There are a number of college student loans available which will help finance higher education. One of those loans is known as the Perkins Loan, which is available only to students who demonstrate financial need. These loans and other student loans must be paid back but can be forgiven under specific circumstances.
Please note, the federal government is in the process of changing basic student loans policies, including repayment, student loan consolidation, interest rates, and borrowing limits. While this (and other documents on the site) try to be up-to-date, because of the major changes in the US federal budget, we suggest you refer to the US Department of Education website for more information of federal student loans.
College Student Loan: Perkins Loans
Perkins loans are a type of college student loan which has a very low interest rate, longer than usual grace period, and low minimum monthly payments when compared to other federal student loans programs.
Perkins loans have a fixed interest rate of 5% while the Stafford loan programs usually have a variable rate. Repayment begins 9 months, not 6 months, after graduation so students have longer to secure a position and to become financially stable. Minimum monthly payments are only $40, not $50 as they are under the standard and extended repayment options for other federal loans.
The drawback to the Perkins loans is that they do have lower borrowing limits. Undergraduates can borrow up to $20,000 for their entire education but no more than $4,000 per year. Graduate students can borrow a maximum of $40,000 but no more than $6,000 per year. The maximum loan amount for graduate students also includes any Perkins loans they acquired to pay for their undergraduate education. To learn more about the Perkins loan program, read “Federal Perkins Loans” from the U. S. Department of Education.
Forgiveness for a College Student Loan
Perkins loans and other federal loans must be repaid under most circumstances. However, there are some ways to have all or part of a college student loan forgiven.
The Americorps program is one option. Under this program, students work full- or part-time for up to one year in different areas of the United States. Those who complete their time in the program receive up to $4,725 which can be used to pay for higher education or to pay off student loans. Visit http://www.americorps.org to learn more about the program.
The Peace Corps is another option, especially for individuals who have outstanding Perkins loans. As part of this program, students go overseas and work to improve the lives of people living in mostly Third World areas. During Peace Corps service, college student loan payments are deferred. However, for every year served, 15% of outstanding Perkins loan debt can be forgiven.
To learn more about the Peace Corps program, visit http://www.peacecorps.gov.