Perkins Student Loan

By: EconomyWatch Content   Date: 25 November 2009

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Perkins Student Loan is a US government federal loan given to students who are in need of funds to attend college. This low-interest student loan is offered by the US Department of Education to help students cover the costs of graduate and undergraduate programs. Named on Carl D. Perkins, a former member of the United States House of Representatives who helped establish this program, this program was established in 1965.

Perkins Student Loan – Eligibility 

A student’s Expected Family Contribution (EFC) should show greatest levels of financial requirements so that he qualifies for the Perkins Student Loan. The EFC is determined by the government’s FAFSA (Free Application for Federal Student Aid). Apart from this, the student must: 

  • Be a Citizen of the United States

  • Show exceptional financial requirements

  • Have a high school diploma pass an approved ABT (Ability-To-Benefit Test) or GED (General Educational Development)

  • Registered with the Selective Services if the student is a male between 18 and 25 years of age

  • Maintain satisfactory academic progress 

Federal Pell Grants recipients have priority in getting Perkins loans.  

Perkins Student Loan – Interest Subsidy 

Perkins Student Loans are subsidized by the US Federal Government. That means when the loan is in deferment period, the federal government pays the interest helping students save the interest charges. For example, if a student takes $4000 loan for the first year at 5% interest rate over four years, the second loan for three years, the third loan for two years and the fourth loan for one year, the amount saved on interest will be around $2000.

It is better to take the full amount of the Perkins Student Loan you are eligible for if offered one. The upper limit is $4000 a year. With a very low interest of 5% per year, no other student loans can compete with it. You should also apply for loans such as subsidized and unsubsidized Stafford loan since the Perkins Loan will not be able to cover all your financial requirements. If you still fall short of funds, consider taking a private or an alternative loan.


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