Federal Perkins Loans
A Federal Perkins Loan is a loan that is made through the Federal Perkins Loan Program. It is available to both undergraduate and graduate students that demonstrate a financial need.
What is a Federal Perkins Loan?
A Federal Perkins Loan is a loan that is made through the Federal Perkins Loan Program. It is available to both undergraduate and graduate students that demonstrate a financial need.
Am I eligible for a Federal Perkins Loan?
In order to be considered for a Federal Perkins Loan, you must meet all of the following criteria:
- Be an undergraduate, graduate, or professional student with exceptional financial need;
- Enrolled full-time or part-time; and
- Attending a school that participates in the Federal Perkins Loan Program.
How do I apply for a Federal Perkins Loan?
In order to apply for a Federal Perkins Loan, your first step must be to complete the Free Application for Federal Student Aid (FAFSA). Please note that there are limited funds with Federal Perkins Loans so it is important to apply as early as possible to be considered. You will also be required to sign a promissory note before you can be considered for the loan. Not everyone who qualifies for a Federal Perkins Loan will be receiving one due to these limited funds so apply for additional student aid as well.
Is there a deadline to apply for a Federal Perkins Loan?
There is no specific deadline to request a Federal Perkins Loan. There are, however, FAFSA deadlines that should be met. These deadlines vary by each school and state so you should check online to find the specific FAFSA deadline for your state and school.
How much can I borrow with a Federal Perkins Loan?
The amount of money you are able to borrow with a Federal Perkins Loan is decided upon by the school you are going to be attending. Generally, it depends on your financial need, any other aid you may already be receiving, and the amount of funds your school will be able to allot to you.
Undergraduate Students:
- Total amount allowed: $27,500
- Annual amount allowed: Up to $5,500
Graduate and Professional Students:
- Total amount allowed: $60,000
- Annual amount allowed: Up to $8,000
When will my Federal Perkins Loan funds be disbursed?
You will typically receive your Federal Perkins Loan funds in two payments during the academic year. Initially, your school will apply your first loan payment to your school account in order to pay for tuition, fees, room and board, and any other fees that are required to be paid up front. If any loan funds are remaining after those payments are made, your school will then issue you a refund so that you can pay for other educational expenses.
What is the interest on a Federal Perkins Loan?
The interest rate for the Federal Perkins Loan is 5% for both graduate and undergraduate students. You are responsible for all interest accrued during the entire life of the loan.
When am I required to pay back my Federal Perkins Loan?
You must begin making payments on your loan 9 months after your graduation, withdrawal, or your decrease in enrollment below half-time, unless you qualify for a deferment or forbearance. If you are attending school on a schedule that is anything less than half-time, contact your college or career school for their grace period specifications.
What are my Federal Perkins Loan repayment options?
Your monthly payment is calculated using the size of your debt and the length of your repayment period. The good folks over at www.scholarships.com illustrate what a monthly payment would be, using the example of a 10 year repayment period and a 5% loan:
Loan Amount of $4,000
- Number of Payments - 120
- Monthly Payment - $42.43
- Total Interst Charges - $1,091.01
- Total Charges - $5,091.01
Loan Amount of $5,000
- Number of Payments - 120
- Monthly Payment - $53.03
- Total Interst Charges - $1,364.03
- Total Charges - $6,364.03
Loan Amount of $15,000
- Number of Payments - 120
- Monthly Payment - $159.10
- Total Interst Charges - $4,091.73
- Total Charges - $19,091.73
Unlike many other loans, this is the only available repayment method for a Federal Perkins Loan. To make up for this, however, there are tax incentives available to you for paying back this loan.
This benefit only applies to federal and non-federal loans used to pay for the costs of post-secondary education. At a maximum of $2,500 in deductions per year, it's worth looking into. If you're interested in learning more about this benefit, click here to view the IRS Publication 970 Tax Benefits for Higher Education. This is a document that will explain more about this benefit. Additionally, you can call the IRS directly to inquire further at (800) 829-1040.
Who do I send my Federal Perkins Loan repayment to?
Your school is your lender. You will make your monthly payments to your school or their lender. Contact your school for further information, as this varies by school.