Maintaining Interest-Free Status and Repaying Your Loan

Interest Free Status

• If you are returning to full-time studies and not taking out another student loan, you must notify National Student Loan Service Centre that you are currently in full-time studies.
• A Schedule 2 for Canada Student Loans and a Continuation or Reinstatement of Interest Free Status form for PEI Student Loans are obtained and filled out by the Student Access Centre on the 1st floor of the Administration Building.
• These forms can only be filled in by the Student Access Centre when the student is currently in full-time studies.
• A completed Schedule 2 needs to be mailed or faxed to NSLSC and a completed Continuation or Reinstatement of Interest Free Status form needs to be sent to the lending institution(s) holding your provincial loans.
• Call your lenders after two weeks to ensure that they have received confirmation of your enrolment.
• Failure to notify lenders of your full-time status can result in your loans entering repayment.

Loan Repayment

• All students have a 6 month “grace period” upon conclusion of their studies, whether they have graduated or not, in which to find work and make arrangements with their lending institutions for repayment. During this six-month period Canada Student Loans accrue interest while the PEI loans are interest free during the 6 months period following the study period.
• Interest on Canada Student Loans can be variable at prime + 2.5% and PEI Student Loans can be variable at prime + 2%.
• For loans acquired after August 1, 2001, contact the National Student Loan Service Centre (NSLSC). For loans acquired before August 1, 2001, contact your lending institution.
• Be sure to stay in contact with your lenders regarding any changes to your personal information.
• Contact your lenders to arrange your payment schedule.

PEI Debt Reduction Grant For Full-Time Students:

• The maximum award of $2,000 per year of study with maximum funding based on the required length of your program, plus one year.
• This grant is paid to the lending institution that holds your loans.
• You must request the application for this grant from the PEI Student Financial Services (also available online).
• You must apply for this grant within one year of your end of study date.
• Eligibility:
• You have an outstanding loan total of more than $6,000 per year.
• You have graduated from your program of studies in a timely manner.

Interest Relief:

• If you are having trouble making student loan payments, you can apply for interest relief for either your Canada or PEI Student Loans.
• You can apply for Interest Relief for 6-month intervals, up to a maximum of 30 months, at any point during the repayment of your student loan.
• Students studying medicine may qualify for Interest Relief for the duration of their residency program. There is a form specific to this situation that must be filled out.
• Contact each of your lenders to apply.

Extended Interest Relief:

• If you have exhausted your 30 months of Interest Relief, are still unable to make your payments and 5 years have not passed since you left school, you may be eligible.
• This program extends your Interest Relief benefits up to 54 months from when you left school.

Debt Reduction:

• This program is designed to reduce the outstanding principle balance of the federal portion of student loans.
• Debt reduction lowers the principle amount of your loan and reduces your monthly loan payment to an affordable level based on your family income.
• You may qualify if:
• Five years have passed since you last attended a post-secondary institution;
• You have exhausted all Interest Relief; and
• Your loan payments exceed a given percentage of your income.
• You can receive up to three reductions on your loan prinicple in your lifetime, up to a total of $26 000, depending on your financial circumstances.
• Contact Canlearn or PEI Student Loans at 1-800-204-1685 for more information.