6 Benefits of a Federal Perkins Loan

A Federal Perkins Loan offers a lot of advantages to individuals who wish to attend college but could not afford the demands of educational expenses. This type of loan is only made available to students who have exceptional financial needs and an applicant's eligibility will be determined through an application on the FAFSA. If a student qualifies, the benefits he or she can avail in a the loan are:

  1. Maximum amount. An undergraduate student can borrow up to the total amount of $27,500 for the entire term of the program. Each year of the study, he or she can borrow up to $5,500 to fund college expenses. For students taking up graduate programs, a total amount of $60,000 for the whole degree courses is made available combined with the total amount loaned as an undergraduate. He or she can be granted a maximum amount of $8,000 for each academic year.

  2. Lower interest rate. Perkins loan has the lowest interest rate compared to most of the federal student loans offered by the U.S. Department of Education. The student will only pay an interest rate of 5% per annum. And since it is a subsidized loan, the interest will be paid by the government while the borrower is in-school and within the grace period.

  3. Longer grace period and student loan repayment term. The borrower has 10 years to repay the loan. He or she is given a grace period of nine consecutive months after he or she graduates, leaves, or drops from school. After the grace period ends, the student should then begin or resume in repaying the loan.

  4. No fees. Unlike other federal student loans, Perkins loan does not involve extra fees and charges like origination or default fees to avail the fund. However, in cases where the student fails or misses to pay the borrowed money, he or she may be charged for a penalty and other related collection fees.

  5. Fast and easy disbursement. Since Perkins loan is a campus-based type of loan program, the student will get the disbursement directly from his or her school. The payment is given either by a check or will be charged to his or her school fees. Usually, the school pays the student in at least two payments within the school year. If and when the student needs additional funds during a payment period, he or she can request from the school for it. Depending on the necessity of the requested fund, the school is given the discretion whether to approve it or not.

  6. Availability of student loan deferment. Any college student with a Perkins loan can temporarily postpone the loan repayment as long as he or she meets the deferment guidelines and the loan is not in default. If the student is in financial hardships or is not able to find a full-time job for three years, he or she may apply for this option. When a deferment request is approved, the borrower does not have to worry about the interest because during this period, no interest will be collected.

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