What Is A Perkins Loan?
What Is a Perkins Loan and How Do I Get A Perkins Loan?
We hear the question, what is a Perkins loan quite frequently. Basically, it is a federally funded loan by the Department of Education, with the money going directly to participating colleges. It can be used for undergraduate as well as graduate level studies.
However, the primary recipients of Perkins loans are those students who exhibit exceptional financial need. The definition of the term, exceptional financial need, is students with less than $10,000.00 of the Expected Family Contribution. It will also include students who have received other financial assistance, and still have some remaining financial need.
All of the above is based on information submitted on the FAFSA application. Any student interested in applying for a Perkins loan needs to be aware that there is generally a limited amount of funding available.
Most of each college’s allocation of these monies is granted to students during the summer term. Exceptions are made, but it will be on a case by case basis. So if you have an interest, please apply very early.
If you hear the question, what is a Perkins loan, you can remember that it has several advantages for those students that qualify. Some of them are as follows:
1. The interest rate is fixed at 5%
2. While the student is attending school, the government pays the interest on the loan.
3. After graduation, loan repayment is deferred for 9 months, not 6 like a student loan.
4. Plus, there are no fees associated with the loan.
5. No credit check on the applicant, so if you don’t have a good credit rating you still may qualify.
6. Low monthly payments. When the loan repayment begins, monthly payments are relatively small.
7. Loan forgiveness by service after graduation in the US through the Anmericorps program and in third world countries working with the Peace Corp. Annual amounts are set for loan forgiveness for each year of service.
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The loan does have some disadvantages in that not all colleges participate, and funding is somewhat limited. At the present time, the maximum amount that can be borrowed for one academic year by an under graduate is $5,500.00, and the total amount in pursuit of a bachelor’s degree can’t exceed $27,500.00.
For a graduate student, the maximum per academic year is $8,000.00 with a total of $60,000.00; however the total includes any balance borrowed as an undergraduate.
Another answer to the question, what is a Perkins loan, is that it acts as a bridge between grants and/or scholarships. They can be used to cover tuition at any of the approximate 1,900 private and public colleges and universities in the United States.
Loan forgiveness on Perkins loans can be accomplished by entering military service, working in certain occupations such as teaching, or public service work.
The question, what is a Perkins loan, has been answered, and the next question is how do I get a Perkins loan? You simply need to apply with the FAFSA application at any of the schools that participate in the program.
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10 responses to “What Is A Perkins Loan?”
Please join the discussion below...we'd love to hear from you.
Gust Lenglet – Platinum Author
I think of all my loans, the Perkins was among the best deals because of the fixed rate. I’m so glad I got one, though I’m not looking forward to paying everything back. I wish education could be free in America. WHY NOT?
One of the reasons is that our alleged leaders in government are more interested in giving foreign aid to practically every country in the world, and it’s in the BILLIONS. They try to buy loyalty and it can’t be done. Pakistan for one is getting substantial amounts of foreign aid and they hid Bin Laden for quite some time. How stupid can this country get?
I took out Perkins loans throughout college, though I took out private ones as well. Trying to get rid of the private ones faster… higher interest rates will bite you in the butt. -km
I know that feeling. Interest rates can be a major pain. Just when you think you might be able to pay off your loan, rates go up again and you’re still stuck in the hole.
Another great post. I have a Perkins loan I still haven’t been able to pay off yet, though I was exceptionally glad that I had it at the time when I was short on funds to finish out the term.
I haven’t had one of these loans myself, but it sounds like a great idea, as long as you are aware of your obligations. I like the fact that they primarily help out those students with critical financial need.
The Perkins Loan might be helpful but the key is not borrowing too much for school in the first place. So many kids make that mistake and then get suffocated with a mountain of debt after graduation. My daughter was lucky enough to find extra financial aid at FindScholarshipMoney.com or otherwise she would have been going to a state school or community college. Bottom line is don’t get in over your head with loans because they’ll stay with you for a long long time.
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Great job of presenting the pros and cons of Perkins loans. Hopefully I will qualify for one after high school; I live in a single parent household, and I could really use it.
The fixed interest rate of a Perkins loan is definitely the key selling point for me. It seems like a much more reliable option, especially compared to some of the major ripoffs being thrust at students these days.