Federal Perkins Loans

Posted on March 27, 2019 by

To be eligible for a Federal Perkins Loan, students need to submit a FAFSA (Free Application for Federal Student Aid) and await the school they’ve applied to’s decision. Federal Perkins Loans are provided to a school at a specific level by the U.S. Department of Education. The following video is helpful to understand how it works:

If students qualify for a Federal Perkins Loan, their school will be contributing some of the funds, together with the funds that they’ll be receiving from the U.S. Department of Education to support you with paying for the cost of tuition.

Do you have to apply for a Federal Perkins Loan?
The decision whether you qualify for a Federal Perkins Loan is based upon criteria formulated in your application, your FAFSA. The Department of Education is using a specific formula to determine students Expected Family Contributions (EFC) and decide about whether students qualify or not.

Here are a few benefits and features of receiving a Federal Perkins Loan:

  • Federal Perkins Loans have a longer period of grace for students before the process of loan repayment starts.
  • Loans are paid to the school directly. There is no role for outside lenders.
  • Federal Perkins Loans have a fixed 5% interest rate over a repayment period of 10 years.
  • A Federal Perkins Loan is government-subsidized. There will be no Interest-accruement until the time of repayment starts.

Similar to a Federal Stafford Loan, students who receive Federal Perkins Loans will need to sign an MPN (master promissory note) before they will be able to get the loan. A Federal Perkins Loan has a yearly limitation (2019) of $5,500 for an undergraduate student and $8,000 for a graduate student.

A Federal Perkins Loan is only awarded to students who can demonstrate financial need and is offering highly flexible and affordable solutions to students. To receive a Federal Perkins Loan, students need to maintain a few strict standards. To give you an example, to qualify for the Perkins Loan program, students may not have a bad history regarding previous educational loans ever and they are required to maintain acceptable GPAs while being in the Perkins Loans program.

Student Loans Debt Consolidation Explained

What is student loans debt consolidation?

Student loans debt consolidation bundles all of your existing student loans into one, new consolidation loan. Usually, in doing so, student loans debt consolidation lowers your interest rates and monthly payment. Well, the borrower is the slave to the lender, right? After consolidating, you make one payment to one creditor each month instead of many.

How do I apply for student loans debt consolidation?

You can apply for free for student loans debt consolidation by checking out the internet. If you find a trustworthy site, you usually click “start now” on that site. This will usually take you to a short online application. But watch out: the student is the debt slave and they know it! You do not need to know the details of your student loan portfolio to fill out the application. If you submit your application, a student loans debt consolidation representatives will contact you to proceed with the process.

How long can I extend my repayment term?

If you are struggling to make your monthly payments now, extending your repayment term might be a good idea to reduce your payment burden in the short-term. Depending on the balance on your student loans, you can use student loans debt consolidation to extend repayment to up to 30 years. It’s pretty difficult to avoid student loans and for those with $20,000-$39,999 in outstanding education debt, you may extend your term to up to 20 years.

For those with $40,000-$59,999, you may extend your term up to 25 years. Those with $60,000 in debt and over can extend to 30 years. Remember that there are no prepayment penalties on consolidation loans, so you can always accelerate your payment schedule if you wish. See also this post about Federal PLUS Loans.

Who qualifies for student loans debt consolidation?

The ideal candidate for student loans debt consolidation will no longer be enrolled in school half-time (have graduated or dropped out), will have never consolidated before, will be in a repayment or grace period on his/her loans, and will have at least $5,000 in student loan debt. Remember that you must have federal loans to qualify for federal student loans debt consolidation. Otherwise, you might consider private student loans debt consolidation. Parents and graduate students may also take advantage of student loans debt consolidation if they have eligible student/parent education loans.

Why should I consider student loans debt consolidation?

Student loans debt consolidation can help you save money but please be careful and evaluate debt-relief programs very well. You can lock in a low, fixed interest rate for the life of the loan, reduce your monthly payments, extend your repayment term, and reduce your hassle by combining your loans into one easy monthly payment. Student loans debt consolidation can also help you improve your credit score by reducing your debt-to-income ratio. With the money you save from student loans debt consolidation, you can pay off expensive, high-interest credit card debt or make other valuable investments.