The federal government provides funds for Federal Perkins loans. It is given to your school to distribute.
The school, therefore, chooses who receives this type of loan. You must be a U.S. citizen or an eligible non-citizen, and must have received your high school diploma or equivalent in order to apply for a Federal Perkins loan. You must also be an undergraduate or graduate student, and be enrolled at least half-time in an accredited degree or certificate program. However, you are not eligible for a Federal Perkins loan if you are in default on any other student loans.
Federal Perkins loans are subsidized, meaning that the government pays the interest while you’re still in school. Unlike the Stafford loans, there are no fees. The interest rate is fixed at 5%.
The amount that can be borrowed has a limit. Undergraduate students may be awarded up to $5,500 per year to a maximum of $27,500, while graduate students may be awarded up to $8,000 per year to a maximum of $60,000. The actual amount awarded varies, depending on financial need, any other forms of aid you’re receiving, and the amount of funds available from your school.
It’s important to submit your FAFSA form as soon as possible. Your school only has a certain amount to lend each year, and if you wait to submit your FAFSA, the amount of money you’re awarded may be inadequate.
Over the course of the year, Federal Perkins loans are awarded in 2 installments. These installments may come to you in the form of a check or a credit to your account. Depending on the amount received, you will have up to 10 years to repay the loan.