Apply For Federal Perkins Loans
The Federal Perkins Loan Program is a school-based financial aid available to undergraduate and graduate students. Not all colleges receive annual Federal Perkins Loans awards. The participating college and universities determine which potential borrowers are worthy of the funds.
Perkins is a highly sought after fund, so it is advisable for students to apply as soon as possible to qualify for loans. Some colleges, to accommodate more students, add their own funds to Perkins.
Federal Perkins Loans
A student who can obtain a federal Perkins loan can obtain the funds directly from the school of her choice. The fund is subsidized, which means that the federal government pays the interest earned while you are enrolled in college until the grace period.
It is possible that more students qualify for another type of loan which is Stafford; however, many students are attracted to the federal Perkins loan because it is known to have the lowest cost available.
Who qualifies for federal Perkins loans? Do you have a strict list of requirements to be able to benefit from this educational fund? Actually, the most important qualifying factor in qualifying for the federal Perkins loans is the financial need of the applicant.
However, in addition to these requirements, there are also a series of requirements that you must have in order to obtain and enjoy this fund.
These Are The Requirements For The Federal Perkins Loans:
- The student must have financial needs.
- Must be enrolled in the school that participates in the loan program at least part time.
- The student must be a citizen of the United States, or may be a permanent resident or eligible non-resident.
- You must not have defaulted on any prior loan.
- Must present good or satisfactory grades.
How Much Can I Borrow From Federal Perkins Loans?
You can borrow up to:
- $5,500 for each year of undergraduate study. The total amount allowed for college students is $27,500.
- $8,500 for each year of graduate / professional study. The total amount allowed for graduate / professional students is $60,000, including federal Perkins loans that you borrowed as a student.
When The Borrower Have To Pay Back The Loan Amount?
If you attend school at least part-time, you have a nine-month grace period before paying. The grace period begins right after you graduate, drop out of school, or are enrolled less than half time. Those who are on active duty in the military, check to see if they are eligible for a longer grace period.
If you are enrolled less than half time, check with your financial aid administrator about your grace period. At the end of your grace period, you must begin to repay your loan. You are allowed up to 10 years to pay off your loans.
The United States Department of Education (ED) has issued special guidance for those called to active duty as a result of the terrorist attacks of September 11, 2001. If a borrower’s loans are in schooling status, deferral of tuition payment or a grace period in which the borrower is ordered to active duty or reassigned.
The lender must maintain the loans in that state during the borrower’s period of active service or reassignment, plus the time necessary for the borrower to resume enrollment in the next regular enrollment period reasonably available to the borrower. Maintenance of loan status cannot exceed a total of three years, including the period of time required for the borrower to resume enrollment.
For a borrower whose loans are in the process of repayment, the creditor must grant a forbearance (temporary suspension of payment) for the expected period of the borrower’s active duty status, beginning on the first day of active duty, which must not exceed one year. Forbearance beyond the initial period will require supporting documentation and a written agreement from the borrower.
To learn more about the loan repayment options that might be available to a borrower in this situation, you should contact the loan holder directly.
How Much Will I Have To Repay Each Month?
The amount of your monthly payment will depend on the size of your debt and the length of your payment period. The following table shows typical monthly payments and total interest charges for three different 5 percent loans over a 10-year period.
|Total Loan Amount||No.Of Payments||Monthly Payments||Total Interest Charges||Tiotal Charges|
Can My Federal Perkins Loans Be Canceled?
Yes. Federal Perkins loans can be canceled if the borrower dies or is permanently and totally disabled. A loan may also qualify for cancellation under other conditions, as long as it is not in default. Please see the table below for the list of cancellation provisions. For more information, contact your financial aid office.
If you are serving as an enlisted person in certain specialties of the Armed Forces, the US Department of Defense may, as an incentive for enlistment, repay a portion of your student loans. Please note that this is not a cancellation.
For more information, contact your hiring officer. Another type of payment assistance (again, not a cancellation) is available through the Nursing Education Loan Repayment Program (NELRP) of the US Department of Health and Human Services.
This program will help repay registered nurse education loan and various nursing programs in exchange for their service at eligible facilities located in areas experiencing nursing shortages. All NELRP participants must enter into a contract committing to provide full-time employment in an approved eligible health facility (EHF) for two to three years.
In return, the NELRP will pay 60 percent of the participant’s total qualified loan balance for two years or 85 percent of the participant’s total qualified loan balance for three years. For more information, call NELRP toll-free at 1-866-813-3753 or visit www.bhpr.hrsa.gov/nursing/loanrepay.htm.
If you have any questions about the terms of your Federal Perkins Loans, payment obligations, deferral, forbearance, or cancellation, check with the educational institution that granted you the loan. Only that school can grant deferment, forbearance or cancellation, or make other decisions related to your loan.
Is It Possible To Postpone The Repayment Of My Federal Perkins Loan?
Yes, under certain conditions, you can receive a “deferment” or “forbearance” on your loan, as long as the loan is not in default. During a deferral, you are allowed to temporarily postpone payments and no interest accrues. Look under “Federal Perkins Loans” in the Loan Deferment Summary Chart to see the list of available deferrals.
In addition, the educational institution that granted you the loan must automatically defer your Federal Perkins Loans for any period in which it performs a service that qualifies you for loan repayment. (See below for a description of loan cancellations; see next page for a list of service cancellations.)
Postponements are not automatic. You must request one through your school, usually using a deferral request form that your school can give you. You must submit your deferral request on time or you will pay a late fee. For more details on deferrals, contact your school’s financial aid office. If you are temporarily unable to meet your payment schedule, but are not eligible for a deferment, you may receive a forbearance for a specific, limited period.
During forbearance, your payments are postponed or reduced, or your pay period may be extended. However, interest continues to accrue and you are responsible for paying it. Tolerance is not automatic either. You may be granted a forbearance at intervals of up to 12 months at a time for up to three years. You must request forbearance in writing from the educational institution that granted the loan or the agency that the educational institution employs to service your loan.
You will need to provide documentation showing why the forbearance should be granted. You must continue to make scheduled payments until you are notified that the deferment or forbearance has been granted. Otherwise, you could become delinquent or go into default.
Federal Perkins Loans Forgiveness Happens Over Time
The Federal Perkins Loan Forgiveness program is not right for everyone because not all Federal Perkins Loans are eligible for forgiveness. Even if you meet all the eligibility requirements, cancellation is not automatic.
Here are four facts to keep in mind:
- You must have obtained a loan before the program expired on September 30, 2022.
- You must request a pardon from your school or your school administrator.
- Your loan cannot be paid off the same year it was disbursed.
- You must continue to make loan payments until your application has been processed.
- Another important note: Perkins loan forgiveness is requested annually and is granted in increments over four to five years. The path to full and partial cancellation is gradual.
Full Cancellation – In many cases, your original principal loan balance will be forgiven according to the following schedule. Please note that for each year you qualify for forgiveness, any interest you have accrued during that year will also be forgiven.
|1||15% , Plus Interest|
|2||15% , Plus Interest|
|3||20% , Plus Interest|
|4||20% , Plus Interest|
|5||30% , Plus Interest|
Partial Cancellation – A type of Perkins loan forgiveness eligibility cancels up to 70% of the loan amount for AmeriCorps VISTA or Peace Corp volunteers.
|1||15% , Plus Interest|
|2||15% , Plus Interest|
|3||20% , Plus Interest|
|4||20% , Plus Interest|
On the bright side, you can request pre-cancellation postponement if you are not eligible yet, but you will soon be. This is useful for recent graduates who have less than 12 months of experience in an eligible profession. It prevents them from making payments on their federal Perkins loans until they can begin claiming forgiveness.
Perkins Loan Forgiveness Is Compatible With Certain Jobs And Circumstances
Perkins loan forgiveness is granted to borrowers for one of two reasons: their professional calling entitles them to cancellation, or other special circumstances are at stake.
The following 13 vocations are eligible for loan repayment.
- VISTA or Peace Corps Volunteer: up to 70%
- Firefighter: up to 100%
- Police or correctional officer: up to 100%
- Nurse or medical technician: up to 100%
- Librarian with a master’s degree from a Title I school or public library serving Title I schools: up to 100%
- Attorney in a federal public or community defender organization – up to 100%
- Employee of a nonprofit child or family service agency – up to 100%
- Employed in a Head Start educational program: up to 100%
- Staff member in a state regulated child care program – up to 100%
- Early Intervention Service Provider for People with Disabilities – Up to 100%
- Special education teacher in a public school or educational service agency: up to 100%
- Full-time teacher in certain subjects in a teacher shortage area or higher educational agency serving low-income students: up to 100%
- Faculty member at a tribal college or university: up to 100%
A borrower working in a profession eligible for student loan forgiveness must obtain one year of professional experience before applying. A teacher should complete one academic year before completing the cancellation forms.
Certain professions, such as firefighter and librarian, were added to this list in August 2008. But your pre-2008 work experience in the field will not make you eligible for the federal Perkins loans repayment program.
Depending on your job, there may be more requirements. For example, teachers may need to teach a certain academic subject to be eligible.
There are other scenarios in which you may be eligible for Perkins loan cancellation:
- Permanent disability or death of the borrower
- Bankruptcy, if you can prove undue hardship
- School closing before completing your program
- Service in the armed forces in a hostile fire or imminent danger zone
For any of these scenarios, you will need to include supporting documentation. In the event of the death of a borrower, for example, a family member would have to send a copy of a death certificate to finalize the forgiveness of the loan.
Regardless of why you are requesting the cancellation of the Perkins loan, you should check with your school or school loan servicer periodically. Then you can make sure that any change in your situation or profession does not affect your eligibility.
A teacher who is transitioning from leading math classes to history classes, for example, may no longer be eligible for this program.
Eligibility can also be lost if you refinance or consolidate your Perkins Loans, so be careful when considering these options. Even a lower interest rate from refinancing could pale in comparison to the benefits of the federal Perkins loans cancellation program.
- Federal Perkins Loans