Federal Perkins Loan
Below is a MRR and PLR article in category Reference Education -> subcategory College.
Federal Perkins Loan
Overview
The Federal Perkins Loan, previously known as the National Direct Student Loan (NDSL), is considered one of the best federally subsidized loans available for students with significant financial need. It currently offers a low interest rate of 5%.
Key Features
- Student Responsibility: Perkins Loans are issued directly to students without requiring a parent to cosign. Repayment begins after the student graduates, leaves college, or drops to less than half-time student status.
- Interest-Free Until Repayment: No interest accrues while the student is in school. Students have up to ten years to repay the loan, with repayment starting nine months after graduation or reduced student status.
- Loan Disbursement and Limits: Funded by the government, these loans are managed by the financial aid offices of colleges. The annual loan limit for undergraduates is typically $4,000, with a total borrowing cap of $20,000.
Loan Forgiveness Opportunities
Perkins Loans may be partially or fully canceled for graduates who work in specific fields, such as:
- Full-time teaching in low-income areas
- Special education teaching
- Teaching subjects with a shortage of educators, like math or science
- Nursing or medical technology
- Working at a child or family-service agency in a low-income area
- Law enforcement or corrections
- Volunteering with the Peace Corps
This loan provides a valuable opportunity for students committed to public service roles while easing the financial burden of higher education.
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