How can you apply for a Perkins loan?
To apply for a Federal Perkins Loan, you must complete a Free Application for Federal Student Aid (FAFSA) and a Master Promissory Note (MPN). The MPN is a legally binding document that shows the borrower owes a school. The note includes information about the loan’s interest rate, payment plan, and minimum payment rates; deferment and forbearance circumstances, cancellation clauses; credit bureau reports; late fees, attorney fees, collection costs and consequences for non-compliance.
The Perkins Program includes the Federal Perkins Loan, National Direct Student Loans (NDSL), and National Defense Student Loans (DL). No new DLs were made after July 1, 1972, but there are still some in the process of being paid for. A Perkins student loan must be used only for educational expenses.
What students are eligible?
This program is for students with financial need to help them finance post-secondary education at low interest rates (interest rate for PL and NDSL is 5% per annum).
What are the maximum loan amounts?
Annual limits are $5,500 for undergraduate students and $8,000 for graduate students. The aggregate maximum loan is $11,000 for undergraduate students (grade levels 1 and 2), $27,500 for undergraduate students (grade levels 3 and 4), and $60,000 for graduate students.
Who is the lender?
Perkins student loans are made by approximately 1,700 participating postsecondary institutions. The school’s loan fund is replenished by collections on outstanding loans made and reimbursements from the US Department of Education for expenses related to certain statutory loan cancellation provisions.
How can you apply?
To apply for a Federal Perkins Loan, you must complete a Free Application for Federal Student Aid (FAFSA) and a Master Promissory Note (MPN). The MPN is a legally binding document that shows the borrower owes a school. The note includes information about the loan’s interest rate, payment plan, and minimum payment rates; deferment and forbearance circumstances, cancellation clauses; credit bureau reports; late fees, attorney fees, collection costs and consequences for non-compliance.
What are the advantages?
The advantages of such a loan are that there are no loan origination fees or insurance, there is a grace period of nine months (whereas for other federal loans it is usually six months), there is only one interest rate 5% and the payment period is quite long (10 years). In addition, Perkins Loans are eligible for cancellation for teachers in designated low-income schools, as well as for teachers in designated areas with teacher shortages, such as math, science, and bilingual education. You can also cancel your loan if you are a Peace Corps volunteer.