Federal Perkins Loans

Posted By: Dr. Frugal in Loans on 06/12/2007 at 10:18:31

Most students need several different types of financial aid to pay for their education. Stafford loans simply are not enough to cover rising educational costs. Perkins loans are sometimes available for the right applicants.

The college or university decides on the amount of the loan, up to $2k per semester ($4k annually) for undergraduate students, up to $20k if you've completed two or more years of undergraduate study. Graduate students can borrow a maximum of $6k for each year of study up to $40k INCLUDING any undergraduate Perkins loans. Although these are the maximum amounts allowed by law, actual awards are typically less because schools try to use the limited funds they have to aid as many eligible students as possible.

The interest rates for these loans are fixed at 5% for the life of the loan. You have ten years to pay it back. These loans do not accrue interest while you're in school as long as you are enrolled for at least half-time. Additionally, after you graduate you have a nine month grace period before the loans go into repayment. These payments are made as soon as the grace period ends and are made directly to the college or university.

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