ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Low Interest Loan Options With Federal Perkins Loans

Updated on December 9, 2019
Nicoartz profile image

I have done a lot of SEO content writing for websites; thus, I have done a ton of research about loans, credit cards, and consolidation.

Low interest loan options with Federal Perkins loans

Federal Perkins Loans are loans offered by the United States (U.S.) government for students who are in financial need. Named after U.S. House of Representatives from Kentucky, Carl D. Perkins, Perkins loans carry a fixed interest rate of a flat 5% over a ten year repayment period. Unlike Stafford Loans that allow a 6-month repayment grace period, Perkins loans offer a generous 9 month grace period. This means students will not have to begin repayment until the 10th-month post-graduation or withdrawal from college. These are subsidized loans, meaning interest does not accrue until after their 9 month grace period of the loan has ended. In certain situations, the loan payment may be postponed by receiving a deferment or forbearance or even canceled. Note that if payment is due and not paid on time, a late fee may be incurred. If payments continue to go delinquent you risk defaulting on your student loan.

Federal Perkins - Low Rate Loans

Low Interest Rates
Low Interest Rates | Source

Who qualifies for Federal Perkins loans?

The U.S. government provides a limited amount of Perkins loan funding to each school. The dispersion of these funds is completely up to the school, as determined by the students they view as being the most in need of the financial aid. Schools combine federal and personal funds to students qualifying for the loan. Unlike other federal loans, Perkins loan borrowers do not have to pay insurance or origination fees.

Qualification requirements for Federal Perkins loans.

Before a student applies for a Perkins loan, there are a few minimum qualifications that must be met.

  • Completion of Free Application for Federal Student Aid (FAFSA) form
  • Must be enrolled in school as at least a half-time student in a degree program
  • U.S. citizenship, eligible non-citizen or permanent residency is required
  • Must maintain satisfactory academic progress
  • Must have no history of previous loan defaults on educational loans or grants
  • Must be registered with selective services

Once a Perkins loan has been awarded for a specific academic year, students will be mail a packet. Included in the packet is a promissory note stating the terms and conditions of the loan and a Statement of Rights And Responsibilities form. Make sure to read the terms carefully before signing and returning the forms for the Business Affairs office. Once accepted for the Perkins loan, loan payments are dispersed on a term-by-term basis through the school's financial aid office and may be paid to the student via check, or a credit to the student's account.

Repayment of Loans

Repayment of Loans
Repayment of Loans | Source

Repayment of your Perkins Loan

Remember that promissory note you signed and returned to the Business Affairs office? That's a legally binding document that states you are agreeing to make payments on the loan in accordance with the terms on the notice. You'll have a 9 month grace period from your graduation before the loan amount will be required to be paid back.

Loan Consolidation

Perkins loans cannot be bought or sold by other lenders, a common practice in the loan business. What private lenders CAN do is provide Student Loan Consolidations, a process in which multiple loans are paid off by the lender. Instead of paying several loan institutions, you make one fixed monthly payment to the consolidator, often at a lower monthly payment over the separate loan accounts. The advantage of consolidation student loans may include lower monthly payments, lower interest rates, and more attractive loan conditions and terms.

Schedule of Repayment Statement

When you graduate from college or leave mid-term (before graduation) or drop below the half-time enrollment status, your account will be placed in repayment status for the Perkins loans borrowed up to that point. You'll receive repayment forms in the mail. One is the Schedule of Repayment Statement (also known as the Truth in Lending Disclosure Statement) while the other is a copy of the Promissory Note of the loan. A signed copy of the Schedule of Repayment Statement must be completed and returned to the Perkins Student Loans.

Defaulting on Loans

Defaulting on Loans
Defaulting on Loans | Source

Defaulting on your Perkins loans

A "default" on a student Federal Perkins loan is where the loan amount goes unpaid for several consecutive months. If payments cannot be made promptly, students must request a deferment, forbearance, or even cancellation. If a payment goes unfulfilled, additional interest and late fees may be added to the payment total. If a student defaults on their Perkins loan, the entire balance may be immediately declared payable. They may be charged all collection fees, interest, late charges, and other fees associated with the default. The loan will be referred to outside collection agencies and reported to the credit bureau organizations. Defaulting on your Federal Perkins loan can instantaneously destroy your credit and cause you to lose all eligibility to qualify for future financial aid loans, including Stafford Loans and Pell Grants.

Making amends from a defaulted loan

If you've defaulted on your Federal Perkins loan, not all hope is lost! You may rehabilitate your loan by entering into a written agreement and making 12 good faith, on-time, monthly payments in an amount determined by your college or university. Once the good faith period has ended and all payments made on time, the Perkins loan may be successfully declared rehabilitated. Once you reach the rehabilitated status, you are once again eligible for Title IV aid under the original terms of your loan contract. Please note that a loan cannot be defaulted and rehabilitated more than one time.

The Federal Government has set-up various financial aid options for students in need of assistance. Like any loan, the responsibility is on the student to ensure the amount borrowed is paid back on time and in full. Consistently paying your loans will ensure that the students of the future will have the same privileges as the students of today through the access of Federal Perkins Loans.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2019 Jason Nicolosi

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)