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What is a federal perkins loan

what is a federal perkins loan

Federal Perkins Loan

Federal Perkins Loan (formerly Perkins Loan Program) is a federally funded program providing long-term low-interest (5%) loans for students who demonstrate financial need. Interest does not accrue on the loan and there is no repayment while the student is enrolled at least half time. Repayment begins nine months following graduation, withdrawal, or enrollment below half-time status. The amount of funds that is available for CSUF students depends upon the repayments of previous CSUF borrowers and an annual federal allocation to the institution.

What is the Annual Loan Amount?

Up to $5,500 for CSUF Undergraduates, Teacher Credential Candidates.

Up to $8,000 for Graduates and Professional Students.

Is there a Cumulative Borrowing Limit?*

$5,500 per academic year for studies toward a bachelor's degree.

$8,000 for any student who has not completed two academic years of undergraduate work.

Grade 1 & 2: $11,000, Grade 3 & 4 $27,500 for a student who has completed an undergraduate degree.

$60,000 for studies towards professional or graduate degrees. The $60,000 includes amounts borrowed for undergraduate study.

*The loan agreement may provide that the total payment to an institution by a borrower be rounded to the next highest whole dollar amount that is a multiple of $5.

What are the Repayment Terms?
  • Repayment begins nine (9) months after the "Federal Perkins Loan Program: Perkins Loan" borrower ceases to be at least a half-time student at this institution or an approved institution of higher education.
  • Ten years is the normal maximum repayment period allowed.
  • Five percent (5) per annum is the interest rate charged on the unpaid principal balance.
  • Forty dollars per month is the minimum repayment for funds received for the first time on or after October 1, 1992.
  • Late fees of up to twenty percent (20 %) of the past due installment will accrue 30 days after each payment due date.
  • Borrower is responsible for all collection agency fees, court costs, attorney fees and other reasonable collection costs incurred in the collection of loans.
  • The precise terms of repayment are specified in the promissory note, which will be provided for you.
Are there Deferments?

Deferments for "Federal Perkins Loan Program: Principal need not be paid and interest will not accrue. All deferments must be received during the period for which they apply.

  • While you are attending an approved institution of higher education as at least a half-time student or as a regular student in a course of study in a graduate fellowship approved by the Secretary.
  • Grad or post-graduate fellowship supported outside the U.S.
  • Enrolled and in attendance in a course of study that is part of a rehabilitation-training program for the disabled.
  • A borrower who is serving on active duty or performing qualifying National Guard duty in connection with a war, military operation, or national emergency.
  • For any period in which you are engaged in service eligible for cancellation.
  • For a period not in excess of three (3) years during which:
    • are seeking and unable to find full-time employment.
    • have any reason that has caused or will cause you to have an economic hardship (to be determined by your institution).
  • An additional six (6) month grace period will be granted after the completion of any period of deferment described above.
  • Borrowers who are members of National Guard or Armed Forces Reserve, and Members of the Armed Forces who are retired status are eligible for thirteen (13) month Period of deferment if they were enrolled at the time of their activation.
Is it possible to Cancel the Loan?

A portion of the loan principal will be cancelled for each full year of service.

  • Full-time teaching in an approved elementary or secondary school serving low-income students.
  • Full-time special education teaching including infants, toddlers, children or youth with disabilities.
  • Full-time teaching in a field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.
  • Full-time professional provider of early intervention services in public or non-profit program under public supervision.
  • Full-time provider or supervision of services to high-risk children from low-income communities and their families.
  • Full-time staff members in a "Head Start" program under the Economic Opportunity Act of 1964 for a full academic year.
  • Full-time teacher of math, foreign languages, bilingual education or other field as authorized by the Secretary.
  • Nurse or medical technicians providing health care services.
  • As a full-time law enforcement officer or corrections officer for service to local, State or Federal law enforcement or correction agencies and attorney employed in Federal Public Defender Organizations or Community Defender Organizations.
  • Military service in an area that qualifies for special pay under Section 310 of Title

    37 of the U.S. Code.

  • Death or total permanent disability of the borrower.
  • In addition to the above provisions, "Federal Perkins Loan Program: Perkins Loan" borrowers are entitled to cancellation up to 70% of their "Federal Perkins Loan Program: Perkins Loan" for service as a volunteer under the Peace Corps or AmeriCorps*VISTA Programs.

Public Service

  • Full time fire fighters with a local state, or Federal fire department or fire district.
  • Full time faculty members at a Tribal College or University.
  • Librarians with a master's degree in library science who are employed in an elementary or secondary school that qualifies for Title I funding, or in a public library that serves a geographic area that includes one or more Title I schools.
  • Full time speech-language Pathologists with a master's degree who are working exclusively with Title I - eligible schools.

Borrowers performing teaching services might be eligible for cancellation credit that can be applied toward payments of loan principal and accrued interest. A teacher is defined as one who is a professional employee of a school or school system working on a full-time basis and is devoted to providing classroom instruction or related services in support of the education program.

Intro to list:

Handicapped Students - Teacher working in classes where the majority of the students are handicapped and in an institution providing elementary or secondary education as determined by state law.

Low Income - Teachers or staff members serving in public or nonprofit private elementary or secondary schools which have a high concentrations of students from low-income families. However, the school in which teaching service is performed must be included in the listing of schools having High Concentration of Students From Low-Income Families, which is published in the Federal Register. (The High Concentrations of Student from Low-Income Families is a document compiled each year by the federal government from lists submitted by the individual states of schools designated by those states to have a high concentration of students from low-income families. Each state, however, is given a quota of schools to be listed and not all schools having high concentration of students from low-income families will be listed. Only those schools listed will be considered for special cancellation benefits.)

  • Teachers in a low-income educational service agency.

Field of Expertise - Teachers in the field of mathematics, science, foreign languages, or bilingual education or in any field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.

Up to 100% of the student loan funds disbursed can be canceled for teaching service performed as detailed above in the following increments:

  • 15% for each of the first two years of teaching service.
  • 20% for both the third and fourth years of such service.
  • 30% for the fifth year of service.

Preschool - Full-time staff member in a preschool program carried under section 222(a)(1) of the Economic Opportunity Act of 1964, as amended, that is operated for a period comparable to a full school year. Employment must be in a full-time professional capacity to complete the educational part of the program; the salary must not exceed the salary of a comparable employee of the local education agency. Funds are eligible for cancellation for 15% of the eligible funds for each year of service.

Are There Provisions for Military Cancellation?

Funds are eligible for cancellation each full year of military service performed in an area of hostility (combat zone) or an area of imminent danger that qualifies for special pay.

What About Forbearance?

Principal only will be deferred for a period not to exceed three years if your annual loan repayment obligation equals or exceeds twenty (20) percent of your gross income.

Can I Make a Payment in Advance?

Excess payments made on your loan apply to the accrued interest and principal of your loan unless you designate it as an advance payment of your next installment.

What is the Minimum Payment?

Federal Perkins Loan at the same or other institutions may be combined for a monthly minimum repayment amount of $40.00 unless the combined loans at $40.00 per month would not repay the loans in ten years.

What is Loan Default?

  • Default is defined as failure to make an installment payment when due or comply with other terms of the promissory note.
  • Defaulting on a loan may result in the account being reported to a credit bureau organization, sent to a collection agency, ineligibility for further financial aid, withdrawal of campus services, suit being brought against you, offset of the debt against State Income Tax Refund, Lottery and your account being turned over to the Federal government for collection.

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