Additionally, you had a nine-month grace period upon leaving school before you have to begin repaying the loan, compared to just a six-month grace period with most other federal loans. The Perkins loan also allows for a more liberal loan cancellation policy compared to other federal loans. If you work in certain public service fields, such as a teacher, firefighter, law enforcement officer, or nurse, you can have up to percent of your loan canceled.
Because of these generous terms, accepting a Perkins loan was an excellent way to finance your post-secondary education. Check out Credible for more information on financing your college education. But, we also want you to follow these content guidelines. The comments or responses that Credible posts under its official account are not provided, reviewed or endorsed by any of the financial institutions unless specifically stated otherwise in the response.
Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Advertiser Disclosure. If you are still in school and attending at least half-time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment.
If you are attending less than half-time, the Department of Education suggests checking with your school to find out the length of your grace period. Perkins Loans must typically be repaid in full within 10 years following the completion of the nine-month grace period. Students typically repay the loan directly to their school or to a designated loan servicer.
When it comes time to repay your Perkins Loan, you may also have a number of other options. Your school's financial aid office or its loan servicing company can explain the options available in your case. If you're unable to start payments after the nine-month grace period, you can apply for deferment or forbearance to postpone repayment.
If you have a Perkins Loan from a previous school that's coming due—and you are still attending school at least half-time—you could be eligible for an in-school deferment. If you work in a public-service job—teaching, nursing, or firefighting—you may be eligible to have all or a portion of your Perkins Loan debt canceled after a certain period of time. Your loan may also be discharged under certain circumstances. These may include personal bankruptcy , total disability, or death.
You may also qualify for a discharge if your school shutters its doors. Perkins Loans can be eligible for repayments adjusted to suit your income level, but only if you consolidate them into a federal direct consolidation loan. The Department of Education cautions that "if you have federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you should not include your Perkins Loans when you consolidate.
If you're in an occupation eligible for loan cancellation, don't consolidate your Perkins Loan into a federal direct plan. There are four income-driven repayment plans, which differ slightly in their details:.
With all four income-driven repayment plans, any remaining loan balance is forgiven once you've made the required payments for the required number of years. You can consolidate your federal loans and also learn more about the process using the Direct Consolidation Loan Application on the U.
Department of Education's Federal Student Aid website. The American Rescue Plan passed by Congress and signed by President Biden in March includes a provision that student loan forgiveness issued between Jan. Although the federal government canceled the Perkins Loans Program, it still offers other student loans for those who demonstrate a need for financial aid. Some of these include:.
The amount of the loan is determined by your school and cannot exceed that limit. The term subsidized refers to the fact that the Department of Education covers the interest payments while you are still in school just like the Perkins program. But there's one caveat—Direct Subsidized Loans are available only to undergraduate students.
These loans are available to both undergraduate and graduate students regardless of financial need. Just like direct loans, the amount of your unsubsidized loan is determined by your school. But here's the difference between subsidized and unsubsidized loans —you are responsible for making interest payments even while you're in school.
Any interest that is not made while you are in school or during the nine-month grace period after graduation is capitalized, which means it's added to your principal balance. This program is intended to act as financial aid for undergraduate, graduate, and professional students. Unlike the other two programs, the borrower is the student's parent.
Students must be enrolled at least half-time for a PLUS loan. Money goes to the school to cover education-related expenses before any remaining funds are disbursed to the borrower. The schools use your EFC to decide how much federal aid to offer you. They do that by subtracting your EFC from their cost of attendance COA , a number that includes tuition, room and board, fees, and related expenses. In addition to some changes in the way the SAI is calculated, the change attempts to clarify what this figure actually is—an eligibility index for student aid, not a reflection of what a family can or will pay for postsecondary expenses.
To bridge the gap between your EFC and their COA, schools may offer you a package of financial aid that includes some combination of federal grants—known as Pell Grants —subsidized and unsubsidized Direct Loans, and paid work-study jobs.
Perkins Loans may be awarded to students who are eligible for Federal Student Aid most domestic students and have demonstrated financial need. Interest does not accrue on a Perkins Loan while a borrower is enrolled in school at least half-time, during a grace period or during an authorized deferment.
The borrower will be responsible for paying interest that accrues while the loan is in repayment or on forbearance. Perkins Loans have a grace period of nine months, starting when a borrower stops attending school at least half-time. During this grace period, interest does not accrue and no payments are required.
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