Changes to the provincial student loan program are being welcomed by the UPEI Student Union, which had been lobbying the province to make changes.
"This is going to make an incredible difference in the lives of students. This is going to put in over a thousand dollars a year and students need the money," said Jonathan Rix, the student union's vice-president of academic and external.
"There is 41 per cent of students right now being assessed at excess need of what the government can provide them, and they are going to get that money now."
The provincial government announced the weekly maximum student loan available will be increased from $165 to $175 per week, starting in the 2016-17 academic year.
The following year, the maximum weekly loan will increase according to inflation.
Other changes include the addition of a severe permanent disability benefit, a rehabilitation program for people who have defaulted on their student loans and the extension of the grace period for repayment after completing studies from six months to a year.