What is a Federal Perkins Loan
September 18, 2009 by admin
Filed under Student Loans
The Federal Perkins Loan Program is designed to provide students who have extreme financial needs with long term, 5 percent interest rate loans. The school decides which students will be the best recipients, based on their lack of funding. Either an undergraduate or a graduate student can be eligible for a federal Perkins loan.
The school’s financial aid department handles arrangements for these loans. The government provides the money, with the school serving as the lender. The school gets a set amount of capital from the federal Department of Education and supplements it with their own funds. To be considered for a federal Perkins loan, you begin by completing a FAFSA (Free Application for Federal Student Aid) form.
Prerequisites for the loan are:
* At least half time enrollment in a degree program at a qualified institution
* United States citizenship, permanent resident status, or standing as an eligible non-citizen
* Acceptable academic record
* No unsettled Title IV loan or grant debt issues
* Satisfactory completion of Selective Service duties
Undergraduate students may receive as much as $4,000 per year, with a total of $20,000 available for the 4-year period. Those seeking a graduate degree or taking part in a professional study plan are eligible for up to $6,000 a year, and the combined loan amount for the undergraduate and graduate programs cannot exceed $40,000.
A student’s financial situation and the funds the school has available determines how much money a student receives. You should consult your school to find out the details.
You will get your loan proceeds from your school. You will receive the money in the form of a check, or they may add it to your student account balance. Unless you borrow only a small amount, the loan will probably be divided into two installments.
A student who receives a Perkins loan is not subject to the insurance or origination fees associated with other federal student loans. A federal Perkins loan is like a Stafford loan in many ways. However, the fees involved and the grace periods differ.
The repayment period for a Perkins loan starts nine months after your graduate or exit from school. Students who served in the military may qualify for help in repaying their loans. The amount you owe and your loan term will determine your monthly payment.
Your loan term may be up to ten years. Sometimes the borrower is granted a loan deferment. No payment is necessary during the deferment period, and interest is not assessed during that time.
In the case of a special circumstance, such as death or total, permanent disability of the borrower, a federal Perkins loan can be canceled. The occupation you choose after leaving school might also make you suitable for a loan cancellation.
Prospective borrowers frequently have other questions, including: What will my exact monthly payment be? What happens if I have to drop out for a semester due to a family emergency? What if I can’t pay my loan back? What are the rules for getting a deferment? Check with the financial aid office at the school of your choice to get the answers to these and any other questions you may have.
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