Applying and Qualifying for the Federal Perkins Loans

Low-Cost Campus-Based Financial Aid

Qualifying for a grant is ideal, but not all grants cover your entire tuition costs, especially when you factor in items like books, dorm fees and the cost of living in general. That is why loans play such a major role in financing a college education. That is also why so many students are knee deep in debt by the time they graduate.

Federal student loans offer the most affordable solutions. The Perkins Loan is a key component in the federal student loan arsenal and carries plenty of benefits and features that make it an excellent loan for eligible students.

Features of a Perkins Loan:

  • Low-interest, low-cost
  • Need-based
  • Available through participating colleges and universities
  • Optional loan cancellation for eligible borrowers
  • Available to eligible undergraduate and graduate students
  • 9-Month grace period
  • Fee-free
  • No credit checks

What is a Federal Perkins Loan?

The Perkins Loan program is an example of campus-based financial aid and is available to both undergraduate and eligible graduate students. Participating colleges and universities receive annual federal Perkins Loan allowances. From this coffer the school determines which students are most financially deserving of Perkins funds. Money is awarded on a first-come, first served basis so students are advised to accept early if they qualify for Perkins Loans. Some schools pad the Perkins Loans with their own funds so more students may qualify. Perkins Loans are fee-free and come packaged with a 9-month grace period versus the traditional 6-month for other federal aid programs.

If you accept a Perkins Loan, you borrow directly from your campus of choice. It is a subsidized loan, meaning the government pays the interest that accrues on your loan while you are in school and during the grace period. As an undergraduate student, you are limited to $4,000 per year, a lifetime limit of $20,000; and as a graduate student the limit is $6,000 a year, and $40,000 lifetime limit.

Many more students qualify for a Stafford Loan and not all colleges and universities participate in the Perkins program, but in the grand scheme of things the Perkins Loan may be the lowest cost loan available.

Qualifications for a Perkins Loan

Again, the biggest determining factor for qualifying for a Federal Perkins Loan is showing exceptional financial need. Besides the income brackets, however, there are also a few other requirements you need to know about. You must:

  • Be enrolled in school at least half-time.
  • Be enrolled in a college or institution that participates in the program.
  • Be a U.S. citizen, a permanent resident or a non-citizen that is eligible.
  • Have never defaulted on an education loan in the past.
  • Be registered with the Selective Service.
  • Have satisfactory grades.

Applying for a Perkins Loan

As with all financial aid, you must to file the FAFSA in order to be considered for a Perkins Loan. The government determines your eligibility; you cannot request Perkins Loan assistance. Once you’ve submitted your FAFSA, you should receive your Student Aid Report (SAR) in the mail. The SAR outlines your Expected Family Contribution (EFC). The EFC is the amount of money you are expected to pay out of pocket or with loans for your tuition. Within a few weeks, you should also receive award letters from the colleges to which you’ve applied detailing the types of financial aid you have qualified for, possibly including the Perkins Loan. You MUST return this letter indicating what financial aid you are accepting in order to receive any money.

If you are approved for Perkins Loan funds you must let your school know and the sooner the better; funds are limited and often disbursed on a first-come, first-served basis.

Repayment of the Perkins Loan

During the last few weeks of your college education your school provides you with loan repayment information relative to the Perkins Loan. You have a 9-month grace period in which to get settled and get a job before your repayment kicks in.

Loan Cancellation for Teachers

Students that are going into some types of public teaching jobs may qualify for Perkins Loan cancellation in whole or part. If you plan to teach in a low-income public school district, teach special education students, teach in a shortage area, or teach a subject designated as a shortage (science, math, foreign language) your Perkins Loan may be partially cancelled for every year you serve.