelines, and for students who don’t know if they can afford to start — or remain in — classes.

“We hope the government will introduce a policy that promptly addresses improper conduct and targets those who have acted wrongly,” the association wrote in a statement.

WATCH | How the new OSAP changes impact students:

OSAP changes are in effect. Here’s how students are being impacted

Changes to OSAP are now in effect, cutting the amount of provincial grants students will be eligible to receive. Students across the province are getting their estimates for the school year. CBC’s Mercedes Gaztambide spoke to some students who are facing tuition sticker shock.

“Career Colleges Ontario was instrumental in bringing these concerns forward to the government in the first place, and it is not fair that students across the sector who have done nothing wrong are now being impacted as a result.”

Delays affect students in a variety of programs

The sector-wide delays are affecting not just schools that Career Colleges Ontario raised concerns about, but also schools such as Mothercraft, which has been offering early childhood education programs for decades and has a “stellar” compliance record, said executive director Michele Lupa.

“We’re still waiting to hear if we continue to be an eligible institution for OSAP,” Lupa said in an interview.

“So, needless to say, that’s a little concerning. We’re six weeks into the academic year, and we have students who are relying on OSAP to be able to carry out their studies. So they’re getting anxious, needless to say, and we are too.”

Mothercraft graduates about 125 new ECEs every year, and those graduates are especially critical at a time when the child-care sector is trying to expand under the national affordable child-care program, Lupa said.

Also in high demand at the moment are dental hygienists, and first-semester student Daliah Gardoque’s program at the Toronto College of Dental Hygiene and Auxiliaries is in OSAP limbo, too.

“It’s extremely stressful,” said Gardoque, who started an online petition asking the ministry to “urgently address the ongoing uncertainty.”

“I’m privileged enough to have a decent amount of savings, but that’s only to keep me afloat until the end of first semester. So after that, I wouldn’t really know what I’m going to do. But a lot of people are right now not focused on their exams just because they’re thinking like, ‘Is there any point?’ Because if OSAP doesn’t come in the next month, they might as well drop out.”

‘The government knew in 2023’: Liberal leader

Speaking at a news conference Tuesday afternoon, Quinn told reporters he “wholly” recognizes the impact a pause on OSAP funding has.

“This is not a decision we made lightly, but it is necessary in order to support the integrity of the OSAP system,” he said, adding the provincial government is working on providing low-interest, third-party student loans and will provide more information once available.

“As for the institutions, I recognize this pause will likely have an impact on enrollment and therefore on the financial viability of certain institutions,” Quinn said, noting private institutions will need to reapply for OSAP eligibility with the ministry under stricter parameters.

“Any misuse of OSAP is entirely unacceptable. It is an affront to students, to taxpayers and to the integrity of our world class post-secondary system.”

Ontario Liberal Party interim leader John Fraser told reporters Tuesday he’s surprised Quinn didn’t resign today.

“Only in the [Doug] Ford government can you have a billion dollars that you can’t answer for, waste hundreds of millions of dollars, put that on students and their families and still keep your job,” he said. “The government knew in 2023. It’s 2026.”

NDP Member of Provincial Parliament for University—Rosedale Jessica Bell says the Ford government has ignored the problem for too long.

“It’s hard to take seriously any solutions this government proposes because they are the ones that created the problem in the first place,” she told reporters Tuesday. “Students have to go to university and college to get ahead right now and it’s very hard to do.”