Wednesday, February 6, 2013

Federal Perkins Loans

If your financial aid and other college money resources do not pay for all of your expenses, you may need to look for alternatives. One of these alternatives, is the Federal Perkins Loan Program. Most colleges and universities have these loans available. The loans are made through the school, and the majority of the money they lend comes from other students repaying loans. The federal government will also reimburse the school if the loan was cancelled through several ways available to students. You must complete your FAFSA to apply for a Perkins Loan. They will also require you to sign a promissary note. After graduating, you can have the loan cancelled by working as a teacher in under-served schools. You can get a forbearance or deferment due to hardship as well. Be sure and discuss all this with the college that is giving you the Perkins Loan. It must be repaid. Student loans are not discharged due to bankruptcy. Which brings up problems about these loans.

Because you borrow from the college, the college will want their money back. They could sue you if you default on this loan. In fact, many colleges and universities are now doing just that.

Keep in mind that almost $1 billion in Perkins Loans were defaulted on in 2011. That's huge. It shows these loans are being given to students who may be getting over their heads in debt. These loans are supposed to be for low income and otherwise poor college students. That alone may be contributing to the delinquencies. Think long and hard before getting one of these. These loans are not the normal Federal Direct Student Loans that every student can get.

Barack Obama is hoping to increase the money available to students in the Perkins Loan program. He is also suggesting that it become loans only available from the federal government and not the individual college.

You need to look at your situation if you qualify for these loans. It may not sound good to you, but these loans are made to students in the lowest position to repay them. You are probably a high credit risk. Will you earn enough money to pay this loan back, as well as your other student loans? Think first.

>> Student Loan Consolidation.

>> PLUS Loans.