Federal Perkins Loans
Federal Perkins Loans: Students who are able to demonstrate an extraordinarily high financial need may be able to qualify for a Federal Perkins Loan. This type of loan is low-interest and is available for both undergraduate and graduate students. The student's school lends them the money with help from government funds. Students are responsible for repaying their Perkins Loan directly to their school.
Under the Federal Perkins Loan program, you can borrow a maximum of $4,000 per undergraduate academic year and $6,000 per graduate academic or professional study year. You will not be charged any type of loan fees. But fees can be incurred if you miss a payment or make a payment smaller than the minimum. If you continue to miss payments, your loan may be subject to collection fees in addition to late payment fees.
You will be paid either directly from the school or your account will be credited with the funds. Students typically receive the loan amount in two payments spread out over the academic year. It is possible to cancel your Perkins Loan within 14 days of the date your school paid you or your account was credited with the funds. All students who attended school at least half-time get a nine-month grace period during which they do not need to make payments on their Perkins Loan. Active-duty military personnel have a longer grace period. When this grace period expires, you must begin repayment of your loan. All students can take up to 10 years to repay their loan. Monthly payments depend on the size of the loan and the length of time the loan is to be repayed in.
Even though all students are responsible for repaying their Federal Perkins Loans, there are situations in which the repayment can be postponed. There are two types of postponements: deferment and forbearance. If you qualify for deferment, you can postpone repayment without interest accruing during the deferment period. You must meet certain conditions, such as unemployment, to qualify for deferment. You must apply for a deferment through your school by filling out a deferment request form.
The other way you can postpone your repayment is through a forbearance. Forbearance means that your payments are either postponed or reduced, but interest does accrue during the forbearance period. Students can qualify for forbearance in 12-month periods for a total of 3 years. You must also apply for forbearance through your school or your lender in writing.
Although almost all borrowers are required to eventually pay back the entire amount of their loan, including interest, there are some cases in which all or a part of the loan amount can be forgiven. If a borrower becomes permanently disabled or dies, the entire loan will be forgiven. If the borrower enters certain professions, all or a part of the loan can be forgiven. These professions include teachers, special-education teachers, professional provider of disabled intervention services, employees of child- or family-service agencies, nurses, medical technicians, employees of the Head Start Program, Vista or Peace Corps volunteers. If a borrower files for bankruptcy, a portion of their loans may be forgiven if seven years have passed since the loan became due.
