The Future of the Federal Perkins Loan is in Doubt
The Federal Perkins Loan has been a standard option for students looking for college financial aid for decades. But now, the program is slated to be cancelled this year due to government regulation issues.
The Perkins Loan is a governmental program. While a student is in school, interest does not begin to accrue until they begin making payments toward the loan after graduation or decide to leave school. The loan is interest free for nine months, no matter how the student leaves school. The Perkins Loan has a locked 5% interest rate. This differs from the Federal Stafford Loan, which offers subsidized and unsubsidized rates, depending on the student.
College financial aid managers have demanded an explanation regarding the status of the Perkins Loan program. Department of Postsecondary Education Secretary, Lynn B. Mahaffie, has responded that the loan program technically ended in 2014. The program was extended for one year for the government to decide the loan program’s final fate. As of now, no new applications are being taken. Only those students who have applied before can be considered for the Perkins Loan.
If the Perkins Loan is not continued, an important source of affordable financial college aid will disappear. College financial aid officers, students and parents are hoping this doesn’t happen and are watching the developments closely.