Repaying Perkins Loans

For a Perkins Loan, you have a nine-month grace period after you leave school or drop below half time. After the grace period, you need to begin making on-time monthly payments. Unlike some other Federal loans, the Perkins Loan does not have a variety of repayment plans. Rather, the amount of each monthly payment is based on the loan amount and the repayment period, which is generally 10 years.

Here are some typical monthly payments for a ten-year Perkins Loan repayment:

• If you borrowed a total of $4,000, you would pay $42.43 per month.
• If you borrowed $5,000, you would pay $53.03 per month.
• If you borrowed $15,000, you would pay $159.10 per month.

Canceling Perkins Loans
Loan cancellation may be available to graduates who take jobs in nursing, teaching, special education, or law enforcement. Cancellation may also be available if you join the armed forces or the Peace Corps after graduation. Ask your financial aid office for specific details on these options.

Financial Difficulty
If you have difficulty making your monthly payments, contact your lender before defaulting on your loan. In some cases, you might be eligible for an income-based deferment or forbearance to decrease or postpone your payments while you get back on your feet. Deferment may also be available while you attend graduate school. If you've applied for a deferment or forbearance, remember that you must continue making payments until your application has been approved.

Setting Payment Priorities
In general, it's better to pay off your highest interest debts as quickly as you can. If you have multiple student loans with a variety of interest rates, a consolidation loan can merge your loans into one loan with one payment and interest rate. The result is often a lower monthly payment, and money saved in the long term.

Graduation is a great time to create a new budget. By exploring your repayment options early, you can save yourself money as you build credit for the future.