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Federal Perkins
Loans
What is a Federal
Perkins Loan?
A Federal Perkins Loan is a low-interest (5
percent) loan for both undergraduate and
graduate students with financial need. Your
university is your lender, and the loan is
made with government funds. You must repay
this loan to your university.
How much can I borrow?
FAFSA Depending on when you apply, your
financial need, and the funding level at the
university you can borrow up to:
-
$4,000 for each
year of undergraduate study (For
students with at least two years of
undergraduate study the total amount is
$20,000; otherwise the total amount is
$8,000)
-
$6,000 for each
year of graduate study (The maximum
amount for graduate students is
$40,000,including any Federal Perkins
Loan obtained while an undergraduate
student.)
Are there any
additional charges for these loans?
No, there are no other charges. However, if
you skip or make late or partial payments,
you might have to pay a late charge plus any
collection costs.
How will I receive these funds?
Your university will either pay you directly
(usually by check) or credit your account.
You will receive the loan in at least two
payments during the academic year.
Can I cancel the loan after having signed
the promissory note?
Yes, you can. Your university must notify
you in writing whenever it credits your
account with your Perkins Loans funds. This
notification must be sent at least 30 days
before and no more than 30 days after the
university credits your account. You may
cancel all or a portion of the loan if you
inform the university 14 days after it has
sent you this notice or by the first day of
repayment, whichever is later. The
university can indicate when is the first
day of your repayment period.
If you receive Perkins Loans funds directly
by check, you may refuse the funds by
returning the check.
When do I pay back this loan?
If you are attending the university at least
half time, you have nine months after you
graduate, leave school, or drop below
half-time status before you must begin
repayment. (You might be eligible for more
than nine months if you are in active
military service.) This is called a grace
period. If you are attending less than
half-time, check with your financial aid
administrator to find out how long your
grace period will be. At the end of your
grace period, you must begin repayment of
your loan. You may be allowed as many as 10
years to repay the loan in full.
How much will my monthly payment be?
Your monthly payment amount will depend on
the size of your debt and the length of your
repayment period.
The following table illustrates typical
monthly payments at 5 per cent annual
interest for 3 different loan amounts over a
10-year repayment period.
Examples of typical
monthly payments for Perkins Loans
|
Total
Loan Amout |
No.
of
Payments |
Approximate Monthly Payments |
Total
Interest Charged |
Total
Paid |
|
$4.000
|
120 |
$42.43
|
$1,091.01 |
$5,091.01 |
|
$5.000 |
120
|
$50.03 |
$1,364.03 |
$6,364.03 |
|
$15.000 |
120 |
$159.10 |
$4,091.73 |
$19,091.73 |
Can I
postpone repayment of my Perkins Loan?
Yes, you can. Under certain conditions
you can receive a “deferment” or
“forbearance” on your loan, as long as
the loan isn’t in default. During a
deferment, you are allowed to
temporarily postpone payment, and no
interest accrues (accumulates).
Deferments are not automatic. You must
apply for one through your university,
generally using a deferment request form
your university can give you. You must
file your deferment request on time or
you will pay a late charge. For more
details on deferments, contact your
university’s financial aid office.
If you temporarily can’t meet your
repayment schedule but aren’t eligible
for a determent, you can receive
forbearance for a limited and specific
period. During forbearance, your
payments are postponed or reduced, or
your repayment period might be extended.
Interest continues to accrue, however,
and you are responsible for paying it.
Forbearance isn’t automatic either. You
may be granted forbearance in ntervals
of up to 12 months at a time for up to 3
years. You must apply in writing for
forbearance to the university that made
your loan or to the agency the
university employs to service your loan.
You will have to provide documentation
to show why you should be granted
forbearance. You must continue making
scheduled payments until you are
notified that deferment or forbearance
has been granted.
Can a Federal Perkins Loan ever be
canceled?
Yes, Federal Perkins Loans can be
canceled if the borrower dies or becomes
totally and permanently disabled. A loan
can also qualify for cancellation under
certain other conditions as long as you
are not in default. For more
information, contact your financial aid
office.
If you serve as an enlisted person in
certain specialties of the Armed Forces,
the U.S. Department of Defense might, as
an enlistment incentive, repay a portion
of your Federal Perkins Loan. Note that
this is not a cancellation. For more
information, contact your recruiting
officer.
If you have any questions about the
terms of your Federal Perkins Loan,
repayment obligations, deferment,
forbearance, or cancellation, check with
the university that made you the loan.
Only that university may grant
deferment, forbearance, or cancellation,
or make other decisions concerning your
loan.
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