The Federal Perkins loan program, commonly called a Perkins loan, is a low-interest student loan for an undergraduate or graduate student. The loan helps students in financial need defer the cost of tuition. As of 2014, the interest rate of a Perkins loan is 5%. The student loan isn’t offered at all colleges or universities. Therefore, any students interested should check with their specific institutions to find out if the loan is offered.
Eligibility requirements
To be eligible for a Perkins loan, you must be either an undergraduate, graduate, or professional student enrolled part- or full-time. As a student, you must have a great financial need for the loan. Unlike other student loans, you’re not offered a Perkins loan unless you need it. The last requirement is going to a college or university that participates in the student loan program.
The amount of money you are eligible to borrow depends on three factors:
- Your financial need
- Any other aid you’re receiving
- Availability of loan funds at your university or college
A very important point to note is that not everyone who is eligible to receive the loan will because there is limited Perkins loan funding. To ensure there is Perkins money available to you, you have to submit your Free Application for Federal Student Aid (FAFSA) early. Colleges and universities tend to run out of money quickly.
Eligibility amounts
As an undergraduate student, you are eligible you receive $5,500 a year. The lifetime amount you can borrow as an undergraduate student is $27,500. If you are a professional or graduate student, you are eligible to take out $8,000 per school year. The total amount you can borrow as a graduate student is $60,000. The lifetime amount includes any Perkins loan you borrow during your undergraduate years. Any Perkins loan you receive will be applied to your tuition. Before you receive your student loan, you must fill out a promissory note. This document outlines all the information regarding a Perkins loan. You must sign this in order to get your loan. If there is any money remaining, you will receive a refund that will cover your other educational expenses such as books. You can change your mind about receiving a Perkins loan. Before the money is sent to your school, or disbursed, you can cancel part or all of the loan. You just have to notify your school that you no longer want the student loan.
Like many other students loans, a Perkins loan must be repaid. Approximately nine months after you graduate, leave school, or begin attending school part-time, you will start repaying the loan. The nine-month period is referred to as a grace period. It’s just time to get yourself financially together to start repaying your loan. In some cases, you can have the student loan forgiven. For example, if you are a teacher in a low-income school you may be excused from repayment. Otherwise, if you can’t afford to make your payments, you can request a deferment from the lender who holds your student loan.
