PEI Student Loans: Interest, Bursaries, Debt Reduction and Repayment

Prince Edward Island students apply once for federal and provincial aid through the province’s Student Financial Services. What sets PEI apart is how much of the provincial loan can end up not being repaid: provincial loans have been at a zero percent interest rate since October 2012, and graduates who live on the Island can apply for a Debt Reduction Grant against their provincial loan.

The federal Canada Student Loan part has charged 0% interest since April 1, 2023. How every province’s rules compare is on the student loans hub.

Two loans, two administrators

The provincial loan portfolio is held by the PEI Student Financial Assistance Corporation and administered by Edulinx, so after school you deal with two organizations: Edulinx for the provincial balance and the NSLSC for the federal one. (Source: PEI Student Financial Assistance Corporation, annual report 2016-17.) The federal account is covered in the NSLSC account guide. Interest rules can change, so the current terms of a provincial loan are confirmed with Student Financial Services or Edulinx.

Provincial grants and bursaries

The PEI Student Financial Assistance Corporation distributes the province’s grants for post-secondary students, including the George Coles Bursary, the George Coles Graduate Bursary, the Island Student Award, the Island Skills Award, the Community Service Bursary and the Debt Reduction Grant. Amounts and eligibility are set by Student Financial Services each year; the province’s grants are compared with other provinces’ in the provincial student grants guide.

The federal grants, assessed through the same application, are explained in the Canada Student Grants guide, including the grants for students with disabilities and students with dependants.

The Debt Reduction Grant

The Debt Reduction Grant reduces your PEI provincial student loan after you graduate, and it is tied to staying on the Island:

• Residency: you must have lived and kept your principal residence in PEI for at least six months immediately before applying. For a recent graduate, that means six months after the graduation date.
• Deadline: the application must be made within three years of your post-secondary graduation date.
• Documents: a copy of your degree, diploma, certificate or transcript showing the graduation date, and a printout of your current Edulinx provincial loan balance, all sent together.

(Source: PEI Student Financial Assistance Services, Debt Reduction Grant application.) Unlike Nova Scotia’s and Newfoundland and Labrador’s programs, which are assessed when you graduate, PEI’s grant needs an application.

Federal forgiveness for family doctors, nurses, teachers and other occupations in rural communities reduces the Canada Student Loan part; it and other provinces’ programs are compared in student loan forgiveness in Canada.

Repaying and getting help

Repayment of the federal loan starts after a six-month non-repayment period; Edulinx sets out the provincial loan’s schedule. With no interest on either loan, every payment reduces principal, and paying ahead only shortens the loan; the student loan repayment calculator shows how long a balance takes at a given payment.

For the federal loan, the Repayment Assistance Plan can lower the payment, to $0 below an income threshold; help with the provincial loan is arranged with Edulinx and Student Financial Services. Missed payments, default and bankruptcy are covered in what happens if you can’t pay your student loan.