So, you've returned your FAFSA, and received some offers of financial aid. Now is the time to evaluate what to accept and what to reject.
If you are determined to be financially needy enough, you will most likely receive an offer or two for a scholarship/grant, which you should obviously accept!
Most people, regardless of financial status, will also receive some sort of an offer for several loans that would cover the full cost of school. People not determined to be needy will not see any outstanding loans available to them, but those with financial need can get some pretty sweet deals on student loans!
One loan that the government offers to students with significant financial need is the Federal Perkins Loan. This is one of the best student loans available, so if your family plans on taking out loans to help pay for college, the Perkins Loan is the one that you should accept first.
About the Program: The Federal Perkins Loan is a low interest (5%) loan available to both undergraduate and graduate students that have financial need. Your school is the lender, meaning that the government contributes the funds, but you borrow the money from your school and pay it back to them. Undergraduate students can borrow up to $4,000 for each year of study (can borrow up to $20,000 total as an undergraduate) and graduate students can borrow up the $6,000 per year ($40,000 total as a graduate student). Students have a grace period of nine months after they graduate before they must start their payments, and then pay the loan back over a period of ten years.
So, why is the Perkins Loan so great and why should I accpet it?
First of all, the Perkins Loan will cover a reasonable amount of your expenses and will not be too difficult to pay off, considering the interest rate and time you have. Here are the details on the benefits of this loan:
-Low 5% interest rates - You might be able to find some that are lower, but 5% is decent for a loan; it is great once you consider all of the other benefits you have with the Perkins Loan.
-Not responsible for interest before repayment begins - Until you begin to repay your loan after graduation, the government will cover the interest on it (as long as you are enrolled in school at least half-time). With the government picking up the tab on interest while you are in school, you will save thousands of dollars in interest!
-9 month Grace Period - 9 months of no payments after graduation means that you can first find a good job that you will be able to pay off the loan with! Did I mention that the government still covers the interest during this grace period?
-The Perkins Loan is a no credit check loan - This means, regardless of your credit, you are eligible to receive a Perkins Loan if you are financially needy. This is especially useful, since most students applying for this loan will likely have no established credit yet. By repaying your loan on time, you can then build your credit or even repair bad credit.
-You don't need a cosigner - Since you don't need a cosigneer to extend their good credit in order for you to receive the loan, the Perkins Loan is an excellent loan to get on your own.
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There are also additional repayment benefits of the Perkins Loan, depending on factors such as your career. You are eligible to have some or all of your debt paid off by someone else if you pursue a career in one of the following fields:
-Military - If you enlist in the Armed Forces, you may be able to set up a loan repayment agreement as part of your contract. By doing this, the Department of Defense will repay some or all of your loan for you. Another benefit with being in the military is that if you are mobilized or deployed, you will not have to make payments on your loans while you are gone. For more details, contact your local recruiting office.
-Nursing - If you choose to pursue a career in nursing after graduation, you may be eligible to have your loan repaid by the Department of Health and Human Services Nursing Education Loan Repayment Program. For more details, visit this website.
-Peace Corps - Up to 70% of your Perkins Loan can be forgiven by volunteering in the Peace Corps. If you serve with Volunteers in Service to America (VISTA) or AmeriCorps, you will receive a monetary award that will help to pay off your loan.
-Community Service - Up to 100% of your loan will be repaid if you pursue a career in a community service or protection field. The following are examples of full-time careers that will make you eligible to receive this payment:
-Teacher at a school serving low-income families (elementary or secondary school)
-Special education teacher
-Teacher in a field designated as a teacher shortage area
-Professional provider of early intervention services for the disabled
-Nurse or medical technician
-Law enforcement or correction officer
Once again, if you plan on taking out a loan for college, the Perkins Loan is definitely one to look into. All of the benefits that come along with it make it a lucrative offer for students interested in loans.
In my next few postings, I will continue to elaborate on some other loans available that you might also want to look into. Have a good day!
Dec 29, 2008
