Federal Perkins Loan And Fulfillment Of A Student's Dream

Federal Perkins loan is a Federal loan which complements the Stafford Loan. Both these loans require the applications through FAFSA forms and signing on a promissory note to make an agreement to repay the loans back.

The Federal Perkins Loan is provided by the borrower's school after the government pays the amount to the school. The Federal Perkins loan is always subsidized which means, the government would be responsible to pay off the interests during your school days.

Unlike Stafford Loans, the Federal Perkins Loan comes with a zero fee and a much lower interest of 5 percent. A yearly amount of $4000 is awarded to the students pursuing undergraduate courses whereas for the graduate students the amount has been limited to $6000. The amount of the award does not depend only on the student's need but also on the funds available with the school. This is because a fixed amount of fund is provided to each eligible school by the government on a yearly basis and this may lead to scarcity of funds. Therefore, it is advised to submit the FAFSA without delay. The payment is received in two installments per year and the maximum time for repayment is 10 years.

US citizens with GED certification or a high school diploma can get the loan sanctioned provided they had not made a default in the payment of other student loans. Apart from Stafford and Federal Perkins loans the students can also get funds from private loans and through consolidation of loans. Submission of FAFSA is not needed while applying for a private loan from a bank. But it is better to avoid private loans because of the high rates of payment involved with it.

The best alternative is to consolidate the Stafford and the Perkins loans with an interest that can never exceed 8.25 percent. Thus, one would be entitled with the benefits of both the loans but would have to pay a single interest. Isn't that economic?