Posted on | May 12, 2012
Federal Perkins Loan or Perkins Loan for short is a type of student loan that provides financial assistance to students who want to pursue post secondary education but lack the financial capacity to do so. This type of federal student loan is said to be the most encompassing in terms of loanable amount, payment period, and interest rate. However in order to qualify for this type of student loan, the same must exhibit actual and urgent financial need. This article will instruct the reader on how to apply for a Perkins loan online.
Source of Funding
As a general rule Federal Perkins Loans have 3 sources of funds. The first is the federal government thru annual appropriations. Second is from the university or college that usually mirrors the funds from the federal government. Third, is the amounts repaid by existing loan holders.
Determining eligibility is easy, just go to the financial aid office of the college and/or university and request for a copy of the same. Eligibility depends on 3 things. First, meeting the minimum requirement sets by the federal government:
- U.S. citizenship
- Valid Social Security Number
- Registration with the Selective Service Program (subject to exceptions)
- Current (not in default) in other federal student loan payments
- Other requirements (i.e. no prior drug conviction, rehabilitation, etc.)
The second requirement is to completely fill out a Free Application For Student Aid (FAFSA) form. This form can be requested from the student aid office or downloaded and/or filled out online. Tip, filling out the FAFSA online is easier since the guidelines are already there and the same will provide warnings for improperly filled out forms. Remember, this form is for free, anybody selling this form is a scammer!
Promissory Note Requirement
The third requirement is filling out the Federal Perkins Loan Master Promissory Note (MPN). This will only be made available after the FAFSA form application has been approved. Remember, there may be other requirements set by the school, college or university.
As a general rule only low income earners and/or their dependents can qualify for a Perkins loan. Those who have sufficient income cannot qualify for the same but may qualify for other federally and/or privately funded student loan programs. The applicant must show a genuine financial need or hardship (i.e. hardship letter, income and expense worksheet, unemployment, etc.). These documents (FAFSA, other docs) will then be reviewed and the loanable amount dependent upon the same. Notification of approval or disapproval will be made thru a letter.
Terms of Payment
A Federal Perkins Loan is payable a few months after graduation. This is in order to provide the consumer with enough time to generate income. Perkins loans provide for a fixed 5% interest payment for the entire duration of the loan. This will only start for so long as the student is enrolled and eligible and subject to the 9 months grace period. Remember there are no other fees collectible from the Federal Perkins Loan program.