The Federal Perkins Loan is a low interest (5%) loan for both undergraduate and graduate students with exceptional financial need. The Federal Perkins Loan is issued through the school’s financial office. The school is the lender, so the loan needs to be repaid to the school. However the loan is made with government funds.
Undergraduate students with exceptional financial need can borrow $5,500 for each year of undergraduate study, up to a total of $25,500.
Graduate students with exceptional financial need can borrow $8,000 for each year of graduate study, up to a total of $60,000, which includes the amount received for undergraduate studies.
The Federal Perkins Loan needs to be repaid after graduation. There is a nine months grace period before payments start.
Direct Stafford Loan
Direct Stafford Loans are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.
Types of direct Stafford loans:
- Direct Subsidized Loans
Direct Subsidized Loans are for students with financial need. The school will review your results of your Free Application for Federal Student Aid (FAFSASM) and determine the amount you can borrow. You are not charged interest while you’re in school at least half-time and during grace periods and deferment periods.
- Direct Unsubsidized Loan
For this loan you are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, your school will determine the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan).