The Debt Reduction Grant Program
The Province of Prince Edward Island is dedicated to reducing financial barriers faced by Island students who go to post-secondary education. The Debt Reduction Grant program assists post-secondary graduates with their provincial student loan repayment and encourages graduates to live and work in our island communities after graduation.
Who is eligible for a Debt Reduction Grant?
- Post-Secondary graduates who have borrowed from the PEI Student Loan Program; and
- Post-Secondary graduates who have earned a degree, a diploma, or a certificate within the last 3 years; and
- Post-Secondary graduates who are a PEI resident* and are one of the following:
- Beginning on their most recent post-secondary graduation date, graduates who have been living on PEI for a minimum of 6 months after their graduation date. For example, if a student graduates on May 7, 2023, then the earliest they can apply for a grant is November 8, 2023. (Please note, applications received within 6 months of graduation will be returned to the applicant.) or
- Post-secondary graduates who have moved back to PEI and have been living on PEI for a minimum of 6 months prior to their application date. For example, if a student graduated on May 9, 2021, moved out-of-province for a year, but moved back to PEI on July 10, 2023, then the earliest they can apply for a grant is January 11, 2024.
* 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.
* Effective November 1, 2022, all applicants are required to complete a Declaration of Prince Edward Island Residency in lieu of personal papers and statements. This document is part of the application form (see below).
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 loans 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 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 application form - Debt Reduction Grant Application Form
Obtain a copy of your degree, diploma, certificate, or unofficial transcript.
Obtain a print-out of your provincially-funded student loan balance from Edulinx. Here is the Edulinx student sign-in web page: https://pei.edulinx.ca/Eng/ContactUs.aspx(link is external)
Submit all forms and documents to our office (see contact information below). Please note, if you mailed original documents, they will not be returned.
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. For those expecting a refund, please ensure your mailing address is up-to-date with Edulinx.
Student Financial Services
PO Box 2000
176 Great George St, Suite 212
Telephone: (902) 368 4604