The Federal Perkins Loan is issued by the prospective student’s school, and must subsequently be paid back to the school. The loan is made with
government funds offered by the U.S. Department of Education and your school contributes a share. The Perkins Loan is need-based. To be eligible
for this loan, a student must submit a Free Application for Federal Student Aid (FAFSA). A Federal Perkins Loan is a low-interest (5 percent) loan
for both undergraduate and graduate students with financial need.
The Federal Perkins Loan has a couple of attractive features. The first is its fixed interest rate of 5% over the loan’s ten-year repayment period.
Perkins Loans are subsidized by the government, which means that interest on the loan starts to accrue only once the student has graduated or once
the student has dropped below half-time attendance at his or her school. Additionally, the Perkins Loan has a nine-month repayment grace period, with
the first payment of the loan due on the tenth month following the student’s graduation or upon the student’s change of status to less than half-time.
However, the Federal Perkins Loan has a couple of drawbacks as well. Eligibility requirements for the loan are quite stringent, and most applicants
simply do not qualify to receive this aid. What’s more, the loan amounts for Perkins Loans are relatively small, up to $5,500 for one year of
undergraduate study (for a career total of $27,500), and up to $8,000 for a year of graduate study (for a career total of $60,000 including undergrad
loans).
People Capital is spearheading a new and improved form of student lending. To learn more about People Capital’s innovative peer-to-peer lending
platform, please click here..