Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Perkins Loans and other Student Loan topics.
The Federal Perkins Loan program provides low-interest loans to help students with financial need pay for college expenses. The interest rate is set at 5.00%. Your Expected Family Contribution (EFC) is determined after filing your Free Application for Federal Student Aid (FAFSA). From there your school will decide the amount that each student is awarded in the form of a Perkins Loan.
There are three sources of money for these loans. Part of the money comes from the federal government. The school then contributes an amount equal to at least one-third of that federal contribution. The remainder of the funds comes from loan collections at the school level from previous years.
An undergraduate student may borrow up to $4,000 each year for a cumulative total of $20,000 throughout college. There are over 1,800 schools that participate in the Federal Perkins Loan program. There are no other charges or fees for the Perkins Loan. The school financial aid office will either disburse the money to you, typically in the form of a check or a credit to your school account, or apply it directly to your school costs.
|Jennifer Mathes, Ph.D.|