Ontario Universities: Rising Domestic Applications Provide Little Relief to Universities Facing Financial Challenges

On January 22, 2025, the Ontario Universities' Application Centre released its undergraduate application statistics. These figures include only Ontario secondary school students (domestic students) and exclude all other applicants (AOAs; largely out-of-province students, mature students, transfer students, and international students).

The increase in the total number of applications aligns with a rise in the overall number of applicants, pointing to a favorable outlook for domestic enrolments for the upcoming 2025-26 academic year. As of January 2025, total applications rose by 4.5% compared with 5.0% growth in the prior year, while the total number of applicants was up by 5.2% or ~5,000 individuals, the highest increase over the past decade. While the data for AOAs is not available until April, international enrolment growth is expected to remain muted given the currently restrictive federal policy stance.

Key Highlights
-- Total applications rose by 4.5%, compared with 5.0% growth in the prior year, while the total number of applicants saw its highest increase over the past decade at 5.2%.
-- Universities with stronger academic profiles experienced substantial gains.
-- Competition to convert these applications to enrolments will likely remain intense, but not to the degree observed during the pandemic when some institutions significantly increased domestic intake.
-- Rising domestic enrolment will not alleviate the persistent financial challenges Ontario universities face given limited revenue flexibility and ongoing inflationary cost pressures.

"While some of the academically stronger universities may have some flexibility to withstand a prolonged period of operating challenges, some of the smaller universities are incurring larger deficits, leading to eroding interest coverage and a drawdown of reserves," says Apurva Khandeparker, Assistant Vice President, Public Finance. "Absent any improvement on the revenue outlook, these conditions could lead to negative implications for academic quality, resulting in negative credit rating actions for some universities."