Federal Perkins Loan
Federal
Perkins Loan is a federally funded program providing long-term low-interest (5%) loans
for students who demonstrate financial need. Interest does not accrue on the loan and there
is no repayment while the student is enrolled at least half time. Repayment begins nine
months following graduation, withdrawal, or enrollment below half-time status. The amount
of funds that is available for CSUF students depends upon the repayments of previous CSUF
borrowers and an annual federal allocation to the institution.
What is the Annual Loan Amount?
Up to $4,000 for CSUF Undergraduates, Teacher Credential Candidates and Graduates.
Is there a Cumulative Borrowing Limit?*
$4,000 per academic year for studies toward a bachelor's degree.
$20,000 for a student who has completed an undergraduate degree.
$40,000 for studies towards professional or graduate degrees. The $40,000 includes amounts
borrowed for undergraduate study.
*The loan agreement may provide that the total payment to an institution by a borrower
be rounded to the next highest whole dollar amount that is a multiple of $5.
What are the Repayment Terms?
The Higher Education Amendments of 1992 renamed the Perkins Loan Program to Federal Perkins
Loan Program.
- Repayment begins six (6) months after the "Federal Perkins Loan Program: Direct
Loan" borrower ceases to be at least a half-time student at this institution or an
approved institution of higher education and nine (9) months for "Federal Perkins
Loan Program: Perkins Loan" borrower.
- Ten years is the normal maximum repayment period allowed.
- Five percent (5) per annum is the interest rate charge on the unpaid principal balance.
- Thirty dollars per month is the minimum repayment amount for "Federal Perkins Loan
Program: Perkins Loan/ Direct Loan" Forty dollars per month is minimum repayment
for funds received for the first time on or after October 1, 1992.
- Late fees of up to twenty percent (20 %) of the past due installment will accrue 30
days after each payment due date.
- Borrower is responsible for all collection agency fees, court costs, attorney fees and
other reasonable collection costs incurred in the collection of loans.
- The precise terms of repayment are specified in the promissory note, which will be provided
for you.
Are there Deferments?
Deferments for "Federal Perkins Loan Program: Perkins Loan and Direct Loan" borrowers:
Principal need not be paid and interest will not accrue. All deferments must be received
during the period for which they apply.
- While you are attending an approved institution of higher education as at least a half-time
student or as a regular student in a course of study in a graduate fellowship approved
by the Secretary.
- Grad or post-graduate fellowship supported outside the U.S.
- Enrolled in attendance in a course of study that is part of a rehabilitation-training
program for the disabled.
- For any period in which you are engaged in service eligible for cancellation.
- For a period not in excess of three (3) years during which:
- You are seeking and unable to find full-time employment.
- For any reason your institution determines has caused or will cause you to have
an economic hardship.
- An additional six (6) month grace period will be granted after the completion of any
period of deferment described above.
Is it possible to Cancel the Loan?
Cancellation for "Federal Perkins Loan Program: Perkins Loan and Direct Loan"
borrowers: a portion of the loan principal will be cancelled for each full year of service.
- Full-time teaching in an approved elementary or secondary school serving low-income
students.
- Full-time special education teaching including infants, toddlers, children or youth
with disabilities.
- Full-time professional provider of early intervention services in public or non-profit
program under public supervision.
- Full-time provider or supervision of services to high-risk children from low-income
communities and their families.
- Full-time staff members in a "Head Start" program under the Economic Opportunity
Act of 1964 for a full academic year.
- Full-time teacher of math, foreign languages, bilingual education or other field as
authorized by the Secretary.
- Nurse or medical technicians providing health care services.
- As a full-time law enforcement officer or corrections officer for service to local,
State or Federal law enforcement or correction agencies.
- Military service in an area that qualifies for special pay under Section 310 of Title
37 of the U.S. Code.
- Death or total permanent disability of the borrower.
- In addition to the above provisions, "Federal Perkins Loan Program: Perkins Loan"
borrowers are entitled to cancellation of their "Federal Perkins Loan Program: Perkins
Loan" for service as a volunteer under the Peace Corps or Action Programs.
Are There Teacher
Cancellation Provisions?
Borrowers performing teaching services might be eligible for cancellation credit that can
be applied toward payments of loan principal and accrued interest. A teacher is defined
as one who is a professional employee of a school or school system working on a full-time
basis and is devoted to providing classroom instruction or related services in support of
the education program.
Handicapped Students - Teacher working in classes where the majority of the students
are handicapped and in an institution providing elementary or secondary education as determined
by state law.
Low Income - Teachers or staff members serving in public or nonprofit private elementary
or secondary schools having high concentrations of students from low-income families. However,
the school in which teaching service is performed must be included in the listing of schools
having High Concentration of Students From Low-Income Families, which is published in the
Federal Register. (The High Concentrations of Student from Low-Income Families is a document
compiled each year by the federal government from lists submitted by the individual states
of schools designated by those states to have a high concentration of students from low-income
families. Each state, however, is given a quota of schools to be listed and not all schools
having high concentration of students from low-income families will be listed. Only those
schools listed will be considered for special cancellation benefits.)
Up to 100% of the student loan funds disbursed can be canceled for teaching service performed
as detailed above in the following increments:
- 15% for each of the first two years of teaching service.
- 20% for both the third and fourth years of such service.
- 30% for the fifth year of service.
Preschool - Full-time staff member in a preschool program carried under section 222(a)(1)
of the Economic Opportunity Act of 1964, as amended, that is operated for a period comparable
to a full school year. Employment must be in a full-time professional capacity to complete
the educational part of the program; the salary must not exceed the salary of a comparable
employee of the local education agency. Funds are eligible for cancellation for 15% of the
eligible funds for each year of service.
Are There Provisions for Military Cancellation?
Funds are eligible for cancellation at the rate of 12-1/2% per year each full year of military
service performed in an area of hostility (combat zone) after the funds are advanced. Maximum
must not exceed 50% of the eligible funds.
What About Forbearance?
Principal and interest or principal only will be deferred for a period not to exceed three
years if your annual loan repayment obligation equals or exceeds twenty (20) percent of
your gross income.
Can I Make a Payment in Advance?
Excess payments made on your loan apply to the accrued interest and principal of your loan
unless you designate it as an advance payment of your next installment.
What is the Minimum Payment?
"Federal Perkins Loan and Direct Loans" at the same or other institutions may
be combined for a monthly minimum repayment amount of $30.00 unless the combined loans at
$30.00 per month would not repay the loans in ten years. First-time borrowers after October
1, 1992 will pay a minimum of $40.00 per month.
What is Loan Default?
- Default is defined as failure to make an installment payment when due or comply with
other terms of the promissory note.
- Defaulting on a loan may result in the account being reported to a credit bureau organization,
sent to a collection agency, ineligibility for further financial aid, withdrawal of campus
services, suit being brought against you, offset of the debt against State Income Tax
Refund, Lottery and your account being turned over to the Federal government for collection.
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