Perkins Loans: What You Need to Know

Perkins Loans are a great way to finance your education. They offer low interest rates and flexible repayment options. But there are some things you need to know before you apply for a Perkins Loan. In this blog post, we will discuss the basics of Perkins Loans, including who is eligible for them, how to apply, and the benefits of using them to pay for school.

Table of Contents

What are Perkins Loans?

Perkins Loans are low-interest federal student loans for undergraduate and graduate students with exceptional financial needs. The interest rate on Perkins Loans is fixed at five percent. Perkins Loans are administered by the schools that participate in the program, and they are made through the William D. Ford Federal Direct Loan Program.

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Who is eligible for Perkins Loans?

To be eligible for a Perkins Loan, you must be enrolled in an eligible degree or certificate program at a participating school. You must also be enrolled at least half-time, and you must demonstrate financial need.

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How do I apply for Perkins Loans?

To apply for a Perkins Loan, you must complete the Free Application for Federal Student Aid (FAFSA). You will then need to contact the financial aid office at your school to see if they participate in the Perkins Loan program. If they do, you will need to complete a Perkins Loan Master Promissory Note and promissory note counseling.

What are the benefits of using Perkins Loans?

There are many benefits to using Perkins Loans to finance your education. One of the biggest benefits is that Perkins Loans offer low interest rates. Another benefit is that you can have your loan forgiven if you work in certain public service jobs. Additionally, repayment on Perkins Loans is flexible, and you can choose from a variety of repayment plans that fit your budget.

FAQs

Are Perkins loans subsidized?

No, Perkins Loans are not subsidized. However, they do have a fixed interest rate of five percent.

What is the maximum amount I can borrow with a Perkins Loan?

The maximum amount you can borrow with a Perkins Loan depends on your financial need, the cost of attendance at your school, and whether you are an undergraduate or graduate student. Undergraduate students can borrow up to $5000 per year, and graduate students can borrow up to $8000 per year.

When do I have to start repaying my Perkins Loan?

You will have nine months after you graduate, leave school, or drop below half-time enrollment before you are required to begin repaying your Perkins Loan.

What is the grace period on Perkins Loans?

The grace period on Perkins Loans is nine months. This means that you will not be required to begin making payments on your loan until nine months after you graduate, leave school, or drop below half-time enrollment.

What is the interest rate on Perkins Loans?

The interest rate on Perkins Loans is fixed at five percent.

What are the repayment options for Perkins Loans?

There are several repayment options for Perkins Loans, including standard, extended, graduated, and income-sensitive repayment plans. You can choose the repayment plan that best fits your budget.

What is the maximum repayment period for Perkins Loans?

The maximum repayment period for Perkins Loans is ten years. However, if you choose an extended repayment plan, you may be able to extend your repayment period up to 25 years.

Can I have my Perkins Loan forgiven?

Yes, you can have your Perkins Loan forgiven if you work in certain public service jobs. You may also be eligible for loan cancellation if you become disabled or die.

What are the fees associated with Perkins Loans?

There is a five percent origination fee on Perkins Loans. This fee is deducted from your loan disbursement. There are no other fees associated with Perkins Loans.

What is the default rate on Perkins Loans?

The default rate on Perkins Loans is relatively low. For the federal fiscal year 2017, the default rate was three percent.

What is the difference between a Perkins loan and a direct loan?

There are several differences between Perkins Loans and Direct Loans. One of the biggest differences is that Perkins Loans have a fixed interest rate of five percent, while Direct Loans have variable interest rates. Additionally, Perkins Loans offer flexible repayment plans and the possibility of loan forgiveness, while Direct Loans do not. Finally, Perkins Loans are only available to students with financial needs, while Direct Loans are available to all students.

Is a Perkins loan a federal loan?

Yes, Perkins Loans are federal student loans. They are administered by the Department of Education and backed by the federal government.

What happens if I can’t repay my Perkins Loan?

If you can’t repay your Perkins Loan, you have a few options. You can choose to defer your loan, which means that you temporarily postpone making payments. You can also choose to forbear your loan, which means that you temporarily stop making payments. If you still can’t repay your loan after deferment or forbearance, you may be eligible for loan consolidation. Loan consolidation allows you to combine your Perkins Loan with other federal student loans into one loan with a single monthly payment.

What are the benefits of consolidating my Perkins Loan?

There are several benefits to consolidating your Perkins Loan. First, you will have a single monthly payment instead of multiple payments. Second, you may be able to lower your monthly payment by extending your repayment period. Finally, you may be able to qualify for a lower interest rate.

What if I have further questions?

If you have any other questions about Perkins Loans, please contact the financial aid office at your school. They will be able to provide you with more information about this program. Thanks for reading!

The bottom line

Perkins Loans are an excellent way to finance your education. They offer low interest rates, flexible repayment options, and the possibility of loan forgiveness. If you are looking for a way to finance your education, Perkins Loans are a great option. Be sure to research the program and understand the eligibility requirements and application process before you apply. And remember, if you have any questions about Perkins Loans, be sure to contact your financial aid office for more information.