Perkins Loans 411

Perkins loans are great options for those students who are eligible. They have low interest rates and can be used for both undergraduate and graduate studies. But before you accept the loan, make sure you get all of the facts.

So, here’s what you can expect from a Perkins Loan. These loans are federally funded and only available to the students in highest need. They differ from other federal government loans in that they are dispersed through different lenders. While other federal loans are dispersed through the government, Perkins Loans are the only ones to come directly from your college.

For each year of school, students are allowed to take out up to $4,000 ($8,000 for graduate students). Typically, the loans are dispersed to you in two installments, one for each semester. The funds either get sent directly to you via check or applied directly to your school account.

Learn more about Perkins loans borrowing limits, interest rates and repayment at the StudentLoanNetwork.com.

Unfortunately, not all students will qualify for Perkins loans. So for these students, here are some other options.

One such option is searching for scholarships. While the the payout for scholarships is usually minimal when compared to the time spent applying, any little bit can help. Plus, unlike loans, scholarships never need to be repaid. To make it easy to keep track of scholarships and their deadlines, try keeping a spreadsheet so that you know which you’ve applied to and when to apply next. StudentScholarshipSearch.com is a great resource and makes it easy to help you find relevant scholarships; plus, there are new ones posted daily, because let’s face it, you’re busy enough being students.

If scholarships don’t pan out, then consider getting private student loans. While we typically tell students to exhaust all of their federal loan options first, getting a private loan can be a great option to cover the remainder of your expenses. Just like any other big financial decisions, it’s best to shop around before making your final choice, so make sure to compare your loan options as this can be incredibly beneficial.

So if your Perkins loans did not cover enough of your school expenses, then no worries, these other options can really help bridge the gap in your financial aid.

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In the News: Pell Grant Funding

It may have come to your attention that because of the federal defecit, legislation was in the works to cut funding for federal Pell Grants. When the Department of Defense and Full-Year Continuing Appropriations Act was signed by President Obama, Pell Grants were among the programs to receive cuts, but luckily, not to the extent of other departments.

Overall, the Department of Education saw a cut of $1.3 billion, not substantial compared to the $38 billion in cuts the bill passed overall. Still, Pell Grant maximums remain at $5,550; however, students are now only able to receive one Pell Grant per calendar year (and possibly one for summer courses if eligible) whereas the old regulations allowed two grants per year. As always, the grants remain need-based and available to students who show the most need.

One stipulation of these changes is that students must be able to show academic progression. What does this mean? In order to be eligible for up to 2 Pell Grants in the calendar year, students must have accumulated at least 24 credit hours throughout the Fall 2010 and Spring 2011 semesters, or, if taking summer courses, by the end of the summer semester.

While so far, these have been the only cuts, the House of Representatives has drafted a bill that would cut Pell Grant funding drastically, should it be passed. It is currently being reviewed by the Senate, who will then make suggestions (hopefully decreasing Pell Grant cuts!)

After these recent changes, should you find yourself short on money, you can look into getting a private student loan. While it is best to exhaust all federal options first, getting a private loan can help with a lot of added expenses like books, housing, and fees.

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