A new poll from the Ontario Real Estate Association (OREA) reiterates how student debt is a significant barrier to homeownership. The Impact of Student Loan Debt on Homeownership report shows that over half of post-secondary students owe money and graduates with debt greater than $5,000 are finding it harder to save up for a home.

Some Ontarians must look for options in more affordable provinces, with 42 per cent of graduates considering leaving the province for a lower cost of living and more attainable housing. Other life milestones being delayed as a result of student debt include moving out of the family home, getting married, and starting a family.

“Student debt is not merely a financial burden; it’s the biggest barrier to the Canadian dream of homeownership for many young Ontarians and their families,” said OREA CEO Tim Hudak. “Our research shows that the weight of student loans contributes greatly to the housing affordability crisis which, if left unaddressed, will lead to fewer young Ontario homeowners. All levels of government and industry need to work together to bring affordability home to Ontario graduates.”

Due to high housing costs, almost half of the graduates’ parents surveyed plan to stay in their family home for the next decade, rather than downsizing. This will prevent more housing supply from entering the market.

The majority post-secondary graduates polled (75 per cent) still have their hearts set on homeownership. At least 80 per cent of grads support various government interventions that address housing affordability.

OREA has proposed several recommendations to help address the housing affordability crisis that young Ontario graduates are facing:

1. The provincial and federal government should collaborate to allow graduates to alleviate a portion of their OSAP loan when they add funds into Canada’s ‘First Home Savings Account’ (FHSA). The government should match the addition of funds dollar-for-dollar. For example, if a graduate adds $5,000 into the FHSA, the government will reduce the students’ OSAP loan by $5,000.
2. Ontario should permanently eliminate the accumulation of interest on all provincial student loans including loans currently being repaid, which is already in effect for interest on federal student loans. This policy aligns with the announcement on April 1st, 2023, from the Government of Canada, which permanently eliminated the accumulation of interest on all federal student loans including loans currently being repaid.
3. Ontario should increase the grace period for OSAP loan repayment from 6 months to 1 year, allowing students an additional 6 months to obtain stable employment and save money before making payments. All Ontario students have a period of 6 months after graduating or leaving full-time studies before they are required to begin paying back their loan.
4. Ontario should enable automatic notification to OSAP when graduates file their taxes and receive their OSAP tax receipt. Following the notification, eligible graduates should automatically be entered into Canada’s ‘Repayment Assistance Plan’ (RAP), removing the burden on graduates to re-apply every 6 months.
5. Ontario should partner with the National Student Loan Service Centre to create an online financial education hub that outlines all necessary information related to student loans. This should include information from each post-secondary institution. This would ensure that students/graduates do not miss important information about repayment and default processes, loan reduction options, etc.

“Student debt casts a shadow over this dream, leaving aspiring buyers caught between their educational ambitions and the desire for a place to call their own,” added OREA President Tania Artenosi. “We need to work to empower the next generation of homeowners, and that starts with pro-homeownership policies aimed at alleviating the pressures of student loan debt.”