Repaying Federal Perkins Loans

When you receive a federal Perkins loan, you will be required to sign a promissory note that states your agreement to repay the loan according to the specified terms. You need to understand that this document is legally binding, and you must repay your loan. The money is borrowed directly from your university, and is repaid to them, rather than to a private bank. You can include Perkins loans in a consolidation loan, but the interest rate on Perkins loans is so low, this is not usually recommended.

Grace Period

Built into the federal Perkins loan application and repayment process is a grace period before repayment is required is a short grace period. The grace period is nine months from the time of graduation, or from the time of discontinuing your education. During this time, there is not any interest applied to the loan. After the grace period is over, you must begin to pay your loan back, and interest begins to build. Repayment is usually in the first quarter after you leave school, which comes to around twelve months from your graduation. This provision gives recent graduates time to gain employment to help pay back their loan.

Deferment

It is possible to put a Perkins loan into deferment. This is a period of time where the payment is suspended and no interest is earned on the account. In order to do this, you must file certification on time, and if approved, you must begin making payments after your new six-month grace period. You must prove to the university that holds your loan that you qualify based on your income for deferment of your loan. It is your responsibility to request deferment, and if you do not do so correctly, you will be considered delinquent, which will negatively affect your credit score, and could lead to the loan being required immediately.

Cancellation

It is possible to have some or all of your Perkins loan canceled, depending on the type of work that you do. If you become a full time teacher in either elementary or secondary school with low-income families, you could have your loan dismissed. Also, if you are a special education teacher, or teach a specified subject that is considered to be in shortage in your state your loan could be cancelled.

Those who work as early intervention services providers for babies with disabilities are qualified to have their loans cancelled. Also, full time law enforcement officers are eligible, as well as full time nurses and medical technicians. Finally, employees of child or family service agencies who work with high-risk, low-income children and families are eligible for cancellation.

Each state will have different cancellation requirements, but these are a general list that most states accept. If you are thinking of making application for federal loan Perkins, and are heading into one of these fields, chances are you might not have to pay back your entire loan. If you are offered a federal Perkins loan, seriously consider taking it! It is one of the cheapest ways to finance your education!