Federal Perkins Loans
"Federal Perkins Loans" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
These loans are made at a very low interest rate out and are given only to the student. Students are responsible for making payments after they student graduates, leave school, or drop below half-time status. No interest accrues while the student is in school at least half-time. Once the repayment period begins the student has up to ten years to repay the loan. The money for these loans comes from the federal government and administered by the college financial aid office.
Federal Perkins loans are great! How do you get one? Well, that in a moment. Here are the stats. The Perkins Loan carries a 5% fixed interest rate and repayment doesn't begin until 9 months after the student graduates or drops below half-time attendance (6 credit hours). Once in repayment, the standard term is 120 months.
So, how do I get a Perkins Loan? The school you attend is allocated funding for the Perkins Loan by the government who leaves it up to the school to determines your eligibility. Eligibility for Perkins is determined as a part of constructing your financial aid award letter. The maximum loan you may receive is $3,000. Schools generally reserve Perkins funding for those students with the most financial need. However, typically, Perkins loans are more commonly given in the $1,000 to $1,500 range.
Many schools give Perkins for the first two years of study to augment your ability to borrow. This is because the maximum Stafford loan a student can take as a freshman is $2,625 and, as a sophomore, $3,500. Perkins funding can be renewed through the junior and senior years of study (in fact some graduate students may receive Perkins), but due to the limited availability of funding for this program, it is not likely for a student to receive it after the sophomore year. It isn't all bad, though because in the junior and senior years, the maximum Stafford loan jumps to $5,500.