Perkins Loan cancelled: what this means for students with financial aid
The federal Perkins Loan program has ended — at least for now. No new loans will be offered after Oct. 1, 2015. Here's what this means for you.
What's a Perkins Loan?
The Perkins Loan is one of many federal student loans for college students who demonstrate financial need. It is a subsidized student loan that has a fixed interest rate of 5 percent. Undergraduate students are eligible to receive up to $5,500 a year, while graduates and professional students can receive up to $8,000 a year.
It all boils down to budgeting priorities. Federal contributions to the Perkins Loan ended in 2010 because Congress determined that other federal student loans were capable of meeting students' financial needs.
What does this mean for current Perkins Loan holders?
- Students who were awarded the Perkins Loan for the 2015-2016 academic year will still receive funds, but not beyond the 2015-2016 academic year.
- Those who were lucky enough to receive the loan for the 2014-2015 academic year, or prior, are subject to grandfathering. This means that since the award was received before the decision was made to end the program, benefits will continue until degree completion, up to five years.
What’s next for the Perkins Loan?
The cancellation of the Perkins Loan has jump-started a much-needed conversation about how to make improvements to the program and may lead to the creation of an enhanced, unsubsidized Perkins Loan.
Other ways to pay for school
Make sure you're fiscally educated and taking advantage of all the financial aid options available by staying up to date and checking with your financial aid office at least every year. The more you know, the less painful it will be when the time comes for paying back your student loans.
About the author
Mackinna is currently a student at Belmont University studying music business. She is also a firm believer that a spoonful of Nutella can solve any problem. She loves to express her creativity through prose, poetry, and songwriting.