There are a number of college student loans available which will
help finance higher education. One of those loans is known as the
Perkins Loan, which is available only to students who demonstrate
financial need. These loans and other student loans must be paid
back but can be forgiven under specific circumstances.
Please note, the federal government is in the process of changing
basic student loans policies, including repayment, student
loan consolidation, interest rates, and borrowing limits. While
this (and other documents on the site) try to be up-to-date, because
of the major changes in the US federal budget, we suggest you refer
to the US Department of Education website for more information of
federal student loans.
College Student Loan: Perkins Loans
Perkins loans are a type of college student loan which has a very
low interest rate, longer than usual grace period, and low minimum
monthly payments when compared to other federal student loans programs.
Perkins loans have a fixed interest rate of 5% while the Stafford
loan programs usually have a variable rate. Repayment begins 9 months,
not 6 months, after graduation so students have longer to secure
a position and to become financially stable. Minimum monthly payments
are only $40, not $50 as they are under the standard and extended
repayment options for other federal loans.
The drawback to the Perkins loans is that they do have lower borrowing
limits. Undergraduates can borrow up to $20,000 for their entire
education but no more than $4,000 per year. Graduate students can
borrow a maximum of $40,000 but no more than $6,000 per year. The
maximum loan amount for graduate students also includes any Perkins
loans they acquired to pay for their undergraduate education. To
learn more about the Perkins loan program, read “Federal
Perkins Loans” from the U. S. Department of Education.
Forgiveness for a College Student Loan
Perkins loans and other federal loans must be repaid under most
circumstances. However, there are some ways to have all or part
of a college student loan forgiven.
The Americorps program is one option. Under this program, students
work full- or part-time for up to one year in different areas of
the United States. Those who complete their time in the program
receive up to $4,725 which can be used to pay for higher education
or to pay off student loans. Visit http://www.americorps.org
to learn more about the program.
The Peace Corps is another option, especially for individuals who
have outstanding Perkins loans. As part of this program, students
go overseas and work to improve the lives of people living in mostly
Third World areas. During Peace Corps service, college student loan
payments are deferred. However, for every year served, 15% of outstanding
Perkins loan debt can be forgiven.
To learn more about the Peace Corps program, visit http://www.peacecorps.gov.
