Perkins Loans

For those looking for extra funding for higher education, it is quite helpful to know how to apply for a Perkins loan.   A Perkins loan is a federally granted loan reserved for students of higher education with exceptional financial need.  If you’re not sure whether you meet the qualifications to be considered in “exceptional financial need,” you will need to know how to apply for a Perkins loan.  To apply for this type of loan, you will need to fill out and submit the Free Application for Federal Student Aid, otherwise referred to as the FAFSA.  You can do so at the following address: http://www.fafsa.ed.gov/.

Here are a few other things that set a Perkins loan apart from other student loans;

• The borrower does not have to pay insurance or loan origination fees
• Funds are lent directly to the student, rather than a parent or other legal guardian, so families with existing financial burdens are not pushed further into debt
• It is possible that the loan may become eligible for cancellation (in part or in full), if the borrower enters into a profession such as law enforcement or even some medical professions
• While the Perkins loan is reserved for those students who are qualified as having “exceptional financial need,” students may qualify for the loan even if they do not meet the standard qualification of being from a family with an income of less than $25,000.  This is because Perkins loans are distributed by each individual educational institution, giving universities leeway to choose the students they deem most in need of the funds.

Perkins Loan Qualification and Eligibility
Before learning how to apply for a Perkins loan, it is helpful to be educated on the qualifications to be met in order to be eligible for this type of loan.  While many loans require students to be enrolled at least half-time, students do not have to meet this requirement for this type of loan, but still must meet a number of other qualifications.  These qualifications are as follows:

• Undergraduate and graduate students must be enrolled in an eligible school.  Students must be U.S. citizens, permanent residents, or eligible non-citizens.
• Students are required to show satisfactory academic progress and must not have any outstanding payments or unresolved defaults on any existing Title IV education loans or grants.
• Parents of dependent students who meet these requirements and are enrolled in school at least half-time are also eligible for a Direct PLUS loan, given that they do not have negative credit history.

Perkins Loan Interest rates
Once prospective students have learned how to apply for a Perkins loan and have actually gone through the steps to qualify for a Perkins loan, one of the many benefits is that they are designed to be a low interest rate loan.  Currently, the interest rate for Perkins loans is set at 5 percent.

Perkins Loan Repayment
While those just now learning how to apply for a Perkins loan and figuring out the basics are probably not interested in the details of repayment, it is always beneficial to be educated on all the details of a loan before applying.  Because funds related to Perkins loans are actually given to universities first and then dispersed to students by the universities themselves, repayment of these loans is a little different than other federally funded loans.  Because Perkins loan funds are dispersed to students by their specific institution, repayment is also made back to the school which dispersed the original funds, or an agent of this school.  Depending on the amount owed, students may have up to 10 years to repay their Perkins loans.  Another benefit of a Perkins loan is that once a student graduates, they are given a 9 month grace period to begin repayment of their loans, versus the usual 6 month grace period which is common with other student loans.

Perkins Loan Consolidation
Students who find it worth their while to learn how to apply for a Perkins loan and who have enjoyed the benefits of this low interest loan may also benefit from consolidating their Perkins loans.  Consolidation is a process by which all of the Perkins loans owned by a student are consolidated into just one loan.  The basic pros and cons of loan consolidation are outlined below.

• Perkins Loan Consolidation Pros: much lower monthly payment, repay only one lender, one time per month
• Perkins Loan Consolidation Cons: longer repayment period, pay more in interest over time

Recent Posts About Perkins Loans:

• Basics: The Perkins Loan