Are you considering applying for federal financial aid? If so, you might have heard of the Perkins loan program. Perkins loans are government-backed, low-interest loans that are meant to help students pay for school. They come with a lot of great perks, including the opportunity for loan cancellation (that's exactly what it sounds like it is - imagine taking out a loan for school, and not having to pay it back).
If you've already checked out our guide to Perkins loans and want to get one for yourself, you've come to the right place. Read on for easy to follow instructions on exactly how to apply for a federal Perkins loan.
The Basics of Applying for Perkins Loans
There's no dedicated or separate application for the Perkins loan; instead, you apply by submitting a Free Application for Federal Student Aid, or FAFSA. The good news is that even if you're not eligible for a Perkins loan, you're opening up other opportunities for financial aid by submitting a FAFSA. You'll automatically be considered for any federal aid programs; schools and private scholarships can also use information from this application to award funds.
There's no fee required to submit this application, and turnaround is pretty fast; you should receive a report detailing your eligibility for certain federal aid programs in about 3 days if you submit the FAFSA online. You'll quickly learn whether you'll be awarded the Pell grant, for example, or whether you're eligible to take out Direct Subsidized loans. Because financial eligibility requirements for Perkins loans vary from school to school, you won't learn about your Perkins eligibility until your school sends you a financial aid package.
In general, Perkins loans are awarded to students who demonstrate exceptional financial need. Unfortunately, demonstrating this financial need doesn't necessarily guarantee that you'll receive the loan, but I'll discuss strategies for increasing your chances later in this post. The eligibility requirements are therefore a bit strict, but the loans themselves are flexible and come with some serious perks:
- Borrowers are given a 9 month grace period, whereas other federal loans come with a 6 month grace period.
- Borrowers who take jobs in community service after graduation are often eligible for loan cancellation (check out our guide here).
- Competitive interest rates; Perkins loan interest rates = 5%, whereas many private student loans can come with interest rates that are twice as high.
Sounds pretty good, right? If you're thinking that you have nothing to lose by applying for a Perkins loan, you're right. In the next sections, I'll detail the steps you need to take to submit your best loan application.
How to Apply
Step 1: Check Whether Your School Participates in the Perkins Loan Program
Although Perkins Loans are government-backed, your school would technically be your Perkins Loan lender. Fewer schools participate in the Perkins Loan program than in some other federal loan programs.
You can check with your school’s financial aid office to figure out whether they offer Perkins loans. You can also ask what their financial eligibility requirements are. This might give you a better idea of your chances before you submit your FAFSA.
Step 2: Check Your Timeline for Submitting the FAFSA
There are a few different deadlines you should be aware of: federal and state. The only deadline that matters specifically for the Perkins Loan specifically is the federal one, although if you’re submitting the FAFSA at this deadline, there may not be any Perkins funding left for you.
The deadline for federal funding for the 2015-2016 school year is June 30, 2016. You may be able to get federal aid even after you’ve finished your year at school (if you’re a current college student), so it could be worth your while to apply later on even if you’re too late to get the Perkins. Different states (if you also want to be considered for state funding) have different deadlines for applying for student aid: check the deadline for your state here.
Schools use information from the FAFSA to put together financial aid packages. Like I mentioned above, you won't actually learn whether you can take out a Perkins loan until you've received this financial aid package. You can submit your FAFSA as early as January 1 for the year you’re entering school. Current college students typically submit their FAFSAs early in their spring semesters for the next academic year.
It’s easy to put off completing the FAFSA until the federal or state deadline - don’t do this! Perkins money tends to run out quickly because each participating school has a finite Perkins budget - it's first come, first serve. Plan on applying as early in the year as possible (January or February). You won’t have that year’s tax information yet, but that’s ok - you can submit estimates and amend those numbers later as needed. That way, schools will have your FAFSA information on hand once you're accepted.
The early bird gets the Perkins loan.
Step 3: Gather All the Information You Need to Complete the Application
Although gathering this information isn't necessarily hard, it can be the most tedious part of the application process. Keep in mind that you'll also need to meet all basic federal aid requirements in order to submit a FAFSA (you can read more about that here).
Here's all the information you'll need to fill out an application:
- Your Social Security Number
- Your Alien Registration Number (if you're not a US citizen)
- Your most recent federal income tax returns, W-2s, and other records of income
- Bank statements and investment records (if applicable)
- Records of untaxed income (if applicable)
- An FSA ID to sign electronically (if you're submitting your FAFSA online). You can create a FSA ID here.
You'll also need all the above information from your parents, even if they won't be helping you pay for school. Your parents’ financial information is considered when determining how much aid you may be eligible for - here’s some more specific information:
- If your parents are married, gather info for both of them.
- If your parent is widowed or single, you just need the financial information for that one parent.
- If your widowed parent is currently remarried, you need info for your parent + his/her spouse.
- If your parents are divorced or separated, you need information for your custodial parent (the parent you lived with the most in the past year). If your parents have joint custody, and you’ve spent equal time with them, you need info for the parent who’s supported you the most financially.
If you think your circumstances warrant a what’s called a “dependency override,” where your parents’ financial info is not taken into account (meaning you would likely get more aid), you will also need to gather all documentation around your special circumstances (that is, any documentation that would support your claims).
Common overrides include age, marriage, kids, homelessness, military service, foster care, or legal emancipation.
- Answer questions about these circumstances honestly on your FAFSA - the application will process as incomplete, and you’ll need to follow up with the financial aid office of the school you’re seeking an aid package from.
Step 4: Choose Your Submission Method
You can choose to submit either an electronic or paper version of the FAFSA. I recommend that you submit an electronic version, but here are instructions for both methods of submission so that you can make a decision that's right for you:
- It’s generally easier to submit online than it is to send in a paper application. The form can be submitted electronically here.
- If you plan to submit online, apply for a FSA ID for you and your parents first! You need a FSA to sign the FAFSA electronically - it can take up to 3 days to get the ID via email, so build this into your timeline.
- The electronic FAFSA tends to guide you through the application process faster, and can you notify you about certain errors.
- Electronic submission will get you faster “results” - you’ll receive your SAR, or Student Aid Report (document which tells you about your eligibility for federal student aid), in about 3 days.
You can get a paper copy of the FAFSA at high school guidance offices, college financial aid offices, and many libraries. You can also download and print the application yourself here.
Paper FAFSAs are a bit more cumbersome than the electronic version, take the longest to file (it can take weeks to get your SAR back), and lead applicants to make more mistakes, which will delay your application process. This is not a good option for you if you're tight on time.
Step 5: If Possible, Set a Time With Your Parents to Complete the FAFSA
Once you've gathered all relevant information and chosen your submission method, you'll need to plan some time to sit down and actually complete the application. As I mentioned earlier, you'll need quite a bit of information from your parents or guardians - the form will be much easier to complete if you can sit down with them, going through each section together. Plan on spending 1-2 hours on filling out the application.
A little extra help from the 'rents makes the application process faster and easier.
Step 6: After You Submit
Within 3-5 days, you will receive an email with directions to access your Student Aid Report. The colleges you listed on your FAFSA will have access to your SAR shortly after you do. You can check the status of your application by calling the Federal Student Aid Information Center (1.800.433.3243), or by logging into the Department of Ed website with your FSA ID.
If your application was complete, your school should be able to use your Student Aid Report to generate a financial aid offer, which can include grants, loans, and scholarships. If you are offered a Perkins Loan, it will be included in this financial aid offer.
Your school has the ultimate say in whether you get the Perkins Loan. Financial eligibility does not guarantee that you’ll receive the loan. Schools with better funding, or with better financial aid programs, may be able to offer more Perkins loans.
If You're Offered a Perkins Loan, Should You Take It?
So you've gone through all this work to apply for federal financial aid, and your school offers you a Perkins loan in your financial aid package. You can choose to take the loan, or you can refuse the aid. What do you do?
First, you should avoid taking on any debt if you have other ways to cover your school's cost of attendance (like grants or scholarships, for example). Perkins loans are great financial tools, but as with any loan, you'll end up paying back more money than you originally borrowed due to interest (if you don't get 100% of your loan canceled, that is). To learn more about cost of attendance and budgeting out college expenses, check out our college cost guide.
If you've determined that you need to take out loans to help pay for school, the Perkins loan could be a great option for you, particularly if you're planning on working in public service after you graduate. Working in certain fields qualifies Perkins loan borrowers for loan cancellation - you could potentially get up to 100% of your loan canceled, which means you wouldn't end up paying a dime. You can read more about Perkins loan cancellation here.
If you're choosing between a Perkins loan and another loan, the Perkins loan will almost always be the better financial option. Interest rates are low, as I mentioned earlier in this post, and no interest accrues while you're in school or for 9 months after you leave. As a result, you'll end up paying less in the long run.
All in all, Perkins loans are great options for students who need loans to help finance their educations. They're particularly good options for students who are interested in public service. It's hard to go wrong with a Perkins loan!
If you're researching Perkins loans, you should definitely learn more about other federal financial aid programs as well. Check out our guides on the Pell Grant, Direct Subsidized loan, and Direct Unsubsidized loan.
Want to improve your SAT score by 160 points or your ACT score by 4 points? We've written a guide for each test about the top 5 strategies you must be using to have a shot at improving your score. Download it for free now:
Have friends who also need help with test prep? Share this article!
Francesca graduated magna cum laude from Harvard and scored in the 99th percentile on the SATs. She's worked with many students on SAT prep and college counseling, and loves helping students capitalize on their strengths.