Students who are facing an exceptional financial need are able to apply for a Perkins Loan. Often referred to as the Federal Perkins Loan Program, this loan is only given to students who are able to display a financial need for it. The loan is available for both undergraduate and graduate students who are currently enrolled in college.
Below, we will go over everything you need to know about Perkins Loans and whether or not you qualify for it.
Who Qualifies for a Perkins Loan?
Not every student will qualify for a Perkins Loan and it is important to make sure you read over the eligibility requirements before you apply for the loan program. Some of the eligibility requirements include:
- Having an exceptional financial need
- Attending a school that offers the Perkins Loan program
- Enrolled in school part-time or full-time
These are the basic eligibility requirements and there may be more requirements that you need to meet depending on your school and verification process. Many of these requirements will be determined based on your FAFSA as well.
Benefits of the Perkins Loan
There are a number of benefits with the Perkins Loan and many students often overlook this loan program altogether because they do not know it exists or they do not understand it.
One of the biggest benefits of the loan program is that it provides low income students and students struggling with poverty the opportunity to go to college and earn themselves a degree.
The next benefit is that the interest rate for a Perkins Loan is only five percent, which is lower than other federal student loan options, like the Stafford Loan, Parent PLUS Loan, and Grad PLUS Loan.
How Much Will I Receive?
The amount of funds that you will receive with the Perkins Loan will depend on a couple of different things including your financial need, the cost of your tuition and other educational expenses, and how much money you receive from other sources.
It is important to make sure that you must apply early on for financial aid if you are planning to be considered for the Perkins Loan. Once the funds are used up, students will no longer be able to receive the Perkins Loan until the next semester.
Undergraduate students can receive up to $5,500 per year under this loan program and the total amount you can borrow in undergraduate status is $27,500.
Graduate students can receive up to $8,000 per year with the total amount as a graduate student maxing out at $60,000. It is important to note that the $60,000 includes the amount you borrowed as an undergraduate student as well. So, for example, if you took out the full $27,500 as an undergraduate, then you would have $32,500 left as a graduate student.
How Are the Funds Applied?
The funds that you are eligible to receive are sent directly to your school and applied to your account. The money is used to pay for any outstanding charges you have for your tuition, books, fees, room and board, and other costs of schooling.
If there is any money left over after the fees are paid, then your school will issue you a refund for the overage. You are eligible to use the refund to pay for any additional educational costs that you have.
If you do receive a refund, but you do not want it or do not need to use it, then you can send it back to your loan provider. The amount you return will be applied directly to your loan balance and you will not be charged an interest amount on this portion as long as it is sent into the loan servicer within the stated timeframe.
How Does Repayment Work?
The Perkins Loan is required to be paid back, but it does carry a low interest rate of five percent, which is typically better than even some of the best private student loans. You do not have to pay back the loan while you are in school, unless you drop below half-time.
Once you graduate or leave school, you are given a nine-month grace period until you need to start paying your loan back. The amount that you need to pay back is determined by your loan provider.
If you are interested in the Perkins Loan or if you have an exceptional financial need and want to apply for it, speak with your college financial aid counselor. He or she can help you navigate through the paperwork and apply directly to the program.