Perkins Loans

If your educational expenses seem like a far-away goal, the Federal Perkins Loan could provide you with the assistance you need. The Federal Perkins Loan is generally reserved for students with exceptional financial need. If your school determines that you are eligible for a Perkins Loan, it may be possible for you to borrow up to $4,000 per year, directly from your school, at a lower interest rate than other educational loans.

Your eligibility for a Perkins Loan is automatically determined by your school with information you submit on your FAFSA. Most schools use the same criteria used for Pell Grants to determine Perkins Loan eligibility. Schools often compete against each other by offering Perkins Loan funding rather than including Stafford Loans or private loans in order to create attractive financial aid packages for qualifying students in need. When educational programs are fighting for your attention, the result is often a more attractive financial package for you.

Perkins Loan Interest Rates and Fees
Perkins Loans are similar in some ways to Stafford Loans. Funding for the Perkins Loan comes from the Federal government, but you borrow directly from your school. You also don't need to begin repaying your Perkins Loan until you complete or leave your bachelor's degree program. The interest rate is fixed at a low 5% for the life of your loan as long as you make payments on time.

Unlike Stafford Loans, Perkins Loans carry no initial fees. You can use your full loan amount to help pay your educational expenses. Contact your school's financial aid office to find out how Perkins Loan funds are disbursed. 

Cancellation Programs
The deferment and cancellation options are another attractive feature of the Perkins Loan. You may be eligible to have all or part of your Perkins Loan cancelled if you work as a teacher and meet the following criteria:

• Teach in a special-education program and educate children at any age with disabilities
• Are employed at a school that serves students from low-income families
• Work in a field determined to have a shortage of teachers by your state education agency

After five years working in the above circumstances, the government may eliminate your entire Perkins Loan debt. Serving your community can reduce the number of loan repayments you have to worry about.