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A Federal Perkins Loan Program is a long-term loan with a low interest of 5 percent to students with exceptional financial need. The school determines which students have the greatest need. The loan is for both undergraduate and graduate students.

Under the program, this type of loan is made through a school’s financial aid office. The school acts as the lender, and the loan is made with government funds. The U.S. Department of Education provides a programmed amount of funding to the school and the school adds some of its own funds for the loans. In order to apply for this program, you must fill out and submit the Free Application for Federal Student Aid (FAFSA).

You also must meet the following requirements:

• Enrollment in an eligible school at least half-time in a degree program

• U.S. citizenship, permanent residency, or eligible non-citizen status

• Satisfactory academic progress

• No unresolved defaults or overpayments owed on Title IV education loans and grants

• Satisfaction of all Selective Service requirements

If you are an undergraduate student, you may borrow up to $4,000 a year with a total maximum of $20,000 borrowed during your undergraduate years. If you are a graduate student or in your professional studies, you may borrow up to $6,000 a year and a total amount of $40,00 borrowed in both undergraduate and graduate schools.

The actual amount that you will receive depends upon your financial need and the school’s level of funding. It is best to check with your school to find out more in that area.

You will receive your loan through your school. The school will either give you a check or credit your personal student account. Most likely the loan will be divided into two payments, unless the loan is for a very small amount.

Unlike other federal student loans, Perkins loan borrowers do not have to pay origination or insurance fees. Perkins loans share many same characteristics of the Stafford loans. However, the two mains differences are no fees and a longer grace period.

Payments on your Perkins loan begin nine months after you graduate or leave school. If you serve in the military, repayment assistance may be available. How much you pay back each month will depend on how much you borrowed and how long you have to repay your loan.

You may be allowed up to ten years to repay the loan in full. Under certain circumstances you can receive a deferment on your loan. During a deferment, no payment is required and interest does not accrue.

A Perkins loan can also be canceled under certain circumstances, such as your death or a total and permanent disability. You also might qualify for having your loan canceled because of the type of work you have chosen once you leave school.

There are often several unanswered questions such as: Can I postpone my loan payment by receiving a deferment of what type, what will be the exact amount of my monthly repayment bill, what if I need to stop school for awhile due to family issues, etc.? Check with your college or career school you plan to attend for their personal answers.