Financial Aid for Students Who Need It
A Federal Perkins loan is a need-based student loan offered by the U.S. Department of Education for undergraduate and graduate students who demonstrate exceptional financial need. It means that this low-interest loan is awarded only for students who are not able cover tuition costs themselves. And the government helps them by offering special type of financial aid – the Perkins loan.
The system of how the funding process works is based on the campus-based loan program. A school acts a lender. Federal Perkins loans are made through a school’s financial aid office using funds provided by the federal government. A loan will be paid through your school and there are two ways to receive funds: it pays you directly or applies your loan to your school charges. A borrower must repay this loan later.
How To Apply Quickly
To apply for Perkins student loans – submit the Free Application for Federal Student Aid (FAFSA). It’s the only way to apply for federal student loans.
There are actually two ways to submit the FAFSA: using the FAFSA website by filling out application and sending it online or by printing the form and mailing it. The web method of applying is the most popular today.
Benefits You Should Know
Federal Perkins loans have a fixed interest rate of 5% for the duration of the ten-year repayment period. It’s a subsidized loan meaning that the interest does not accrue while you’re in school and during grace periods.
The grace period lasts 9 months after graduation. In this period a borrower is not charged interest. However the term “grace period” takes place if you’re attending school at least half time and it starts after you graduated, left school or dropped below half-time status.
The repayment period is a 10-year period. The interest rate remains the same for all 10 years.
There are no origination fees (as there are in Stafford loans) or default fees for this type of loan. It’s great advantage for students because it allows saving more money. Perkins loans are the best type of student financial aid available.
How Much Money Can Be Borrowed
The loan annual limits (funds available for students) depend on financial need of a student, the time of applying and availability of funds at school.
- Undergraduates may borrow up to $5,500 per academic year ($27,500 in total)
- Graduates may borrow up to $8,000 per academic year ($60,000 in total)
Practical strategy: As it said before, availability of funds at school is one of the main factors in getting amount of money you need. The best strategy: apply early for the FAFSA and college admission.
Perkins Loans Summary
Here’s the short summary of Perkins loans benefits described before:
- Low interest rate – 5%
- Long grace period – 9 months
- No origination fees
- No default fees
- No credit check required (the reason for this is because Federal Perkins student loans are need-based and your credit score does not really matter).
