Perkins Loans

If you've been sifting through the different financial aid options for students, you have probably come across several different types of loans, such as Stafford Loans and Pell Grants, which are offered by the federal government. You may have also come across another type of government aid known as Perkins loans. Designed to accommodate students with the greatest need, Perkins loans are much less commonly disbursed than many other government funds.

To be considered for a Perkins loan, you will need to fill out the FAFSA form that is used to qualify you for all other federal funding opportunities. These loans offer extremely low interest rates, longer term repayment options, and larger sums of money disbursed to the borrower. The EFC, or Expected Family Contribution as determined by the FAFSA, must be low or otherwise inefficient for students to qualify for a Perkins loan. Loans are available for both undergraduates and graduates who are seriously financially disadvantaged.

Similar to other federal loans and grants, Perkins loans must be reapplied for every academic year. Undergraduates are eligible for up to $5,500 in Perkins loans, while graduates may receive a maximum of $8,000. Unlike many loans, Perkins loans do not have a six-month grace period to begin repaying what you borrowed. Upon completion of the program or graduation, or if the student drops below half time, there is a grace period of nine consecutive months, after which payments become due. As long as students remain enrolled in at least half-time study programs, repayment will be deferred.

A standard Perkins loan will have a repayment period of approximately 10 years, though extreme hardship may warrant a lengthening of terms. The 10-year repayment period may require monthly, bimonthly, or quarterly payments at 5% interest, depending on the original amount borrowed by the student. Because the loan is disbursed directly through the college you attend, it is best to contact the financial adviser at your school if you need to defer your repayments or lengthen your terms.

Paying for school is not easy, but we are here to help. OEDb's student finance section will help you find the money you need to pay your tuition and other college expenses. We cover scholarships, college grants, and student loans. Scholarships and grants are both forms of "free money", meaning they don't need to be paid back. Scholarships are typically awarded by businesses or individuals, with the money being earmarked specifically for tuition. They can be awarded based on a student's location or by religious affiliation, such as Catholicism or Islam. Grants are typically awarded by governments or non-profit organizations and the money often can be applied to several different expenses a student may incur, not solely tuition. They can be awarded based on location or ethnicity, for instance African American or Hispanic. Loans are not considered "free money", because unlike scholarships and grants, they do need to be paid back after graduation. Common federal loans include Perkins and Stafford. Loans are also available by location.