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Our Best Tips for the Federal Perkins Loan for Students

1 master promissory noteToday education has become one very important and inseparable aspect of life.

With the value of education and educated people getting higher and higher both in the social and financial arena, more and more people have taken up this aspect in a very devoted way.


Mere interest to pursue higher studies is not adequate to emerge as a successful graduate or postgraduate.

Money plays a very important role in realizing this dream. Many people find it hard to accommodate their desires with the available economy of theirs, leading to dropouts at various levels of education.


It is to bridge this financial gap that the government has come up with various scholarships, grants and federal loans to support the education of the youth.


It is the students or their parents who are in the position to choose the best-suited education assistance program that would support them through out their education. It is also up to the student to choose the best-suited repayment plan to pay off their education debts.



According to the expert’s point of view, the normal procedure and the resources to be used, when it comes to college payments are:


  • Firstly, use available scholarships, grants and the like that comes to you free of cost.
  • Next go in for federal loans that will reduce the load of higher interests.
  • Finally if you still require extra funds, you can opt for a private loan.



Federal loans are those, which are disbursed by the government as financial aid and education assistance programs for students in the U.S. They often come with a reduced rate of interest and a whole lot of add-on features beneficial to students.


There are two federal student loan programs: The Perkins Loan Program and the Direct Loan Program. For availing these federal student loans, an individual has to file an application named Free Application for Federal Student Aid (FAFSA). The Perkins Loan is the most sought after loan by most of the students for the various benefits it offers to the borrower.



1 federal perkins loan paymentA federal Perkins Loan remains to be the most wanted loan in the federal loan category, subject to your eligibility for availing the loan.

In this case the lender will be the school that you attend. This financial aid by the government is provided to students who are really in need of financial support for pursuing their education.

The affordability factor by the student plays a major role in being eligible for the loan. The poorer the affordability ratio, the better are the chances of the student becoming eligible for Perkin’s loan.

Reasons Why Perkin’s Loan is most sought after:

  • Interest rate is fixed at 5% for the whole term of the loan.
  • It is a subsidized loan, so your interest is paid while you’re in school
  • No processing fee for the loan, hence you get the whole loan amount without any reductions.


A Federal Perkins Loan is offered as a 5% fixed interest rate loan for undergraduate and graduate students with exceptional financial need. Due to its long list of benefits such as low interest rate, selection process and liberal cancellation plans, it remains to be the most favorite and reasonable financial aid program for students in the graduate sector.


A student should satisfy the following conditions to be eligible for the Federal Perkins Loans:

  • The applicant should be enrolled in an eligible school at least as a half-time student for a degree program.
  • The applicant should either be a US citizen, a permanent resident, or should possess an authorized non-citizen status.
  • The Applicant should illustrate adequate academic progress.
  • The applicant should make sure that he has no unsettled defaults or over payments due according to the Title IV of education loans and grants.
  • The applicant should satisfy all the requirements as may be laid down by the selection committee.

If an applicant successfully meets all the eligibility criteria, his financial need is then analyzes by the Department of Education – U.S, with the various details provided in the FAFSA.

The Major Factors that can influence an applicant’s eligibility to Perkin’s Loan are:

  • Income & assets of the Applicant
  • Income & assets of the Applicant’s Parents
  • Size of the family.
  • Number of family members attending postsecondary institutions


Calculation of EFC:

The Department of Education decidesthe applicant’sEFC (expected family contribution), which is the amount that the applicant is expected to contribute towards the education.

The EFC is calculated as follows:


EFC = A portion of net income (income after deducting basic living expenses) + A portion of net assets (assets after deducting asset protection allowance)


Benefits Under Perkin’s Loan:

The maximum amount that is offered based on the EFC formula:

S. No

Schooling Type

Benefit per Year

Total benefit

(For Entire Term)

1 Undergraduates $5500 $27500
2 Graduates/Professionals $8000 $60000
3 Non Undergraduates &

Non Graduates/Professional



How to Apply for Federal Perkins Loan?

Like all other federal loans, to apply for federal Perkins Loan, one has to simply filling and submitting the FAFSA. However, along with your FAFSA, the applicant is required to submit a promissory note.


Now Let’s see what is this Master promissory note (MPN)?

The Master Promissory Note (MPN) is a legal binding document that makes sure that the borrower repays the loan(s) along with accrued interest if any to the U.S. Department of Education. It also illustrates the basic terms and conditions of the loan(s).

A Single MPN can be used to borrow additional Direct Loans for up to 10 years. Subject to your school’s approval.

Once started, the entire MPN procedure should be completed in a single session, which usually takes around half-an-hour.

Requisites to complete the MPN:

  • The Federal Student Aid ID of the applicant, which is seen on your FAFSA.
  • The full name, social security number and date of birth of the applicant.
  • The names, addresses, and telephone numbers of the next of kin and two references ahs to be provided. This reference information is for security purposes that might be used by the ECSI under circumstances that they are unable to locate the applicant after graduation.

The applicant is to sign the Perkins MPN electronically through a third-party vendor called ECSI.

Federal Perkins Loan Payment

As far as Federal Perkin’s Loan is considered, the school that the applicant attends is the lender and pays the loan either to the applicant or uses the loan to the applicant’s school expenses.

In this loan type, the interest does not get accrued while the applicant is in school, so there is nothing much that the applicant has to worry about.

Federal Perkins loan repayment

Exit Interview

1 apply for federal perkins loanThe governing bodies necessitate that the borrowers complete the exit counseling for loans received through the Federal Perkins Loan Program. During the exit interview, the borrowers will be given a brief about the following information:

  • Total amount received as loan from Federal Perkin’s Loan program
  • Total interest charges that the borrower has to pay based on the repayment schedule and tenure.
  • Date repayment begins after the grace period.
  • Various strategies to manage debt.
  • Options to pre-payment or pre-closure of the loan.
  • Loan forgiveness and cancellation.
  • Forbearance and deferment and
  • The penalties and consequences related in case of non-payment of the loan availed.


Grace Period:

If you are a half-time student then you have a grace period of 9 months before you start repaying your Perkins Loans, which means you start your repayment in the tenth month from graduation or if you happen to withdraw from college. However you may be entitled to an extended grace period if you are on active service with the military or if you re-join in school to pursue your education.


Not able to repay the Loan?

If you cannot pay back for any reason, consider asking for cancellation, deferment or forbearance.

For becoming eligible for various options, the borrower has to fulfill certain conditions as laid down by the governing bodies:

Cancellation of a Federal Perkins Loan

The loan that you have availed of gets canceled on the event of any of the following occurrences:

  • If the school you are attending closes down and you are not in a position to transfer the enrollment to a different school.
  • If the student for whom the loan was availed for, dies.
  • If the student becomes permanently disabled.
  • If the student becomes a full-time fire fighter, a law enforcement or corrections officer, or an attorney in a nonprofit organization.
  • If the student is on active service in the military.
  • If the student becomes a full-time nurse or medical technician.
  • If the student becomes a full-time faculty member at a Tribal college or university.
  • If the student happens to be a teacher in a low-income school or services in an area where there is a scarcity for teachers.
  • If the student becomes a volunteer with Peace Corps.


Deferment of a federal Perkin’s Loan:

A deferment is referred to as a period during which the repayment of the principal and interest of your loan is provisionally postponed.


During this deferment period, the borrower is not required to make the payments and in case of Federal Perkin’s loan, the government pays the interest during the deferment period.

When can a student apply for deferment?

  • When a student is enrolled at least in a half-time college or career school.
  • When a student is enrolled in an approved graduate fellowship program or in an approved rehabilitation-training program for the disabled.
  • If a student is unemployment or is unable to find a full-time employment.
  • During a period when the student has applied for Perkins Loan discharge/cancellation
  • During active duty military service during a war, military operation, or national emergency.
  • During the 13 months after the termination of active duty military service or until the student re-joins in to a school or university at least on a half-time basis, whichever is earlier.


Forbearance under Perkin’s Loan program:

If a student doesn’t get eligible for deferment, then he can go in for the option of forbearance. Here the loan servicer might grant the student forbearance. As per the option of forbearance, the student may stop making payments up to 12 months.

There are two types of forbearances:

  • Discretionary Forbearance
  • Mandatory Forbearance


Discretionary Forbearance

Under the discretionary forbearances, the lender, who happens to be the school in case of a Perkin’s Loan, has the choice of granting forbearance or not.

A discretionary forbearance may be requested for the following reasons:

  • Financial difficulty
  • Illness


Mandatory Forbearance

A mandatory forbearance might be requested for the following reasons:

  • If the student is serving in a medical or dental internship or residency program.
  • The total amount that the student owes per month for all the student loans consolidated together is equal to or more than 20 percent of his total monthly gross income.
  • If the student happens to be a receiver of national service award for serving in a national service position.
  • If the student has chosen the teaching profession and is qualified under the teacher loan forgiveness program.
  • If the student qualifies for partial repayment of loans under the U.S. Department of Defense Student Loan Repayment Program.
  • If a student is a member of the National Guard and have been actuated by a governor, even though he is not eligible for a military deferment.


The Federal Perkin’s Loan is a loan, which comes with strict selection procedures and this is due to the fact the loan is hoarded with multiple benefits. Some of the matchless benefits offered exclusively under Federal Perkin’s Loan are:

  • A grace period of 9 month if been offered to the borrowers which is definitely higher than the 6 month grace period as in most other cases.
  • Loan cancellation option is available to students who take up jobs as mentioned in the pre-approved list.
  • The Fixed interest rate of 5% proves to be icing on the cake, which attracts a lot of students towards this loan program.

Final Tips — Submit Your FAFSA Early

The Perkin’s loan follows various measures to determine the eligible applicants; however there are a lot of students applying for this loan and the loans are disbursed by their schools according to the funds allocated to them.

The early submission of FAFSA will make sure that you can be considered for loans first, and therefore get the maximum amount you are eligible for. Basically the Perkin’s Loan follows the First Come First Serve model.

What more do you want? Financial hardship is no more a barrier to education. Apply for Federal Perkin’s Loan by filling a FAFSA and enjoy the unmatched benefits under this wonderful financial aid programs.

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