Perkins Loan Interest Rate
Have Questions About Perkins Loan Interest?
You may have a few questions about the Perkins loan program, specifically regarding Perkins loan interest. As with all federal programs, the Perkins loan program is desirable because it offers lower interest rates and guaranteed funds for qualifying students. Furthermore, the United States government subsidizes the Perkins loan. What is the significance of a subsidized loan?
That means that interest does not begin to accrue until the borrower starts to repay the principal of the loan. In essence, the United States government covers that interest for you. The interest will start accruing shortly after graduation or until the student leaves college or falls short of his or her half-time student status.
What should you know about Perkins loan interest? Not only is Perkins loan interest relatively low since the federal government has set a standard of 5% fixed interest for the rest of the ten-year repayment period; the plan also has a 9-month grace period of deferred interest. That means that the borrowers start repaying the loan in tenth month upon graduation or leaving college.
How much can you expect to get from a Perkins loan? The loan limits for undergraduates amounts amount to $4,000 per year with a lifetime maximum loan of $20,000. For students that graduate, the limit is extended to $6,000 per year with a lifetime limit of $40,000.
What do you have to do to qualify for Perkins loan and interest rates as low as 5%? The qualifications state that all qualifying students must have legitimate U.S. citizenship, permanent residency or be of eligible non-citizen status. He or she must be enrolled in a participating school at least halftime in a degree program. The student must deliver a satisfactory academic progress and must meet all Selective Service requirements. Finally, there must not be a history of any previously unpaid education loans or grants. That means that students are not evaluated on creditworthiness, which is the primary concern of most commercial lenders.
In order to get a loan for this subsidized program, however, you must prove that you have financial need of this provision. The U.S. Department of Education provides a fixed amount of funding to every participating school. Therefore, it will be the school, that you are enrolled in or plan to enroll in, that will ultimately determine which students have the greatest needs. In order to get started with this arrangement you must submit a Free Application for Federal Student Aid form.