Perkins Loan
Perkins Loan The Perkins Loan is awarded to undergraduate and graduate students with incomparable financial need. This loan is a campus-based program, with the school acting as the lender using a limited amount of funds provided by the federal government. (The Perkins Loan is the best student loan available. It is a subsidized loan, with the interest being paid by the federal government during the in-school and 9-month grace periods. There are no origination or guarantee fees, and the interest rate is 5%. There is also a 10-year repayment period.
The amount of Perkins Loan you obtain is determined by your school's financial aid department. The program limitations are $4,000 per year for undergraduate students and $6,000 per year for graduate students, with cumulative limits of $20,000 for undergraduate loans and $40,000 for undergraduate and graduate loans total.
Institutions participating in the Expanded Lending Option (ELO) may offer higher loan amounts for the Perkins Loan. To participate in the ELO, a school must have a default interest rate no higher than 15%. The annual loan limits are increased by $1,000 each and the cumulative limits increased by $5,000 and $10,000.
Another advantage of the Perkins Loan is that it offers better cancellation provisions than the Stafford or PLUS loans.
