With the Perkins Loan program being extended through September 30, 2017 the Federal Department of Education wants you to be aware of how it compares to the Direct Student Loans and how it can be consolidated with Direct Loans.
Federal Perkins Loan Program Extension Act Additional Disclosures
The Federal Perkins Loan Programs ends September 30, 2017. No additional Perkins loans will be available after that time.
Perkins Loans have a fixed interest rate of 5% regardless of the first disbursement date. Interest is subsidized until you enter repayment. There is no origination fee on the Perkins Loan.
Direct Loans interest rates are determined each spring for new loans being made for the upcoming award (July 1 to the following year June 30).
View the latest interest rate information at StudentAid.gov/interest.
Annual Limits for Subsidized and Unsubsidized Direct Loans
||Dependent Students (except students whose parents are unable to obtain PLUS loans)
||Independent Students (and dependent undergraduate students whose parents are unable to obtain the PLUS Loans)
|First-Year Undergraduate Annual Loan Limit
||$5,500—No more than $3,500 of this amount may be in subsidized loans.
$9,500—No more than $3,500 of this amount may be in subsidized loans.
|Second-Year Undergraduate Annual Loan Limit
||$6,500—No more than $4,500 of this amount may be in subsidized loans.
||$10,500—No more than $4,500 of this amount may be in subsidized loans.
|Third-Year and Beyond Undergraduate Loan Limit
||$7,500—No more than $5,500 of this amount may be in subsidized loans.
||$12,500—No more than $5,500 of this amount may be in subsidized loans.
A student with an outstanding balance on a Perkins Loan may only be awarded a new Perkins Loan after all Direct Subsidized Loan eligibility has been awarded. A student without an outstanding balance on a Perkins Loan may only be awarded a new Perkins Loan after all Direct Subsidized and Unsubsidized Loan eligibility has been awarded. A student may decline or reduce either of the Direct Loans if they choose, however, the full amounts of those loans must be included in the calculation of aid prior to awarding a new Perkins Loan.
View more detailed limit information at StudentAid.gov/loans.
Repayment and Forgiveness Benefits
Repayment and Forgiveness Benefits for Direct Loans are not available for Perkins Loans. The repayment period for a Perkins Loan is 10 years. Direct Loans provide several repayment options including income-driven repayment plans. These repayment options are not available under the Perkins Loan Program.
Forgiveness benefits provided under the Direct Loans Program are not available under the Perkins Loan Program. However, the Perkins Loan Program does have its own cancellation provisions. General repayment and forgiveness information is available at StudentAid.gov/repay.
Consolidation Option for Perkins Loan
You may consolidate your Perkins loan with your other Federal student loans. One benefit to this is a single monthly payment instead of multiple payments to multiple servicers. By consolidating, you may also have access to additional repayment plans. The income-driven repayment plans, which are not available under the Perkins Loan Program, may make your student loan debt more manageable by possibly reducing your monthly payment amount. However, by extending the repayment period, you will likely be paying more interest over time.
For additional information on a Direct Consolidation Loan, visit StudentAid.gov/consolidation.