Real Estate

Student loans: the Perkins loan

How can you apply for a Perkins loan?

To apply for a Federal Perkins Loan, you must complete a Free Application for Federal Student Aid (FAFSA) and a Master Note (MPN). The MPN is a legally binding document that shows that the borrower owes a school debt. The note includes information about the loan interest rate, payment plan, and minimum payment rates; circumstances of postponement and tolerance, cancellation provisions; credit bureau reports; late fees, attorneys’ fees, collection costs, and consequences for noncompliance.

The Perkins Program includes the Federal Perkins Loan, National Direct Student Loans (NDSL), and National Defense Student Loans (DL). No new mailing lists were made after July 1, 1972, but some are still in the process of being reimbursed. A Perkins student loan should be used for educational expenses only.

What Students Are Eligible?

This program is for students with financial need to help them finance postsecondary education at low interest rates (the interest rate for PL and NDSL is 5% per year).

What are the maximum loan amounts?

The annual limits are $ 5,500 for undergraduate students and $ 8,000 for graduate students. The total maximum loan is $ 11,000 for undergraduate students (grade levels 1 and 2), $ 27,500 for undergraduate students (grade levels 3 and 4), and $ 60,000 for graduate students.

Who is the lender?

Perkins student loans are made by the approximately 1,700 participating postsecondary institutions. The school loan fund is replenished through collections on outstanding loans made and reimbursements from the US Department of Education for expenses related to certain loan repayment statutory provisions.

How can it be applied?

To apply for a Federal Perkins Loan, you must complete a Free Application for Federal Student Aid (FAFSA) and a Master Note (MPN). The MPN is a legally binding document that shows that the borrower owes a school debt. The note includes information about the loan interest rate, payment plan, and minimum payment rates; circumstances of postponement and tolerance, cancellation provisions; credit bureau reports; late fees, attorneys’ fees, collection costs, and consequences for noncompliance.

What are the advantages?

The advantages of such a loan are that there is no insurance or loan origination fees to pay, there is a nine-month grace period (whereas for other federal loans it is generally six months), there is only one loan fee. 5% interest and the repayment period is quite long (10 years). Additionally, Perkins loans are eligible for cancellation for teachers in designated low-income schools, as well as for teachers in designated teacher shortage areas, such as math, science, and bilingual education. You can also cancel your loan if you are a Peace Corps volunteer.

Leave a Reply

Your email address will not be published. Required fields are marked *