If you’re a student who needs financial aid to cover your college expenses, you might want to consider applying for a Perkins loan. This type of loan is offered by the federal government to help students with exceptional financial need. In this article, we’ll guide you through the process of applying for a Perkins student loan.
What is a Perkins student loan?
A Perkins student loan is a federal loan that’s designed to help students with exceptional financial need. The loan is named after Carl D. Perkins, a former congressman who was a strong advocate for educational opportunities. Unlike other federal student loans, Perkins loans are made by the college or university you’re attending, using a combination of federal and institutional funds. This means that the availability of Perkins loans can vary from one school to another.
Perkins loans have a fixed interest rate of 5%, and there are no fees associated with the loan. You don’t have to start making payments on a Perkins loan until nine months after you graduate or drop below half-time enrollment. The loan has a 10-year repayment period, and you can borrow up to $5,500 per year as an undergraduate student, and up to $8,000 per year as a graduate or professional student.
Eligibility requirements for a Perkins student loan
To be eligible for a Perkins student loan, you must:
- Be enrolled at least half-time in an undergraduate, graduate, or professional program at a school that participates in the Federal Perkins Loan Program.
- Demonstrate exceptional financial need, which is determined by the information you provide on your FAFSA form.
- Be a U.S. citizen or eligible noncitizen.
- Have a valid Social Security number.
- Maintain satisfactory academic progress.
- Not be in default on any federal student loans or owe a refund on any federal grants.
How to apply for a Perkins student loan
Applying for a Perkins student loan involves the following steps:
Filling out the FAFSA form
To apply for a Perkins student loan, you must first complete the Free Application for Federal Student Aid (FAFSA) form. This form collects information about your family’s financial situation, such as income, assets, and taxes paid. Based on this information, the federal government will determine your Expected Family Contribution (EFC), which is the amount you and your family are expected to contribute toward your college expenses.
Completing the Perkins loan application
Once your school receives your FAFSA results, it will notify you if you’re eligible for a Perkins student loan. If you are, you’ll need to complete a Perkins loan application, which is usually available on your school’s financial aid website or through the school’s financial aid office. The application will ask for information about your enrollment status, academic program, and other personal details.
Waiting for the loan decision
After you submit your Perkins loan application, your school’s financial aid office will review your application and determine the amount of the loan you’re eligible to receive. If you’re approved for the loan, you’ll receive an award letter that details the loan amount, the interest rate, and the terms of the loan.
Accepting the loan offer
If you decide if you decide to accept the Perkins loan offer, you’ll need to sign a promissory note, which is a legal document that outlines the terms and conditions of the loan. This document will specify the amount of the loan, the interest rate, and the repayment terms. You should read the promissory note carefully and make sure you understand all of the terms before you sign it.
Repaying a Perkins student loan
Once you graduate or drop below half-time enrollment, you’ll need to start making payments on your Perkins student loan. The loan has a 10-year repayment period, and you’ll make monthly payments until the loan is paid off. If you have trouble making payments, you can request a deferment or forbearance, which will temporarily suspend your loan payments.
Perkins loan forgiveness options
There are several ways you can have your Perkins student loan forgiven or canceled. These include:
- Working in a qualifying public service job for a certain period of time.
- Teaching in a low-income school or in a subject area that has a shortage of qualified teachers.
- Serving in the Peace Corps or AmeriCorps.
- Becoming totally and permanently disabled.
Perkins loan vs. other types of federal student loans
Perkins loans are just one type of federal student loan. Here’s how they compare to other federal loan options:
- Direct Subsidized Loans: These loans are available to undergraduate students who demonstrate financial need. Like Perkins loans, they have a fixed interest rate and don’t accrue interest while you’re in school.
- Direct Unsubsidized Loans: These loans are available to undergraduate and graduate students regardless of financial need. They have a higher interest rate than Perkins loans and accrue interest while you’re in school.
- Direct PLUS Loans: These loans are available to graduate or professional students and parents of undergraduate students. They have a higher interest rate than Perkins loans and require a credit check.
Pros and cons of Perkins student loans
- No fees.
- Fixed interest rate.
- No payments required while you’re in school.
- Loan forgiveness options.
- Not available at all schools.
- Limited funding available.
- Available only to students with exceptional financial need.
- Not as flexible as other federal loan options.
Frequently asked questions about Perkins student loans
- How do I know if my school participates in the Perkins Loan Program?
- You can check with your school’s financial aid office or visit the Federal Student Aid website.
- How much can I borrow with a Perkins student loan?
- As an undergraduate student, you can borrow up to $5,500 per year, and as a graduate or professional student, you can borrow up to $8,000 per year.
- What is the interest rate on a Perkins student loan?
- The interest rate on a Perkins loan is fixed at 5%.
- Can I get a Perkins loan if I already have other federal student loans?
- Yes, you can still be eligible for a Perkins loan even if you have other federal student loans.
- How long do I have to repay a Perkins student loan?
- The loan has a 10-year repayment period.
Applying for a Perkins student loan can be a great way to cover your college expenses if you have exceptional financial need. By following the steps outlined in this article, you can complete the application process and receive the funds you need to pursue your education.