About Perkins Loans
The Perkins loan program was created by the U.S. Government to help low-income students finance their college educations with low-interest loans. According to the Student Aid Alliance, almost $30 billion in loans have been made available to students since the program began in 1958. The loan program is just one of many financial aid options available to help college students cope with the rising cost of higher education.
History
The Perkins Loan Program was established in 1958 after the passage of the National Defense Education Act. The program was originally called the National Defense Student Loan Program before it was renamed in honor of Carl D. Perkins, a former member of Congress. It was the first federal financial aid program specifically for disadvantaged, low-income students. The program has risen in popularity over the years along with tuition costs. A study commissioned by the National Center for Public Policy found that college tuition costs have increased 439% since 1982. Today, nearly 500,000 students receive Perkins loans each year, according to the Student Aid Alliance.
Benefits
Eligible undergraduate students can receive up to $4,000 a year, but the average loan amount is $2,166 per student, according to surveys conducted by the Student Aid Alliance. Graduate students can receive up to $6,000. The interest rate on Perkins loans is 5%, which is much lower than the majority of private student loans that base their rates on credit history. There are no fees for receiving a Perkins loan and you will not need to start repaying the loan until nine months after graduation. Best of all, your loans can be forgiven if you pursue a career in public service, such as teaching or law enforcement. Your college will determine if you qualify for loan forgiveness.
Requirements
To receive a Perkins loan, you must demonstrate financial need. The definition of financial need varies greatly, but loan recipients typically come from low-income families. The Student Aid Alliance has found that almost 75% of loan recipients had a combined family income less than $60,000 per year. In addition, you must maintain good grades and be enrolled at least part-time in a college or university. Perkins loans are available for both graduate and undergraduate students.
Apply
The first step in applying for a Perkins loan is to fill out the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov. The deadline is March 15 of each year. You will need to include your educational history and your family's financial information and income. Also enter the numerical code assigned to your college or university that you can find on the FAFSA website. After your application is submitted, the government will send a copy of your Student Aid Report to you and your college. This report details your expected family contribution, the amount your family should expect to pay for your education. Your college will use this information to determine your eligibility. If you are approved for a loan, you will receive an acceptance letter from your college or university.
Future
The future of the Perkins loan program is uncertain because of repeated efforts to cut the program at the federal level. President George W. Bush attempted to completely cut funding for the Perkins program in his 2006 budget, although funding was later approved by Congress. If you care about the future of Perkins loans, the Student Aid Alliance encourages you to contact your Congressional representatives and urge them to support the program.
Tags: Student Alliance, Perkins loan, college university, students receive, college will, each year, financial need