Changes in student aid unveiled in the Ontario budget are the most radical shift in decades in how the province delivers loans and grants to college and university students, and show the government wants to get more low-income people into postsecondary education.

The government said in the budget on Thursday that most college students whose family income is less than $50,000 a year will receive grants large enough to cover their whole tuition. Grants for university students, who pay higher tuition, may not offset the entire amount.

"I think this is a game changer for students – it really changes the economics of going to postsecondary education," said David Agnew, the president of Seneca College and chair of Colleges Ontario.

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Because of the difference in tuition costs, low-income college students will benefit most, Mr. Agnew pointed out. "There is a clear commitment to college education," he added in a statement.

Every postsecondary group hailed the changes, from university administration and faculty associations to student groups.

"This is something that students were directly calling for," said Rajean Hoilett, chair of the Canadian Federation of Students' Ontario executive committee. "It shows that government has been listening to students who are sounding the alarm on affordability and access to education."

The changes roll multiple loan and grant programs into one, the new Ontario Student Grant. Finance Minister Charles Sousa said the cost of the grant will be "roughly the same" as the current level of $1.3-billion in aid.

"When I became minister two years ago – and I have four university degrees – I found it very difficult to navigate the system," said Reza Moridi, Minister of Training, Colleges and Universities. "We wanted to simplify it and modernize the system so that students and parents can understand it."

The government will release details of the program in months to come. It is not clear exactly how much some students' situations will change. A student attending Ryerson University for a four-year BA in English and living at home with parents earning $50,000 a year under the current system would receive a mix of grants, loans and tax credits, leaving them with a debt of about $2,400 for that year. That number may not be much lower in the new system, because the tuition would be higher than that of a college.

Starting in 2017, students will be able to borrow up to $2,500 more a year.

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Low-income college students living at home would have only about $500 in loans a year, largely due to the much-lower tuition.

The province has said it wants to increase the percentage of Ontarians from lower-income and disadvantaged groups who attend college and university.

"Statistics show that for students coming from low-income families, participation is almost half of high-income families," Dr. Moridi said. Modernizing and simplifying the system will make it easier for these students to see that postsecondary education can be accessible, he added.

Student groups have long argued aid should be easy to use and understand.

Ontario lags most provinces in the percentage of people who are the first in their family to go to postsecondary school.

"Now, the perception of affordability of postsecondary education should improve," said Spencer Nestico-Semianiw, the president of the Ontario Undergraduate Student Alliance (OUSA). Many of the new measures were proposed in OUSA's budget submission and in fact appear to go further in some areas – such as eliminating tuition for some students.

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The jubilation could be short-lived if tuition costs rise quickly, however. The current 3-per-cent cap on increases to undergraduate tuition expires in 2017, the year the new financial-aid system begins.

Thursday's changes to aid are not linked to tuition levels, a government official said.

"Our funding arrangements are up for review next year and it is something we will look at then," said David Lindsay, the president of the Council of Ontario Universities.

Financially, no student will be worse off under the new system than they are now, the government has promised. Half of families in Ontario earn less than $84,000 a year, and while grants will increase marginally for those close to that line, they will be able to access more loans.

Higher-income families will be expected to contribute less to their kids' education than they do now. A family of four earning $110,000 will see their expected contribution decrease by $6,000 to $4,000 a year. Loans will make up for part of that drop.

Aid for students should be accompanied by improvements to the quality of education, said Judy Bates, the president of the Ontario Confederation of University Faculty Associations.

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"We are delighted to see that government is going to invest more for student access, our issue is what their experience will be once they get to university," Dr. Bates said. "The projected growth in university funding will not keep pace with inflation, so our universities will be starved even more than they have in the past. Full-time faculty members, writing centres, all those things will be impacted."

If the measures increase attendance rates for low-income and other disadvantaged groups such as aboriginal students, they will also help address demographic pressures. With the population of 18- to 24-year-olds declining, colleges and universities fear enrolments and their budgets will shrink.

This budget for the first time opens financial aid to mature students regardless of how long they have been out of school and decreases the spousal contribution, further increasing the pool of students who might consider attending postsecondary.

All of the province's projections are based on the implementation of federal promises on student aid. The Liberals have already said they will move away from tax credits, including cancelling the education and textbook tax credit, and putting the funds toward an improved Canada Student Loan program.