July 3, 2009, Newsletter Issue #126: Change Your Mind About Your Perkins Loan?

Tip of the Week

Sometimes you may receive other forms of college funding after you have already been approved for a loan. Now you would rather cancel the loan so you do not have to pay it back with interest later. With the Federal Perkins Loan Program that is not a problem.

Even if you have signed the promissory note agreeing to the terms and conditions of the loan, you still have options. When crediting your account with funds from a Perkins Loan, the school is required by law to provide you with written notice. This must be given to you within the 30 days prior to and after the loan disbursement.

Once you have received this notice, you have either 14 days from the date it was mailed or until the first day of the payment period to return it to your school and reject the loan. The school will notify you of the first day of the payment period.

If the funds are not sent to the school, but rather sent to you by check, the answer is simple. All you have to do to refuse the loan is return the check in the mail. As long as you take these steps within the required time frame you are not locked into anything.

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