What is a Perkins Loan?
A Federal Perkins Loan is a low-interest loan for both undergraduate and graduate students with exceptional financial need. Students need to apply for need-based federal student aid by completing the Free Application for Federal Student Aid (FAFSA) (http://www.fafsa.ed.gov) annually. The FAFSA will determine a student’s “Expected Family Contribution (EFC)” toward his or her college education for that year and their eligibility for a Perkins Loan. Federal Perkins Loans are made through a school’s financial aid office. The loan is made with government funds that you must repay to your school.
Brad Barnett: Perkins loan has been considered for many years as probably the best student loan out there. It is a Federal Student Loan. It has a fixed interest rate of 5%, so it’s not going to change regardless of what happens in the economy and it’s completely deferred until 9 months, after the students starts going to school at least half time and you don t charged any interest during that period. You only start getting charged interest when go into repayment. So, if take at out a loan, your Freshman year and you go through school at least half time and then you graduate and then 9 months later, you will start paying it back. Now, the important thing to know with Perkins loan is, it’s a limited fund. Some schools don t even have Perkins Loan Money available, but if you are going to an institution and they offer you a Perkins loans and you need a loan, then you want to consider a Perkins before you look at anything else and you probably want to try to accept it as quickly as possible
The Perkins loan is a federal loan guaranteed of up to $4,000 per year for undergraduate studies and $6,000 per year for graduate studies. The amount of the loan received is based on financial need and availability of other aid, with the repayment being deferred for up to 10 years. If the student fails to pay the agreed amount according to the repayment plan (known as a default), the recipient will not be able to obtain any other federal funding in the future. Also, the Perkins loan currently has a lower interest rate than other federal loans.
