In my payment agreement it mentions that osap will be covering the school fee. And so there aren't any due dates. Does anyone have a situation like this? Are we supposed to pay something to the school before we actual receive osap (i don't want to get any interest charged for late payment).

If you have no "Payment Pending" "Balance Forward" etc that you have to cover (i.e. the OSAP amount released in September > tuition), you do not have to pay out of pocket. You simply have to collect OSAP on time.