The Federal Perkins loan – often referred to as “campus-based aid” - is a low-interest loan specifically designed for cash-strapped students requiring financial assistance to pay for their postsecondary education.
Unlike the Federal Stafford loan and Parent PLUS loan, the Federal Perkins Loan comes from federal coffers but is made through a school’s financial aid office who has the jurisdiction in determining who receives funding and how much. And since the school is the lender, loan repayment must be made to the school.1
Eligibility
Perkins loans are awarded to both full-time and part-time students who demonstrate exceptional financial need – regardless of income level or credit history; but aren’t limited only to “traditional” students just out of high school.
As a single mother, you may apply as long as you are able to show proof of financial need and enroll in one of the estimated 1,800 postsecondary colleges or universities participating in this program. However, priority will given to recipients of Federal Pell Grants.
In addition, eligibility requirements for the Federal Perkins Loan are as follows. You must
- Be a United States citizen or an eligible non-citizen with a valid social security number
- Be working toward a degree or certificate in an eligible program
- Have a high school diploma, GED or pass an approved ability-to-benefit (ABT) test
How to Apply
As with most federal student loans, you will first have to complete and submit a FAFSA, which stands for Free Application for Federal Student Aid.
From there, your school will receive an ISIR or Institutional Student Information Record while the student receives a SAR or Student Aid Report. Both documents detail the EFC of the student and will basically let you know if the school deems you eligible for this type of loan.
Amount Available
This will largely depend on what your expected family contribution or EFC is. Factors considered for maximum loan amount available include the following:
- How much of your income remains once basic living expenses are deducted
- The value of remaining assets when asset protection allowance is deducted
- The number of individuals in the family who are also pursuing a postsecondary degree
There is also a specific assessment procedure and rate used for single mothers, which are qualified as independent students with dependents. In any case, the maximum amount available annually that you can receive from this loan is $4,000.
As a graduate or professional degree student, you can receive a maximum of $8,000 per year but only up to a total amount of $60,000.
Interest Rate
The current fixed interest rate on all Perkins loans is 5% which is the lowest among all federal student loan programs; with the exception of subsidized Stafford loan interest rate (3.4%) for undergraduate students for the 2010–2011 school year.
On another positive note, however, you should be aware that those undertake service in the military, work as a teacher in a low income area or employed in certain public service jobs may be eligible to partial or complete cancellation of your student loan2 – often referred to as “loan forgiveness“.
References:
- Source: Student Loan Network [↩]
- studentaid.ed.gov [↩]
