I’m sorry I realize this is probably a stupid question but here’s my understanding of a Perkins loan:
It’s pretty much free money that accrues NO interest while you’re enrolled in undergrad and only begins accruing interest NINE months after graduation at the 5% fixed rate until repaid.
Does interest begin accruing immediately after graduation or does it begin accruing at the 9 month mark? And is there a deferment available if you go on to professional or graduate school? Does the entire amount get cancelled if you join the Peace Corp/Americorp?
And does a subsidized fed loan work the same way except interest only begins accruing 6 months post graduation?
My daughter was in the PC and had (oddly…but that’s another story) a Perkins Loan. IIRC 2/3 of it was forgiven for her PC service of two years…1/3 for each year of service. My daughter finished PC in 2012 so you would have to see if that still applies.
The interest rate is set annually…not sure what it is now.
Perkins loans are NOT guaranteed forms of aid. They are awarded on a first come/first serve basis at each college. Each college has limited Perkins funding and it goes to lower income applicants to the schools.
I guess what I’m saying is…you can’t count on getting this loan.
Have you already received it in your financial aid package…or are you hoping to get it?
Thanks for that @thumper1! I’ve already received $1,500 in Perkins loans from a financial aid appeal but I’m woefully uneducated in finances. I’ve checked Google a bit more and finally found the info on eadvisors. It seems PC allows for up to 70% loan cancellation and that the interest rate is subsidized for the 9 month period.
You realize the Peace Corps, Teach for America, etc. and similar loan-cancelling programs have very very low salaries, right? You pay for that “free money” with either your time served, or loan repayments. It’s not free. And, those programs can be competitive… you’re not guaranteed entry into them (or their loan forgiveness employment programs either).
My friend participated in one of those programs and made $12,000 full-time living in D.C. She was well beneath the poverty level, lived in squalor, got food from food pantries, and used credit cards to survive… all so she could get $5000 a year of federal student loans forgiven. The numbers might vary, but working low pay for a handful of years doesn’t necessarily make good financial sense if you can find a better paying job and just pay the loans off.
The Peace Corps is a little different. The PCV does their term of service, and once completed 1/3 of their Perkins Loan is forgiven for each year of service.
TBH, we are mighty proud of our RPCV for serving in this capacity…but she did NOT even know about the loan forgiveness when she applied.
Pece Corps gets roughly 40,000 applicants per year to fill less than 10,000 spots. And the application process from interview to acceptance takes about a year.
Sorry to highjacked…but this should not be viewed as an “easy” way to have Perkins loans repayed.
