Scholarship Talk

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With the cost of a college education rising astronomically each year, students and their parents cannot afford to cover the entire cost out of pocket. Even if your student does qualify for financial aid, chances are it still won’t be enough to cover the entire cost of tuition, books and fees, room and board (if applicable) and other necessary expenses. 

Thankfully, college loans are available to help you and your child meet college expenses. Even if your student qualifies for financial aid or scholarships, they can still be eligible for a loan to cover what other aid doesn’t! 

If you are looking for viable loan options for your child, federal loans are by far the best way to go. The following guide will explain Federal Perkins Loans, and how they can help cover the cost of your child’s education. 

Any questions you have about Perkins Loans will hopefully be answered in this guide. However, if you need additional assistance please visit the Student Aid website for more information. 

What are Federal Perkins Loans? 

If you have never applied for a loan before, it can be a scary and confusing process. However, understanding a Federal Perkins Loan is relatively simple. 

Whether you are an undergraduate or graduate student, Perkins loans are a low-interest option to help cover the costs of a college education. 

In order to qualify for a Federal Perkins loan however, you need to meet certain eligibility criteria when it comes to financial need. 

The government pays for the loan (with your school contributing a share), and you repay the loan to your school, not the government. 

How much can I borrow? 

It’s important to keep in mind when shopping around for loans that different loans have different borrowing limitations. 

For undergraduate students, you cannot borrow more than $20,000. However, you cannot borrow this entire sum right away. You may borrow up to $4,000 per year while you are enrolled in an undergraduate course of study. 

If you are a graduate student, you may borrow up to $6,000 per year. The total amount of money borrowed cannot exceed $60,000 (this includes any Perkins loans you may have received as an undergraduate student.) 

Are There Charges to Get a Federal Perkins Loan? 

This question seems to pop up quite frequently, and with good reason. If you read my previous article about Stafford Loans, you might have noticed that those loans come with additional fees aside from interest. 

The good news about Federal Perkins Loans is that there are no additional fees (other than interest) to obtain a loan.  

However, please keep in mind that if you are late on a payment, skip a payment, or neglect to make a full payment you may be subject to additional late charges. Please look over your loan paperwork for complete details. 

How will the money be disbursed? 

Generally speaking, if you obtain a Perkins Loan the school may disburse a check to you or credit your account directly. 

Don’t expect the entire loan amount up front – usually, your school will disburse two loan payments to you throughout the academic year. 

What if I want to cancel the loan? 

Believe it or not, even if you’ve signed a promissory note agreeing to the Perkins Loan terms, you can still cancel the loan agreement. 

Because your school must notify you whenever they credit your account with loan funds, you have the option to cancel the loan within 14 days after receiving written notice of fund disbursement. 

If your school does not credit your account but instead sends you a check directly, you may refuse the loan funds by returning the check to your school. 

If you fail to do either of these things before the cutoff date, you will be considered in acceptance of the loan and will be required to abide by the loan agreement as stated. 

When does the loan repayment period begin? 

Provided you are attending school at least half time, once you graduate, leave school or drop below half-time status you have 9 months before you MUST begin repaying the loan. 

This period of time is referred to as your grace period. If you drop below half time attendance, your grace period may differ from the standard. Speak with a financial aid counselor at your school to determine what your grace period might be. 

Once the grace period has ended on your Federal Perkins Loan, you must begin repaying. Depending on your individual loan agreement, you may be allowed up to 10 years to repay the entire loan amount! 

If you are unsure about the monthly payment amount you’ll be required to make, that will depend on how much you owe and the length allowed for repayment. Contact your school for additional information about this. 

Additionally, if you need to postpone repayment of your Perkins loan, you might be able to do so under certain conditions. 

If your loan isn’t in default, you may be able to request a deferment or forbearance on your loan. This will allow you to temporarily postpone payments, with no interest accruing during this time. 

In order to receive a deferment, you must apply for one through your school. If you do not file your request on time, you will be subject to a late charge. Speak with a school financial aid adviser for more information about postponing your loan repayments. 

While parents and children may not be able to fund the entire cost of a college education completely out of pocket, it’s good to know there are Federally-funded options that will help cover the expense of higher education. 

Hopefully, this guide served to answer the most common questions about Federal Perkins Loans. 

If you need additional information about these loans, or to learn more about Federal Perkins Loans, speak with a financial aid counselor at your school or visit the Student Aid website. 

Now you can have help paying for college without breaking the bank!