Federal Perkins Loan

Answer 1

A Federal Perkins Loan is campus-based financial aid that offers educational assistance to students with financial need. The individual school assumes the role of the lender and accepts all loan repayments. Students have up to 10 years to repay the loan at a five percent interest rate. To begin the loan process, applicants must file a Free Application for Federal Student Aid, which is available on the Federal Student Aid website (fafsa.ed.gov) or the college financial aid office.

Eligibility

1. Be a U.S. citizen, permanent resident or eligible non-citizen.
2. Possess a valid social security number unless living in the Republic of the Marshall Islands, Federated States of Micronesia and the Republic of Palau.
3. Register with the Selective Service through the Selective Service Website (sss.gov), the post office or high school. This only applies to males between 18 and 25 years of age.
4. Possess a high school diploma or GED.
5. Obtain acceptance into a degree or certificate program at a participating school.
6. Demonstrate satisfactory academic progress.
7. Be current on any additional federal Stafford loans.

How Much Can You Borrow?

Eligible students can borrow to $5,500 as an undergraduate with a maximum of $27,500 for the entire academic program. Graduate students can receive up $8,000 per academic year with a maximum of $60,000, which includes the $27,500. Financial need, application date and school funding level determine student eligibility. The school determines the amount a student receives.

Advantages and Disadvantages

Perkins Loans have a set interest rate, which means payments remain fixed if interest rates increase. This loan has no origination or default fees. Students receive free life and disability insurance to cover repayment. A Perkins Loan has a nine-month grace period compared to the Stafford Loan six-month grace period. Students entering a public service field, such as education or law enforcement, may be eligible for a loan forgiveness or repayment program. Perkins Loan debt is also eligible for hardship and unemployment deferments, but ineligible for bankruptcy discharge. Some schools restrict eligibility to sophomores or higher. Schools may assess late payments when a student misses a payment, pays late or submits less than the required repayment amount. Interested students may obtain additional information and assistance by accessing the FAFSA website or contacting the Federal Student Aid assistance line at 1-800-433-3243.