Resources

Loan Repayment: Federal Perkins Loan


FEDERAL PERKINS LOAN

Payments are made over a maximum of 10 years, with a minimum payment of $40.

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:

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.

DEFERMENT/ FORBEARANCE TABLE FOR PERKINS LOANS


Provided by ECSI

DEFERMENT/FORBEARANCE TYPE

PER 23/24
7/01/93 - current
In-School (SD and WD) No Limit
Graduate Fellowship (JD) No Limit
Economic Hardship (QD) 3 years
Unemployment (LD) 3 years
Rehabilitation Training (KD) No Limit
Dentistry (YD) 2 years
Military Service (MZ) No Limit
Military Service Post Demobilization (DM) 6 months
Post-Active Duty Student Deferment (SM) 13 months

Forbearance (FD and ED)

   a. General Forbearance

   b. Mandatory Forbearance- Student Loan Debt
       Burden

3 years

 

  1. In-School Deferment (SD and WD)
    You may defer repayment of a Perkins Loan if you are enrolled at least half-time in an eligible school.

  2. Graduate Fellowship Deferment (JD) 
    You may defer repayment if you are enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Department, including graduate or postgraduate fellowship-supported study (such as a Fulbright grant) outside the United States.

  3. Economic Hardship Deferment (QD)
    You are entitled to an economic hardship deferment for periods of up to one year at a time, not to exceed three years cumulatively, if you provide the school with satisfactory documentation showing that you meet any of the following criteria:

    a.  You have been granted an economic hardship deferment for another federal student loan
         (Direct Loan or FFEL Stafford or PLUS) for the same period of time;
    b.  You are receiving (or received) federal or state public assistance, such as Temporary
         Assistance to Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps
         (SNAP), state general public assistance, or other means-tested benefits for the same time
         period as the requested deferment;
    c.  You are working full time and earning a total monthly gross income that does not exceed
         (1) the monthly earnings of someone earning the minimum wage, or (2) 150 percent of the
         poverty line for your family size.
    d.  You are serving as a Peace Corps volunteer.

    Note: If you are applying for a subsequent period of economic hardship deferment beginning less than one year after the end of a deferment received under conditions c or d above, you must submit a copy of your federal income tax return if you filed one within the eight months prior to the date the subsequent deferment is requested.

  4. Unemployment Deferment (LD)
    You may defer repayment on a Perkins Loan for up to three years, regardless of disbursement date and contrary provisions on the promissory note, if you are seeking and unable to find full-time employment. Documentation is required.

  5. Rehabilitation Training Deferment (KD)
    You may defer repayment if you are enrolled in a course of study that is part of a Department-approved rehabilitation training program for disabled individuals. To receive this deferment, you must provide the school with certification that:
    a.  You are receiving, or scheduled to receive, rehabilitation training from the agency;
    b.  The agency is licensed, approved, certified, or otherwise recognized by a state agency
         responsible for programs in vocational rehabilitation, drug abuse treatment, mental
         health services, or alcohol abuse treatment; or by the Department of Veterans Affairs; and
    c.  The agency provides or will provide the rehabilitation services under a written plan that (1)
         is individualized to meet your needs; (2) specifies the date that services will end; and (3)
         is structured in a way that requires substantial commitment from you (the borrower). A
         substantial commitment is a commitment of time and effort that would normally prevent you
         from being employed 30 or more hours per week in a position expected to last atleast three
         months, because of the number of hours that must be devoted to rehabilitation or because of
         the nature of the rehabilitation.

  6. Military Service Deferment (MZ)
    You may defer repayment on your Perkins loan while serving on active duty or performing qualifying National Guard duty in connection with a war, military operation, or national emergency. After your active duty service ends, you will receive a post-demobilization deferment of 180 days.

  7. Military Service, Post Demobilization Deferment (DM)
    This deferment condition is applicable as of your demobilization date - when your Military Service Deferment (MZ) ends - and provides 180 additional days of deferment. Documentation is required to support the end-of-service date.

  8. Post-Active Duty Student Deferment (SM)
    If you were enrolled in a postsecondary school at the time of, or within six months prior to, your military activation, you are eligible for a 13-month period of deferment on your Perkins loan following the completion of active duty military service (National Guard or Armed Forces Reserve, or retired status from the Armed Forces). If you re-enroll in postsecondary school prior to the expiration of the 13-month period, the deferment ends on the date you re-enroll. 
    a.  For purposes of this deferment, "active duty" has the same meaning as in Section 101(d)(1)
         of Title 10, United States Code, but does not include active duty for training or attendance at a
         service school/academy. Members of the National Guard should note the definition of "active
         duty" on the request form in order to confirm eligibility. 
    b.  Unlike the Military Service Deferment described in #6 above, students receiving the Post-
         Active Duty Student Deferment need not be activated during a war, national emergency,
         or other military operation.
    c.  You may be eligible for, and receive, both deferments. If so, the overlapping deferment
         periods will run concurrently; you will receive no more than 13 months of deferment
         following completion of qualifying military service.

  9. Forbearance (ED and FD)
    Forbearance is usually a temporary postponement of payments. You may alternatively request an extension of time allowed for making payments, or request to make smaller payments for a set period of time. Unlike deferment, interest continues to accrue during any period of forbearance. You may be billed monthly for that interest, or pay it as a lump sum at the end of the forbearance period. Federal regulations state that accrued interest on the Perkins loan cannot be capitalized.

    Both you and the school must agree upon the terms of the forbearance. It may be granted for a period of up to one year at a time. The forbearance may be renewed, but the periods of forbearance collectively may not exceed a total of three years. The school may apply an authorized period of forbearance to begin retroactively (on an earlier date than you request) if you request that the school do so and you provide adequate supporting documentation.

    Schools may grant forbearance if you are experiencing financial hardship, poor health, or other acceptable circumstances (such as service in AmeriCorps, national military mobilization, or other national emergency). You must request forbearance, and supporting documentation may be required. There are two types of forbearance:

    a.  Mandatory Forbearance for Student Loan Debt Burden: Applicable if your total student loan
         payments are more than 20% of your monthly income

    b.  General Forbearance: May be granted at the discretion of the University if your circumstances
         do not meet the criteria for mandatory forbearance or deferment         

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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

Speech-Language Pathologists may qualify for cancellation/forgiveness if working full-time exclusively with low-income (Title I eligible) schools. To determine if your employment qualifies, please refer to the Department of Education's directory of Title I eligible schools/agencies. Please print this Title I confirmation and submit it with your completed request form.   

NOTE:To qualify for 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%


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.

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. Employer's official seal or stamp on the completed form
    a.    Notary stamps are not sufficient.
    b.    If no organization stamp/seal is available, you must provide item 4.
  4. Confirmation letter from employer (on official letterhead) with the following information:

a.    Place of employment

b.    Name, title, and signature of authorized official providing the information

c.    Your employment status (e.g., full-time)

d.    Your job title

e.    Your employment start date (and end date, if applicable)

Note: 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 new employer.