Explore What Perkins Loan Program Extension Means for Students

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Education loans
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Explore What Perkins Loan Program Extension Means
for Students
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• It looks like the Perkins loan still has some
  life left in it after all.
• Right before the holidays, President Barack Obama
  signed bipartisan-backed legislation to extend
  the recently expired Perkins loan program.
  Congress had initially allowed the program to
  lapse a few months ago, but the recent deal keeps
  Perkins breathing at least for now.
• The new legislation is a mixed bag of good and
  bad news for student loan consumers.
• But the bad news is after that point, no new
  Perkins loans will be issued not even for
  existing Perkins borrowers.

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• As of Oct. 1, 2015, schools have been prohibited
  from making new Perkins loans to students who had
  not received a Perkins loan prior to Oct. 1,
  2014.
• However, existing Perkins borrowers were
  grandfathered in and could continue receiving new
  funds until they completed the program at their
  existing school, even though the program had
  technically expired.

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• The new plan eliminates this grandfathering
  provision, and it also places further eligibility
  restrictions on graduate students in particular.
• These students will only be eligible to receive
  new Perkins loans through September 2016 if they
  already have an existing Perkins loan.

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• That could mean higher borrowing costs for
  students. The Stafford loan currently has a 4.29
  interest rate, lower than the Perkins' fixed
  interest rate of 5 percent.
• However, the Stafford rate is reset each July 1
  and can rise as high as 8.25 percent.
• Also, the government pays all interest on the
  Perkins loan while the borrower is in school, in
  the grace period or during periods of deferment.
• Borrowers of the unsubsidized Stafford, on the
  other hand, are responsible for the interest from
  the time of disbursement.

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• One other ?bit of good news Perkins borrowers,
  both existing and through 2017, won't have to
  worry about any changes to repayment terms.
  They'll continue to be eligible for more
  forgiving repayment options ?than any other
  federal education loans.
• Source bit.ly/1PipW0d

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