Federal Perkins Student Loans...
Your Lowest Federal Interest Rate
Federal Perkins student loans help relieve problems caused by student loan debt because they have low interest, easy repayment, and may even be canceled under certain conditions.
In many ways, they are the best student loan.
Your Perkins loan eligibility is decided by your FAFSA EFC number. (The lower, the better.)But, because schools contribute at least one-third of the government's appropriation for these loans, they are the ones who decide which of their students to award these funds to. Usually if you qualify for a Pell grant but you still need additional funds, you will be awarded a Perkins loan. Each school has its own 'packaging philosophy'. Their decisions about awarding Perkins loans will depend on these factors: - the amount of funding the school is entitled to under the federal formula
- the amount of other money the school has to distribute
- the amount of outside college grants and scholarships students bring with them
- the level of unmet need for students in any given year
- the official posture of the school towards college loans
Perkins loans have a fixed rate of 5%. This compares favorably to unsubsidized Stafford loans at 6.8% and even subsidized Stafford loans at 5.6%. (FFELP Parent PLUS rates are 8.5% and federal direct student loans Parent PLUS rates are 7.9%.) The Higher Education Opportunity Act (HEOA, August 14, 2008) increased the Perkins loan limits. They are now $5,500 per year for undergraduates (up from $4,000) and $8,000 per year for graduate students (up from $6,000). - There is a lifetime limit of $27,500 for undergraduates and $60,000 (including undergraduate loans) for graduate students. - Repayment starts after a 9 month grace period when you leave school. - Payments are made to your school, not the government. - Perkins loan forgiveness is available for Perkins loans. - In order to qualify for the income-based monthly payment formula, Perkins loans must be consolidated under the Direct Loan program. - Perkins student loans are subsidized loans. Interest is paid by the government until repayment starts.
Beginning July 1, 2010 borrowers who default on Perkins loans can be successfully rehabilitated (out of default) by making 9 consecutive payments rather than 12.Also, forbearance requests do not have to be made in writing, anymore. | 
Federal Perkins student loans funds have not been increased as part of the stimulus bill. There continues to be limited funds available for this program, so it is important to get your FAFSA in early.