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SALISBURY UNIVERSITY

Financial Aid Office

Federal Carl Perkins Loan (FCPL)

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This program provides up to $4,000 on a loan basis to undergraduate students who are enrolled fulltime and have demonstrated exceptional financial need. There is no interest charge on this loan as long as the borrower continues in at least a halftime student status. Repayment begins nine months after graduation or withdrawal from school. Students may be allowed up to 10 years to repay the loan, based on the amount borrowed. The interest rate is 5 percent per annum on the unpaid balance. Repayment may be deferred while students are enrolled on at least a half-time basis or serving in the military, Peace Corps or VISTA. Special education teachers and teachers in designated economically deprived areas may receive up to 100 percent cancellation for teaching over a period of five years. A borrower who is temporarily disabled, or whose spouse is temporarily totally disabled and requires the borrower's care, may defer payments for up to three years.

Federal Perkins Loan Program Disclosures

1. Notice and explanation regarding the end to future availability of loans from the Federal Perkins Loan program:

Per the changes in the Extension Act, effective December 18, 2015, schools participating in the Perkins Loan Program may make Perkins Loans as specified below; however, all Federal Perkins loans are scheduled to end after the 2017-2018 academic year:

  • A school may make Perkins Loans through: September 30, 2017
  • A school may make Perkins Loans to an: Eligible current undergraduate student who, on the date of disbursement has an outstanding balance on a Perkins Loan made by the school, if the school has awarded the student all Direct Subsidized Loan aid for which the student is eligible.
  • A school may make Perkins Loans to an: Eligible new undergraduate student who, on the date of disbursement does not have an outstanding balance on a Perkins Loan made by the school, if the school has awarded the student all Direct Subsidized Loan and Unsubsidized Loan aid for which the student is eligible.

Notes:
Awarding Direct Subsidized and Unsubsidized Stafford Loans - An undergraduate student who was awarded a Direct Subsidized Loan and/or a Direct Unsubsidized Loan can decline one or both of the loans (or request a lesser amount). However, the student’s Direct Loan eligibility amounts must be included in the calculation of the undergraduate student’s Perkins Loan amount, regardless of whether they actually borrow that full amount.

Perkins Loans That Have Been Consolidated - When a Perkins Loan is consolidated it is paid in full by the Consolidation Loan. An undergraduate student who has consolidated his or her Perkins Loans does not have an outstanding balance on a Perkins Loan, and is therefore treated as a new undergraduate student.

Subsequent Disbursements for Undergraduate Students - If an eligible undergraduate student borrower receives a disbursement of a Perkins Loan after June 30, 2017, and before October 1, 2017 for the 2017-2018 award year, the student may receive any subsequent disbursements of that Perkins Loan.

2. Notice and explanation that repayment and forgiveness benefits available to Federal Direct Loan borrowers are not available to Federal Perkins Loan borrowers:

While Federal Direct Loan borrowers may be eligible for special income driven repayment options (such as Pay As You Earn or PAYE; and/or the new Revised Pay As You Earn or REPAYE; and/or the new Income Based Repayment or IBR options), such repayment options ARE NOT available to Federal Perkins Loan borrowers. However, if a borrower’s Federal Perkins Loan is consolidated into a Federal Direct Consolidation Loan, then some of these repayment options may become available.

Also, eligible Federal Direct Loan borrowers currently are able to be considered for Public Service Loan Forgiveness if they meet all qualifying requirements, but this forgiveness is NOT available to Federal Perkins Loan borrowers. However, if a borrower’s Federal Perkins Loan is consolidated into a Federal Direct Consolidation Loan, then this loan forgiveness may become available.

3. Notice and explanation regarding a Federal Perkins borrower's option to consolidate a Federal Perkins Loan into a Federal Direct Consolidation Loan, including any benfit of consolidation.

While Federal Direct Loan borrowers may be eligible for special income driven repayment options (such as Pay As You Earn or PAYE; and/or the new Revised Pay As You Earn or REPAYE; and/or the new Income Based Repayment or IBR options), such repayment options ARE NOT available to Federal Perkins Loan borrowers. However, if a borrower’s Federal Perkins Loan is consolidated into a Federal Direct Consolidation Loan, then some of these repayment options may become available.

Detailed information on how a borrower can go about consolidating an existing Federal Perkins Loan is available at www.studentloans.gov . The benefits of consolidating your Perkins Loan include the ability to gain access to various special income driven repayment options, and to also maximize the your level of Federal student loans that might be eligible for the public service loan forgiveness benefit.

4. For current undergraduate borrowers (as described above) AND/OR for new undergraduate borrowers (as also described above), a notice and explanation providing a comparison of the interest rates of Perkins Loans and Direct Loans, and informing the borrower that the borrower has reached the maximum annual borrowing limit for Direct Subsidized Loans for which the borrower is eligible.

The interest rate on the Federal Perkins Loan program is currently fixed at 5.00%.

In comparison, the interest rate on Federal Direct Loans is governed by current law (The Bipartisan Student Loan Certainty Act of 2013) which states that the interest rate on Federal Direct Loans will be based on the high yield of the 10-year Treasury note at the final auction held prior to June 1 preceding the July 1 of the year for which the interest rate will be effective, PLUS a statutorily defined "add-on," subject to an interest rate cap, and that the loan will be a fixed-rate loan.

For the 2016-2017 academic year, the interest rates on the various Federal Direct Loan programs are as follows:

  • Direct Subsidized and/or Unsubsidized Loans for undergraduate students: 3.76%

Learn more on StudentAid.gov

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