What is a Federal Perkins Loan?
A Federal Perkins Loan is a low-interest (5 percent) loan for undergraduate and graduate students with exceptional 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.
How much can I borrow?
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 loan 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 student is $40,000, including any Federal Perkins Loans you borrowed as an undergraduate.
- $400 to $2,000 for each year is the amount you can borrow at Trade Tech because of limited funding. Trade Tech College can only make new loans based on monthly collections of prior loans.
How do I apply for a Perkins Loan at Trade Tech?
You must file a Request for a Perkins Loan form in the Financial Aid Office after you receive your financial aid award letter from the school. Because of limited funding, the school has established a policy for Perkins Loans as follows:
- Applicants must be in a program of study for at least two (2) semesters before the first loan is requested.
- A second loan can be issued to students after accumulation of at least 24 semester units.
- Applicants must meet all academic satisfactory progress standards.
- Applicants must demonstrate through documentation that they have extraordinary expenses above and beyond normal college expenses.
- Applicants must be enrolled in at least six (6) units throughout the loan period.
Other than interest, is there any charge to get these loans?
No, you're not charged any fees to take out the loan. You pay no interest on your loan as long as you are enrolled at least half time (6 units). But, if you don't make loan payments on time, you might have to pay a late charge. If you keep missing payments, you might have to pay collection costs as well.
How will I be paid?
Generally, you will receive the first half of your loan in the form of a check during the fall semester after an entrance interview explaining your rights and responsibilities as a borrower. You will receive the second half of your loan during the spring semester after an exit interview.
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, you may cancel all or a part of your loan if you tell your school by the first day of the payment period. The payment periods are the fall and spring semesters. You may also cancel your loan at any time by returning the un-cashed check to the Financial Aid Office. You may also pay the loan in full at any time without a penalty.
When do I pay back this loan?
You must begin repaying your loan nine months after you graduate, leave school, or enroll less than half time. Depending on how much you borrow, you may have up to 10 years to repay.
How much will I have to repay each month?
Your monthly payment amount will depend on the total amount you borrowed and the length of your repayment period. Generally, your payments for a Trade Tech Perkins Loan will be $120 per quarter or $40 per month as long as the amount you borrow is below $4,000.
Are there any tax credits available for paying back these loans?
Yes, there is a deduction for student loan interest for certain borrowers. The maximum deduction is $2,500 a year. You can find out more by calling the IRS at 1-800-829-1040 or on their web site.
Is it ever possible to postpone repayment of my Federal Perkins Loan?
Yes, under certain conditions, you can receive a "deferment" or forbearance" on your loan as long as the loan isn't in default. Deferment and forbearance are not automatic. For a Trade Tech Perkins Loan, you must apply for one or the other through the Central Loan Administration Unit at 1-800-822-5222.
During forebearance, you're allowed to temporarily postpone payments, and no interest accrues (accumulates).
If you are not eligible for a deferment and cannot make your loan payments, you may request forbearance. During forbearance your payments may be postponed or reduced, or your repayment period might be extended. Interest continues to accrue, however, and you're responsible for paying it.
Is it ever possible to have my Federal Perkins Loan canceled?
Yes. Federal Perkins Loans can be canceled if the borrower dies or becomes totally and permanently disabled. A loan can also be cancelled under certain other conditions. More information on cancellation and deferment options is available from the Central Financial Aid Loan unit at 1-800-822-5222 and at www.studentaid.ed.gov.
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