Financial aid guide for students and parents

Federal Perkins Loan is a kind of low-interest loan for graduate as well as undergraduate students who have extraordinary fiscal need. Perkins loans are offered through financial aid department of school or college. While opting for Perkins loan, your college or school is your financial lender and you must reimburse the loan to your college in stipulated period of time. Your college may pay you in the form of check (cheque) or it may deduct the amount from your academic fees. A candidate may obtain the loan in two installments during his academic year.

Federal Perkins Loan is designed by the American Department of Education to help college students of US in financing their education. The loan plan is named after one of the former member of US House of Representative, Carl D. Perkins. Perkins loan offers maximum amount of $60,000 for graduate students and $27,500 for undergraduate students. Interest rates of Federal Perkins loan are capped at 5 percent for the repayment period of ten years and an undergraduate student can only borrow maximum $5,500 of loan per year. The amount of loan a candidate is eligible for actually depends on his financial need, amount of financial aid taken before and fund availability at school.

Perkin loan plan provides grace period of nine months to the borrowers, which gives an opportunity to a student to make their repayment from tenth month after graduating. As Federal Perkins Loan is funded by government, the interest rate accrual begins only when a candidate start repaying his loan. A borrower doesn’t need to pay any other charges than interest in Federal Perkins loan. However, if he skips the payment or doesn’t make complete installments in stipulated time span then he might have to bear collection cost as well as partial loan default charges.

The greatest advantage of a Federal Perkins loan is that it is incorporated in the federal direct consolidation loan scheme, which facilitates dealing with the lending process much easier. To repay student loan after graduating is one of the big concerns for bachelor students.

Proper planning and forethought can surely reduce the burden of student loan to a significant extent.