Federal Perkins Loans

Receiving a college degree requires financial assistance, unless the student has a lot of cash set aside for their educational expenses. The fact of the matter is most students don’t have enough cash to pay for college upfront. This is because of inflation, the cost of living, and the current state of the economy where there are very few jobs. However, the government provides financial assistance for students to be able to achieve their overall goals with a higher education. For example, Federal Perkins loans are student loans provided by the government at a low interest rate. These government student loans operate differently than traditional Stafford loans.

Federal Perkins loans are basically approved to students who can prove their current state of income is not enough to afford college. In other words, students who can prove that getting a higher education will be a financial burden will be approved for a Perkins loan. Students who can demonstrate the need for the government assistance will do so by providing financial information like bank statements and pay stubs. Students not only have to prove they need financial assistance when applying for a Perkins loan, they also must be attending school at least half time and the student must be a U.S. citizen or a permanent resident.

What makes the Federal Perkins loan attractive for students is the simplicity of repaying the loan. These types of government student loans have a fairly low interest rate of 5%, which is a fixed rate that remains the same during the entire life of the loan. In other words, current interest rates in the markets do not affect the loan. Paying back the loan typically is done over a 10 year period. The Federal Perkins loan also has a deferment program and a grace period as well, much like other government student loans.

The deferment program states that if the student is unable to pay the loan because of unemployment, their payments will be deferred. The grace period deals with the time the student graduates. Most other government student loans have a 6 month grace period after graduation, where the student must begin repaying the loan. A Perkins loan has a grace period of 9 months, which gives the student 3 additional months to find employment. The Federal Perkins loan is also eligible for the student loan forgiveness program that is offered to teachers. This program states that if the graduate teaches for at least 5 years at a low income elementary or secondary school, their Perkins loan will be forgiven.

Federal Perkins loans also offer other benefits to students like no fees on insurance and no application fees as well. Unlike the PLUS loan, the Perkins loan is offered to the student and not the parent. This means that the family will not be responsible for the repayment of the loan. Only the student will be responsible with paying the loan back. At 5% interest over 10 years, the Perkins loan is one of the easiest student loans to pay off.

In order to apply for the Federal Perkins loan, students must visit the FAFSA website to fill out the property application. Students must first go over their finances in order to make sure they can demonstrate the financial need for this type of student loan. Low income students will have a better chance at being approved for this loan than students who are unable to prove the need for financial assistance. Perkins loans are used to pay for tuition, books, room and board and other educational costs that is usually associated with obtaining a higher degree.