The reasons for the Department of Immigration and Citizenship (DIAC) rejecting a visa application are many and varied. Having your visa to study in Australia rejected can be very distressing, but your OSHC is one thing you do not have to worry about.

In order to get your student visa to study in Australia, you will first need to purchase OSHC. Having an OSHC policy covering the entire period of your student visa is a pre-requisite for getting the student visa itself.
If your visa to study in Australia is rejected, you will get a full refund of your OSHC.  In order to get your full refund, you will need to fill out a refund form, available from your insurer, and provide it to them in addition to your rejection letter from DIAC.

So in the event that your visa to study in Australia is rejected, there is one thing you do not need to worry about.  You will get a full refund of your OSHC.