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InsuranceToday.com For All Your Insurance Needs Federal Financial AidFederal Student Loan Consolidation Private Financial Aid Programs
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Federal Perkins LoansFederal Perkins Loans are low-interest fixed rate loans (currently 5%) for undergraduate and graduate students with exceptional financial need. These loans also offer generous repayment conditions. You don't start repaying the loan, or interest on the loan, until you finish school or drop below half-time status. And, you are given a 9-month grace period before you have to start your repayments. Under certain conditions, you can stop repaying your loan for a short period of time and finish repaying it later. To be eligible for this program, a student must have applied for a Pell Grant. Perkins Loans are campus-based -- that is, the federal government funds the program but gives the money to the schools, which in turn act as the lenders. Depending on when you apply, your level of need, and the funding level of the school, you can borrow up to $3,000 for each year of undergraduate study, up to a total of $15,000 and a maximum of 5 years. Graduate students can borrow up to $5,000 per year of graduate or professional study (6 years max). A student can borrow a maximum combined cumulative total of $30,000 for undergraduate and graduate education. However, you may be able to borrow more than this if you are attending a school that has a default rate no higher than 15% and the school chooses to participate under the Expanded Lending Option, or if you are studying abroad. To find out, check with your school. The interest on the Perkins Loan is subsidized while the student is in school, so students don't pay interest on the loan while they are in school, or during the 9-month grace period available following graduation. Repayment begins 9 months after the student leaves school. Payments must be made regularly -- a minimum monthly payment of $30 is usually required, unless the college agrees to a lower amount. Students have up to 10 years to repay the loan. Under certain conditions, repayment can sometimes be further deferred, or even cancelled. For example, all or part of your loan may be canceled if you teach in certain areas, become a nurse or medical technician, work in certain law enforcement fields or for child or family service agencies, or serve as a full-time volunteer in specific programs (such as the Peace Corps). You may also be able to defer repayment if you resume your studies on at least a half-time basis. Students attending school on a less than half-time status should check with their financial aid office to find out when they must begin repaying their loans. You have up to 10 years to repay.
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