Perkins Loans: Eligibility, Guidelines, and More

Let's assume you're a single mom and you're counting pennies.Scholarships for single moms are the ideal way to pay for college, along with a federal Pell Grant. For anything you have to pay back, Perkins loans are the best solution. This all depends on Perkins loans eligibility; unlike Stafford loan, you must meet Perkins loans eligibility in order to fully take advantage of the program.

What is a Perkins Federal Loan?

Perkins loans are federally funded student loans with a fixed interest rate of 5% over a ten-year repayment period. Perkins federal loans also come with a nine-month grace period, meaning that you have nine months to make your first payment following graduation, withdrawing, or failing to meet the required number of course units. In addition, interest doesn't accrue until the first payment. federal Perkins loan eligibility is based on economic need and has an annual limit of $5,500 for undergraduates and $8,000 for graduate students. Like the Pell Grant and other means of financial aid, you'll need a FAFSA as your starting point.

Perkins federal student loans are also eligible for federal forgiveness based on your post-graduation career choices. For those that enter into the Federal Loan Cancellation program, the first few years of your career could help those in need while forgiving your debt. In our introduction example, it could be the next best thing to scholarships for single moms.

Federal Perkins Loans vs. Stafford Loans

What are the big differences between Perkins loans and Stafford loans? Stafford loans come in subsidized and unsubsidized forms. When subsidized, Stafford loans may offer a better interest rate than Perkins loans (between 2010 and 2012). When unsubsidized, Stafford loans have a higher interest rate than Perkins loans. Just about everyone is eligible for an unsubsidized Stafford loan, but federal Perkins loans eligibility (along with subsidized Stafford loans) is based on economic need.

One caveat about Perkins federal loans is that eligibility can shift based on the actual amount funding per school. Perkins federal loans come from a revolving fund; that is, the amount going out is based on the amount coming back in. In other words, the more graduated students pay back their loans, the more Perkins loans can be handed out. Around 1,800 schools hand out Perkins federal loans based on eligibility. Going back to our example, a single mom may have a better chance of getting Perkins loans than dedicated scholarships for single moms, making them a better option to pursue than Stafford loans or private loans.

Your Financial Aid Options

Let's review the order on which you should pursue your education financial aid. First, go for free money, such as scholarships for single moms, the Federal Pell Grant, or our $10,000 scholarship. After that, examine your federal Perkins loans eligibility and apply if you qualify. After that, Stafford loans (first subsidized, then unsubsidized) are your best option. Leave private student loans as your final option.

In other words, federal Perkins loans are your best financial aid choice of all options you have to pay back. Review your Perkins loans eligibility, fill out your FAFSA, and get going with your education.