Info on Perkins loan

Paying for College
1

<p>My son has received a last minute addition of a Perkins loan to his financial aid. He had already accepted both the subsidized and unsubsidized federal student loans. Financially he could drop the unsubsidized loan and accept the Perkins instead to cover tuition (he would not want to take on the sum of all of those loans), but we have never qualified for a Perkins before and I just want to make sure we are understanding it correctly. </p>

<p>I assume it would be better to take the Perkins and drop the unsubsidized while we still can before school starts, with the loan terms and interest, etc? Thanks for suggestions.</p>

2

<p>Absolutely it would be much better to take the Perkins loan. No origination fee, no interest until the student graduates or drops below half time plus a 9 month grace period, then 5% interest. (compared to a 1% origination fee, interest accruing all through school, and a 6.8% interest rate)</p>

<p>It sounds like the school unexpectedly had some Perkins funds become available and your son is the lucky beneficiary.</p>

3

<p>Thank you, that’s what we thought. Just wanted to be sure we understood it correctly. He transferred from one of the school’s regional campuses to main and was on a waiting list for additional funds. He still has to keep the subsidized portion, but at least he can cut out the unsubsidized portion for the Perkins. The Perkins offer is actually a bit more than the unsubsidized was but he will likely accept only the equal amount and hope that the Perkins portion he doesn’t use might go to another student who needs it. Appreciate your response.</p>

4

<p>You might consider to take Perkins Loan and instead reduce the subsidized Direct Loan.</p>

<p>The subsidized Direct Loan has no grace period anymore, while Perkins Loan still has 9 month grace period.</p>

5

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<p>Proof? </p>

<p>I ask because the gov website says otherwise.</p>

6

<p>I mean in the past, the subsidized loans has interest-free 6 months grace period. Now, interest starts on your loan as soon you drop below half-time status; however, you still have 6 months to start making payment.</p>

7

<p>4kidsdad, That is correct. The 6 month grace period still exists but for loans taken out on or after July 1, 2012 you will start paying interest during the grace period.</p>

8

<p>Yes roman, 4kidsdad is correct - new sub direct loans disbursed after July 1 2012 no longer have an interest fee grace period once the student graduates or drops below half time.</p>

<p>from <a href=“http://studentaid.ed.gov/node/49[/url]”>http://studentaid.ed.gov/node/49&lt;/a&gt;&lt;/p&gt;

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9

<p>Right, swim. The second way he said it was correct but the way it sounded first was that the entire grace period was eliminated :)</p>

10

<p>Not yet…</p>