Federal student loans are loans where money is lent by the U.S. government to students to attend college. They can either be subsidized or unsubsidized. One of the subsidized loans was the Perkins Loan—a program that began in 1958 but ended in 2017.

If you still have a Perkins Loan, he▨re is what you need to know.

What Was a Perkins Loan?

Offered through the federal government’s Perkins Loan Program, a Perkins Loan was a low-interest loan option made available to both undergraduate and graduate students who demons൲trated an exceptional need for financial aid.

The program was started in 1958. Eligibility was determined based on information provided by the student on the 澳洲幸运5官方开奖结果体彩网:Free Application for Fed꧂eral Student Ai✃d (FAFSA) form, and loans were granted directly from the school’s financial aid office. This means that the school was the lender, with the government acting as the subsidizing body. Interest payments weꦏre made by the government while the borroꦡwer was in school.

About 500,000 loans were granted to students before the program expired on Sept. 30, 2017. Final disbursements were made on June 30, 2018. The program was replaced by subsidized 澳洲幸运5官方开奖结果体彩网:federal direct loans.

Repaying Your Perkins Loan

If you are still in school and attending at least half-time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin 澳洲幸运5官方开奖结果体彩网:repayment. If you are attending less than half-time, the U.S. 𒉰Departmen🦹t of Education suggests checking with your school to find out the length of your grace period.

Perkins Loans must typically be repaid in full within 10 years following the completion of the nine-month grace period. Students typically repay the loan directly to their school or to a designated 澳洲幸运5官方开奖结果体彩网:loan servicer.

When it comes time to repay your Perkins Loan, you may also have a number of other options. Your school’s financial aid office or your 澳洲幸运5官方开奖结果体彩网:loan servicing company can explain the options available in your case.

Perkins Loan Repayment Options

Deferment or Forbearance

If you’re unable to start payments after the nine-month grace period, you can apply for 澳洲幸运5官方开奖结果体彩网:deferment or 澳洲幸运5官方开奖结果体彩网:forbearance to postpone repayment. If you have a Perkins Loan from a previous school that’s coming due—and you are still attending school at least half-time—you could be eligible for an in-school deferment.

Cancellation

If you work in a public service job, you may be eligible to have all or a portion of your Perkins Loan debt canceled after a certain period of time. Jobs that qualify include teaching, nursing, firefighting, and others.

Discharge

Your loan may also be discharged under certain circumstances. These may include personal 澳洲幸运5官方开奖结果体彩网:bankruptcy, total disability, or death. You may also qualify for a 澳洲幸运5官方开奖结果体彩网:discharge if your school shuts its doors.

Income-Driven Repayment (IDR)

Perkins Loans can be eligible for repayments adjusted to suit your income level, but only if you consolidate them into a federal direct consolidation loan. The Department of Education cautions that if you have federal Perkins Loans and are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you should not include your Perkins Loans when you consolidate.

If you do choose to consolidate, there are four income-driven repayment (IDR) plans, which differ slightly ღin their det🍒ails:

• Saving on a Valuable Education (SAVE): Under this plan, your payments generally amount to 5% of your 澳洲幸运5官方开奖结果体彩网:discretionary income and are due over a period of 20 years for undergraduate loans and 25 years for graduate school loans. The Biden administration launched the 澳洲幸运5官方开奖结果体彩网:Saving on a Valuable Education🦹 (SAVE) plan in August 2023. Under the SAVE plan, payments won't be more than 5% of discretionary income, and after 10 years of payments, loan balances will be forgiven if the original loan was less than $12,000. Borrowers enrolled in the Revised Pay as You Earn (REPAYE) plan were automatically switched to the SAVE plan once it was available in 2023.
  

• Pay as You Earn (PAYE) Repayment: Again, payments are usually 10% of your discretionary income but only up to your 10-year Standard Repayment Plan amount. This generally lasts for 20 years.
• Income-Based Repayment (IBR): Payments are either 10% or 15% of your discretionary income and should not exceed your 10-year Standard Repayment Plan amount. The percentage depends on when you received the direct loan, as does the length of time you are required to make payments, which can be either 20 or 25 years.
• Income-Contingent Repayment (ICR): With this option, your payments will be the lesser of 20% of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted for your income. The repayment period with an ICR plan is 25 years.

With all four income-driven repayment plans, any remaining loan balance is forgiven once you’ve made the required payments for the required number of years. You can consolidate your federal loans and learn more about the process by using the onไ the Department of Education’s Federal Student Aid website.

Other Sources of Student Loans

Although the federal government canceled the Perkins Loans Program, it still offers other student loans for those who demonstrate a need for 澳洲幸运5官方开奖结果体彩网:financial aid. Some of these include:

Direct Subsidized Loans

Like Perkins Loans, direct subsidized loans are intended for students in significant financial ﷺneed. The amount of the loan is determined by your school and cannot exceed that limit.

The term “subsidized” refers to the fact that the Department of Education covers the 澳洲幸运5官方开奖结果体彩网:interest payments while you are still in school, just like the Perkins program. But there’s one caveat: Direct subsidized loans are available only to undergraduate students.

Direct Unsubsidized Loans

These loans are available to undergraduate and graduate students regardless of financial needඣ. Just like direct loans, the amount of your unsubsidized loan is determined by your school.

But here’s the di🌱fference between sub💞sidized and unsubsidized loans: You are responsible for making interest payments even while you’re in school. Any interest that is not paid while you are in school or during the grace period after graduation is 澳洲幸运5官方开奖结果体彩网:capitalized, which means it’s added to your 澳洲幸运5官方开奖结果体彩网:principal balance.

Direct PLUS Loans

This program is intended to act as financial aid for undergraduate, graduate, and professional students. Unlike the other two pro🌄grams, the borrower is the student’s parent in the case of undergraduate students.

Students must be enrolled at least half-time for a PLUS (Parent Loa🌠n for Undergraduate Students) loan. Money goes to the school to cover education-related expenses before any remaining funds are disbursed to the borrower.

Applying for Direct Student Loans

To apply for these direct loans, students and their parents must fill out the FAFSA form. Based on the information you supply, the FAFSA will determine your 澳洲幸运5官方开奖结果体彩网:Expected Family Contribution (EFC) toward college or career school.

The schools use your EFC to decide how much federal aid to offer you. They do that by subtracting your EFC from their 澳洲幸运5官方开奖结果体彩网:cost of attendance (COA), a number that includes tuition, room and board, fees, and related expenses.

To bridge the gap between your EFC and their COA, schools may offer you a package of financial aid that includes some combination of federal grants—known as Pell Grants—subsidized and unsubsidized direct loans, and paid work-study jobs. Like subsidized loans, grants are intended for students in significant financial need, but you don’t have to repay them except in rare circumstances. Colleges may also offer other, nonfederal aid, such as merit scholarships.

The Bottom Line

Perkins Loans are no longer issued by the federal government, but many are still in repayment. If you work in a public service area like teaching, law enforcement, or healthcare, you may have options for cancellation or forg🍬iveness. Visit the Federal Student Aid website for more details.