Federal Perkins student loans are available at a fixed and low interest(5%) rate to undergraduate, graduate and profesional students. The interest rate does not vary annually unlike the Stafford loan. The loan is given to students with great financial need. The loan application is made at the school financial aid office and the school's financial aid officer/administrator has a great say in how much money is to be given to the student that qualifies for the loan. One benefit of the Perkins loans for part-time students with bad credit are available for students who attend school less that half-time unlike the Stafford loan. Loan disbursment and repayment The money is loaned through the school unlike the Stafford loan where money is obtained from a private lender or directly through the US department of Education at participating schools. Money each school has for the Perkins loans is funded by the government . The school pays the money to the student usually either by preparing a cheque in the student's name or by paying for the school related expenses directly. The money is usually directly divided into at least two payments. The loan is payed back to the school or its agent and the repayment period is up to 10 years for the Perkins loan.
Loan limits for Perkins loans Loan limits refer to the maximum amount or money that can be loaned to a student. undergraduate students can obtain a maximum of $ 4000 in loans per year. Gradate and professional students have a loan limit of $8000 per year. It is important for graduate and professional students to note that the total maximum amount of money that can be borrowed is $60,000 and the amount of money borrowed as an undergraduate will be included in this amount.
How financial need is determined Each student files the FAFSA , information from this is used to calculate your expected family contribution.This is calculated from a standard formula by the financial aid officer. The lower the EFC the greater the financial need of the student. The EFC takes into consideration the percentage of net income and asset protection allowance. The percentage of net income is the income which remains when the allowance for basic living expenses is subtracted from the income(if the student is dependent then this refers to the parents income but if independent this will refer to the student's income). The percentage of net assets refers to the assets which are left after subtracting an asset protection allowance. The EFC is sent in the Student Aid report which the student receives or from the Institutional Student Record which the institute receives.
Loan Cancellation -Student with bad credit should also consider ways they can qualify for partial or full loan cancellation provided the students in certain instances. Loan cancellation can be obtained fi he/she serves full time as a teacher at a school which serves low-income familes, one who serves as a special education techer or one who teaches a subject deemed by the state as having a shortage of teachers . Also if the student serves in the military or performs volunteer work. Perkins loans taken by students to cover expenses for their law or medical degrees can qualify for cancellation. Law students can qualify they work for legal aid or non-proft organizations. The medical students can qualify when they work in certain areas. When the loan is cancelled the school is reimbursed by the government .
