<p>What is the better loan?</p>
<p>Perkins are subsidized, which is preferable to an unsubsidized Stafford loan.</p>
<p>Between subsidized direct (or stafford) and Perkins</p>
<p>Perkins: no origination fee Direct: 1% origination fee
Perkins: Interest rate 5% Direct: Interest rate 3.4%
Perkins:9 month grace period Direct:6 month grace period
Perkins: no interest accrues in grace period Direct: interest accrues in grace period</p>
<p>The problem, from my experience, is the Perkins loans offered in financial aid packages is usually a small amount (i.e. $500-$1000/per year). This usually equates to needed another loan option which is typically the sub/unsub Direct loan in addition to the Perkins.</p>
<p>^^good point. I was just assuming the OP had been offered both and was trying to determine which was better (you know what they about assuming stuff). Chuck - the Perkins is actually quite difficult to get. Schools have *very *limited Perkins funds to award and once they most people will never even be offered them. My daughter got Perkins some years and not others even with the same need each year.</p>
<p>Or, it seems like they may be offered and then pulled back if they run out of funds, as it seems to have happened with my daughter this year. She had one in her pkg. Before she completed the paperwork, she got a letter saying that due to some thing or other with federal stuff, they had to substitute an institutional loan. They did not explicitly say they ran out of funds, but that is the impression I got. The loan they offered her in place of the Perkins was an institutional loan that was 1% more than the Perkins and still subsidized. I forget if there was an origination fee. </p>
<p>I think what happened is they just plain ran out of funds, though I can’t be sure. The school had more freshmen accept their offers of admission this year than usual, and they also made no secret that the retention rate for upperclassmen is running higher than usual. There was a housing crunch over the summer.</p>
<p>My daughter is not a freshman, and although she was initially offered the Perkins her first year, she ultimately did not get it as she had a bunch of scholarships roll in after her financial aid. That was one of the first things they backed out of her original pkg. </p>
<p>We waited a few weeks before we did the paperwork this year. Lesson learned if she should happen to get a Perkins next year—act fast! Thankfully the school did have another option for us with the institutional loan.</p>
<p>Most of the time, I would take the Perkins. Grab it up as you can always get the Stafford, even at the end of the year, even if it might be on an unsub basis if you have no defined need left. The Perkins is take it or leave it NOW. I also believe that in some schools, consideration for further Perkins does depend on whether you got it the prior year, so taking it can put you further up in line for consideration for future such loans.</p>
<p>We were offered a Perkins, and the sub Direct loan and also the unsub direct loan. I tried accepting the Perkins and the Sub Direct and declining the unsub. The school called me and told me if I wanted the Perkins I had to take the unsub Direct also. Their reasoning was that since I was being offered the Perkins, I had need (or rather my S did), so therefore I should Need to take the unsub loan. We went ahead and took all 3 for this year, chances are we won’t be offered the Perkins next year.</p>
<p>Must be a specific school requirement. We have never accepted the unsub loans and the 2 schools I am familiar with did not require taking the unsub in order to get the Perkins loan. (I think it is wrong for them to do that personally, kind of put you between a rock and a hard place).</p>
<p>My D’s school does not require us to take Unsub. Direct Loan with the Perkins Loan.</p>
<p>3rd one here. I have no unsub loans but nearly full sub and Perkins.</p>
<p>I tried accepting the Perkins and the Sub Direct and declining the unsub. The school called me and told me if I wanted the Perkins I had to take the unsub Direct also.</p>
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<p>As a financial aid professional (yes, new job allows me to say that again!), I am absolutely appalled that a school would have that requirement. It’s just plain wrong!!! No way should a school be pushing students to take more loans than they need, and unsub, at that. I think that is awful. Frankly, if I were you, I would complain long and loud.</p>
<p>Or … you can just cancel the unsub loan later (or pay it back right away). I vote for complaining AND canceling.</p>
<p>Does this school state their policy online? Is this a state or private school?</p>
<p>Never mind … I figured it out. The school’s website does actually state: Students are required to maximize their entire Direct Loan eligibility before receiving a Federal Perkins Loan. </p>
<p>I still think that stinks, and I have not heard of such a policy before. Of course, they can make the policy if they want … as long as everyone has to comply. I suggest repaying the loan to the lender, in full, after you get the disbursement. The only warning I have on that is that you won’t be able to re-borrow during the year if you end up needing it (if you were to cancel the unsub, you could borrow later if need be - not so if you repay it - but with that policy, I don’t think they will let you cancel unsub & keep Perkins).</p>
<p>Is the school RIT?</p>
<p>I sure hope the school is not UB</p>
<p>I am guessing it is RIT. I could be wrong, but they do have that policy. Again, they are within their rights to have that policy (as long as they enforce it equally for everyone). </p>
<p>I worked at a school with a large Muslim population, and many would not borrow unsub loans (due to Sharia law regarding usery). Some would ask for Perkins instead of unsub, but we couldn’t do that. If they received Perkins, they could absolutely use that and not unsub … but we couldn’t award Perkins when they didn’t get it in the first place, simply because they couldn’t take out unsub loans. Aid policies have to be consistent for all students.</p>