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 that the borrower owes a debt to a school. The note includes information about the loan’s interest rate, repayment plan, and minimum payment rates; deferral and leniency circumstances, cancellation clauses; credit bureau reports; late fees, attorneys’ 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 a few are still in the process of being paid. A Perkins student loan should be used for educational expenses only.
What students are eligible?
This program is for students with financial need to help finance post-secondary education at low interest rates (interest rate for PL and NDSL is 5% per year).
What are the maximum loan amounts?
Annual limits are $5,500 for undergraduate students and $8,000 for graduate students. The maximum aggregate 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 post-secondary institutions. The school’s loan fund is replenished with collections on outstanding loans made and reimbursements from the US Department of Education for expenses associated with certain 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 that the borrower owes a debt to a school. The note includes information about the loan’s interest rate, repayment plan, and minimum payment rates; deferral and leniency circumstances, cancellation clauses; credit bureau reports; late fees, attorneys’ fees, collection costs and consequences for non-compliance.
What are the advantages?
The advantages of a loan of this type are that there is no insurance or loan origination fee to pay, there is a grace period of nine months (whereas for other federal loans it is usually six months), there is only one 5% interest 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 teachers in designated teacher shortage areas, such as math, science, and bilingual education. You can also cancel your loan if you are a Peace Corps volunteer.