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Perkins Loan Program


A high percentage of Americans utilize financial aid to pay for their education.

The key is maximizing your educational success, while limiting the possibilty of experiencing a Student Loan Debt meltdown, is to know your options prior to committing to any source or sources. 

If you require financial aid to complete your educational dreams, you may want to take a look at the Perkins Loan Program to reach your goals.

It’s a fact; only a certain percentage of students can afford to pay college without some type of educational financing.

You know the kind; they come from wealthy families and they can afford… not only to pay for college out of pocket, but also enjoy not having to hold down a job while attending school.

Who wouldn’t you love to be in their shoes? If you’re not, take a deeper look into the Perkins Loan Program.

Since grants, scholarships, work-study and other forms of gift aid, do not usually cover the full costs of a college education for the majority of students; most resort to financial aid.

Or, as it is normally classified, a student loan.

As you may already know, a student loan is a type of financial aid that must be repaid, with interest.

On the other hand, scholarships don’t have to be repaid. Student loans come in four categories:

  • Federal Student Loans
  • Parent Loans
  • Private Student Loans
  • Consolidation Loans

In this section we are going to focus our attention on the Perkins Loan Program, which is a federal student loan program geared towards students who have the greatest financial needs.

Perkins Loan Program Description
The Federal Perkins Loan Program provides low-interest loans to help needy students finance the costs of postsecondary education. Students can receive Perkins loans at any one of approximately 1,800 participating postsecondary institutions. Institutional financial aid administrators at participating institutions have substantial flexibility in determining the amount of Perkins loans to award to students who are enrolled or accepted for enrollment.

Do All Perkins Loans Have To Be Repaid?
Actually, NO! Borrowers who undertake certain public, military, or teaching service employment are eligible to have all or part of their loans canceled.

In general, schools are reimbursed for one hunded percent of the principal amount of the loan canceled, and the reimbursement must be reinvested in the school's revolving loan fund. These institutional reimbursements for loan cancellations are an entitlement. Loan volume in the program comes from:

(1) newly appropriated FCC contributions and loan cancellation payments;

(2) an institutional matching contribution equaling at least one-third of the FCC contribution; and

(3) school-level collections on prior-year student loans.

How Is a Student’s Financial Eligibility Determined?
Financial need is determined by the U.S. Department of Education, using a standard formula, established by Congress, to evaluate the financial information reported by the student on the FAFSA.

The information from the FAFSA then determines the student's expected family contribution (EFC). The fundamental elements in this standard formula are the student's income (and assets, if the student is independent), the parents' income and assets (if the student is dependent), the family's household size, and the number of family members (excluding parents) attending postsecondary institutions.

Get Your Student Loan Calculator Out!
The EFC is the sum of:

(1) a percentage of net income (remaining income after subtracting allowances for basic living expenses) and

(2) a percentage of net assets (assets remaining after subtracting an asset protection allowance).

Different assessment rates and allowances are used for dependent students, independent students without dependents, and independent students with dependents.

After filing a FAFSA, the student receives a Student Aid Report (SAR) or the institution receives an Institutional Student Information Record (ISIR), which provides the student's EFC.

Brad Matheson is a professional Financial Consultant who specializes in helping businesses and individuals resolve their debt issues. He believes that all debt problems can be solved with the right debt advice and aspires to help Americans learn all of their debt options and exercise all of their rights. Says, Matheson, “Don't allow the Student Loan Debt crisis or a Defaulted Student Loan to hinder or block your career aspirations or stymie your financial dreams, There is Student Loan Help available!”