The Debt Reduction Grant Program
The Province of Prince Edward Island is dedicated to assisting students to further their post-secondary education. The Debt Reduction Grant program provides graduates with assistance with their student loan repayment and encourages students to live and work in our island communities after graduating from a post-secondary institution.
Who is eligible for a Debt Reduction Grant?
- Individuals who have borrowed from the PEI Student Loan Program; and
- Individuals who have graduated from a post-secondary institution in the last 3 years, earning a degree, a diploma, or a certificate; and
- Individuals who are a PEI resident* and have been living on PEI for a minimum of 6 months prior to their application date. (Please note for recent graduates, this would be a minimum of 6 months AFTER their graduation date).
* As per subsection 31(5) of the Student Financial Assistance Act General Regulations, an applicant is considered a resident of the province if the applicant resides and maintains their principal residence in the province and has done so for at least six months immediately preceding the application for a debt reduction grant.
How much is a Debt Reduction Grant?
The Debt Reduction Grant is calculated based on the money an individual borrows each year from the PEI Student Loan Program. Generally, PEI student have two funding sources, the Canada Student Loan (CSL), which is federal funding administered by the National Student Loan Centre and the Provincial Student Loan (PSL), which is provincial funding administered by Edulinx. The Debt Reduction Grant is only applied to an applicant’s PSL, the provincially funded part of your PEI Student loan.
Prior to Aug. 1, 2018 - $2,000 per year
As of Aug. 1, 2018 - $3,500 per year
The Debt Reduction Grant Worksheet (Excel spreadsheet) provides helpful examples of how the grant is calculated and the worksheet may be used to estimate an applicant’s debt reduction grant.
(For information on CSL repayment assistance, please visit: https://www.canada.ca/en/services/benefits/education/student-aid/grants-loans/repay/assistance.html)
What other criteria must be met?
To be eligible:
- The total amount borrowed each year must be more than $6,000 when the federal and provincial funding are added together (CSL + PSL > $6,000).
- The total amount of PSL must be more than $100.
Are there any limitations?
- There is a cap on the number of years to be considered for a Debt Reduction Grant. All post-secondary education programs have a standard length of time for completion. On average, a degree is a 4-year program, a diploma is a 2-year program, and a certificate is a 1-year program. Debt Reduction Grants only cover a degree/diploma/certificate’s standard length of time plus 1 year.
(For example, if it took six years to complete a four-year program, then the Debt Reduction Grant would only be considered for the first five years of the program [4 years +1 year = 5 years]. No grants would be awarded for the 6th year.)
- The Debt Reduction Grant awarded cannot exceed the amount borrowed.
(For example, if a student borrowed $1,500 in provincially funded student loan in 2020, then the maximum amount of debt reduction grant awarded would be $1,500, instead of $3,500.)
When can I apply for a Debt Reduction Grant?
Debt Reduction Grants are awarded four times per year: spring, summer, fall, and winter.
Upon graduating from a post-secondary program, an applicant must meet the PEI residency requirement.
- If a graduate is living on PEI prior to their graduation date, then they are required to complete the 6-month residency requirement after their graduation date before they apply;
- If a graduate does not live on PEI prior to their graduation date but moves to PEI in the future, then they are required to fulfill the 6-month residency requirement before they apply.
All graduates must apply within the 3-year period following their graduation date.
How do I apply?
Complete the Debt Reduction Grant Application Form .
Obtain a copy of your degree, diploma, certificate, or unofficial transcript.
Provide two forms of verifications for proof of PEI residency. All verifications should be dated within the previous 6 months prior to submitting your application to our office.
Proof of residency is satisfied by providing any two of the following documents:
- Letter from PEI employer which includes your start date (recommended);
- Pay stubs (recommended):
- one pay stub with year-to-date totals, or
- All pay stubs within a 6 consecutive month period;
- Lease/rental agreement or rent receipts;
- Credit Card statements (6 statements for 6 consecutive months);
- Utility bills:
- one electricity bill,
- two water/sewer bills,
- cable bills (6 statements for 6 consecutive months)
- telephone bills (6 statements for 6 consecutive months);
- PEI motor vehicle registration card (not the plate registration);
- House purchase agreement/title deed;
- Property tax assessment;
- Documentation confirming community involvement activities for a 6 month period.
How is the Debt Reduction Grant awarded?
Debt Reduction Grants will be paid directly to Edulinx and applied against your PSL balance. If your balance is less than the amount granted, Edulinx will refund you the difference.
Student Financial Assistance Services
Department of Education & Lifelong Learning
PO Box 2000
176 Great George St, Suite 212
Telephone: (902) 368 4604