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Loan Repayment: Federal Perkins Loan


FEDERAL PERKINS LOAN

Payments are made over a maximum of 10 years, with a minimum payment of $30 for loans disbursed before October 1, 1992 or $40 for loans disbursed on/after October 1, 1992.

The Federal Perkins Loan has a 9-month grace period. Following your 9-month grace period interest will start accruing at a simple 5%. At that time you either go into repayment or request a deferment depending on the circumstances.

If you are approved for an economic hardship or other type of deferment, you may have an additional 6-month post-deferment grace period following the deferment. A "post-deferment grace period" is the period of six consecutive months that follows the end of a period of "deferment" and precedes the date on which you must resume repayment on your loan.

Things for you to know:

• If you request a deferment to begin during the initial grace period, you must waive (in writing) your rights to the initial grace period. The request of a deferment by itself is not enough documentation for ECSI or Midwestern University to waive your initial grace period. You must also acknowledge in writing that you want the waiver.

• Your eligibility for deferment is based on the regulations in affect when each loan was issued; therefore, you could have different deferment eligibility from loan to loan.

• Neither the grace, deferment, or forbearance period are counted as part of the 10-year repayment period.

PERKINS Deferment and Forbearance Criteria

The Federal Perkins Loan Program offers you a variety of deferment and forbearance options. You are entitled to have the repayment of a loan deferred under certain circumstances. To qualify for a deferment, you must meet the specific eligibility requirements for that deferment type.

NOTE: For loans made on or after July 1, 1993, interest does not accrue during any type of deferment.


DEFERMENT/ FORBEARANCE TABLE FOR PERKINS LOANS

Provided by ECSI
As of July 1, 2006 these are the conditions for Deferment/Forbearance for Perkins Loans

Deferment Types

PER 23/24
7/01/93 - current

PER 22
10/01/92- 6/30/93

PER 20/21
7/23/92 - 6/30/93

PER 18/19
12/1/90 - 7/22/92

PER 16/17
7/1/87 - 11/30/90

PER 15
10/1/81 - 6/30/87

PER 14
7/1/81 - 9/30/81

PER 13
10/1/80 - 6/30/81

PER 11/12
7/1/65 - 9/30/80

Half-time or greater student (SD and WD)

no limit

no limit

no limit

no limit

no limit

no limit

no limit

no limit

no limit

Forbearance
(FD and ED) Form

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Economic Hardship1 (QD)Form

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Unemployment (LD) Form

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Rehabilitation training (KD)Form

No Limit

No limit

No Limit

No limit

No Limit

No Limit

No Limit

No Limit

No Limit

Internship or Residency2 (ID)Form

Dentistry Only - 2yr

2 year8

2 year9

Dentistry Only - 2yr

Dentistry Only - 2yr

Dentistry Only - 2yr

Dentistry Only - 2yr

Dentistry Only - 2yr

Dentistry Only - 2yr

Fellowship3 (AD)Form

No Limit

No limit

No Limit

No limit

No Limit

No Limit

No Limit

No Limit

No Limit

Hardship (HD)

N/A

No Limit

No Limit

No Limit

No Limit

No Limit

No Limit

No Limit

No Limit

Military4 (MD)Form

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Peace Corp (PD)Form

N/A

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Vista (VD) Form

N/A

3 years

3 years

3 years

3 years

3 years

3 years

3 years

3 years

Disability - debtor5 (DD)

N/A

3 years

3 years

3 years

3 years

3 years

3 years

3 years

N/A

Public Health Serv (UD) Form

N/A

3 years

3 years

3 years

3 years

3 years

3 years

3 years

N/A

Volunteer Tax-Exempt Org. (OD)

N/A

3 years

3 years

3 years

3 years

3 years

3 years

3 years

N/A

Disability - spouse (DS)

N/A

3 years

3 years

3 years

3 years

N/A

N/A

N/A

N/A

Mother re-entering workforce6 (RD)Form

N/A

1 year

1 year

1 year10

1 year10

N/A

N/A

N/A

N/A

NOAAC (ND)

N/A

1 year

1 year

1 year10

1 year10

N/A

N/A

N/A

N/A

Parental Leave7 (LD)

N/A

6 months

6 months

6 months10

6 months10

N/A

N/A

N/A

N/A

 

NOTES for DEFERMENT CONDITIONS:

1- A borrower is considered to have an economic hardship if the borrower:

a. Is working full-time, but earning an amount that does not exceed (the greater of):

1. The federal minimum wage, or
2. An amount equal to 100% of the poverty line for a family of two as determined
according to section 673(2) of the Community Service Block Grant Act, or

b. Meets other regulatory criteria that takes into account the borrower's debt-to-income
ratio as primary factor.

2- Borrowers with loans disbursed on or after 07/01/93 may receive a deferment only for a
residency program in dentistry.

3- A deferment request from a borrower enrolled in a graduate or postgraduate fellowship-
supported program outside of the U.S. is approved until the completion of the fellowship
period.

4- a. For loans made on or after 07/01/93, military service must be in an area that qualifies for
hazardous-duty pay.

b. For loans made on or after 07/01/01, for a period not to exceed three years during which I
am serving on active duty during a war or other military operation or national emergency,
or performing qualifying National Guard duty during a war or other military operation or
national emergency.

5- Applies to borrower or care of spouse only. Does not allow deferment for the care of
temporarily totally disable dependent.

6- Borrower's salary must not be more than $1 over the minimum hourly wage rate.

7- Borrower must not be attending an eligible post-secondary institution or be gainfully
employed. Deferment must begin within six months after the borrower ceased to be enrolled
at least half-time at an eligible institution.

8- The internship program must require that the borrower have a bachelor's degree before
being admitted. In addition, the program must be required by a state licensing agency for
certification for professional practice or service, or the program must lead to a post-
graduate degree or certificate from a post-secondary school, hospital or health-care facility.

9- The internship program must require that the borrower have a bachelor's degree before
being admitted. In addition, the program must be required by a state licensing agency for
certification for professional practice or service.

10- Perkins 16 and 18 are not eligible for these three deferment types.

___________________________________________________________________________

PERKINS Loan Cancellation

What is Cancellation?

Cancellation means that a portion or all of the principal plus accrued interest will never have to be repaid. Under certain circumstances, you may have all or part of your Perkins loan canceled. You are entitled to qualify for loan cancellation/forgiveness if you are engaged in a service for which you may qualify.

Cancellation Provisions

Perkins Loan cancellation/forgiveness applies only for Physician Assistants, Occupational Therapy, Physical Therapy, and Cardiovascular Science students who practice in their chosen field of study. You must be working as a Nurse or Medical Technician providing health care services. As long as you are employed as an allied health professional on a full-time basis you may qualify for cancellation, and MWU shall cancel your Perkins loan up to 100% of the outstanding balance.

In order for you to receive this cancelation you must assist, facilitate, or complement the work of physicians or other specialists in the health care system. You must be certified, registered, or licensed by the state agency within the state where you provide this service.

NOTE: To qualify for this cancellation you must work full-time for 12 consecutive months and the loan must be in repayment. If the loan has been consolidated or paid in full, then cancellation does not apply. No payments made during a period for which a borrower qualified for a cancellation may be refunded, unless the borrower made the payment because of an institutional error.

Cancellation Rates - Guidelines/Chart

Percentage is taken out of the original principal loan amount plus interest on the unpaid balance accrued during the year of full-time employment of qualifying service. If you continue in eligible employment and file all forms, your loan will be cancelled in full at the end of five years.

YEAR

RATE

1st Yr

15%

2nd Yr

15%

3rd Yr

20%

4th Yr

20%

5th Yr

30%

 

To apply for partial cancellation of your loan you must submit the "Request for Cancellation Benefit or Deferment Prior to Cancellation" form. Be aware that the cancellation is a two-step process because the cancellation cannot be granted if you have not completed the 12 month service period.

• The request for deferment while service is being performed should be submitted at the beginning of the 12 month period to defer your payments.
• A second form should be submitted upon completion of the 12 month period to receive the partial cancellation for the service previously performed.
• After your first year, you may use a single form to cover both the benefit year that has passed for cancellation, and to cover the upcoming year of service for deferment.

Things you should know before submitting the request:

Every year when you are applying for the cancellation you need to provide the following documents:

1. Copy of your medical license
2. Copy of official job description
3. Official Seal or Stamp - To be placed on the cancellation form under section IV - Certification of Employment (If the organization doesn't have item #3 they should precede with item #4).
4. Organization Official Letterhead - With the following information:

a. Place of employment
b. Status of employment (e.g., full-time)
c. Confirmation that you work with them
d. Brief description of job duties
e. Employment start date

5. If you have changed employers during the year, you MUST submit two cancellation forms (one for each employer). There should be NO BREAK periods between changing to a different employer.

 


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