What is a Federal Perkins Loan
There are many different types of federal education loans. Learn about federal perkins loans so that you can find the right student loan to help pay for your education.
A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with financial need. Your school is your lender. The loan is made with government funds, and your school contributes a share. You must repay this loan to your school, not to us.
How much can I borrow for my Federal Perkins Loan?
Depending on when you apply, your level of need, and the school's funding level, you can borrow up to
* $4,000 for each year of undergraduate study (the total amount you can borrow as an undergraduate is $20,000).
* $6,000 for each year of graduate or professional study (the total amount you can borrow as a graduate/professional student is $40,000, including any Federal Perkins Loans you borrowed as an undergraduate).
Other than interest, is there any charge to get these loans?
A fee is involved for Direct and FFEL Stafford Loans (click here for more information) but not for a Federal Perkins Loan. But, after you start to repay, if you skip a payment, make a payment late, or make less than a full payment, you might have to pay a late charge. If you continue not making payments as required, you will have to pay collection costs.
Can I cancel the loan if I change my mind, even if I've signed the promissory note agreeing to the loan's terms?
Yes. Your school must notify you in writing whenever it credits your account with your Perkins Loan funds. You may cancel all or a portion of your loan if you inform your school within 14 days after the date your school sends you this notice, or by the first day of the payment period, whichever is later. (Your school can tell you the first day of your payment period.) If you receive Perkins Loan funds directly by check, you may refuse the funds by returning the check to the school. How much will I have to repay each month?
Are there any tax incentives available for paying back these loans?
Yes, there are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to all loans used to pay for postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits.
Perkins - Continued
"An investment in knowledge always pays the best interest. ~Benjamin Franklin"
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