Why Am I Not Eligible for a Perkins Loan?
- The Perkins Loan program works with some of the same criteria used for the Pell grant, including application with the FAFSA or Free Application for Federal Student Aid. Completion of this form is the gateway to federal and state assistance for college. Perkins loans are valid at only 1,800 colleges and universities nationwide, so you must attend a school that participates in the Perkins loan. If you chose a college or university not approved for the program, you will not receive a Perkins loan.
- A student is ineligible for a Perkins loan if he is behind on federal student loan payments. Students in medical internships or with residency status also are ineligible for Perkins loans. The government limits the total loan indebtedness a student may incur. That limit, as of 2010, is $4,000 for an undergraduate and $6,000 for a graduate student annually. There is also an aggregate maximum of $40,000 for a graduate student, $20,000 for an undergraduate with two years completed, and $8,000 for a student with less than two years of undergraduate work completed. A college can deny a Perkins loan for bad credit, and if a prior Perkins loan requires collection by garnishment or other involuntary means, the university can consider this unwillingness to repay and deny additional funds. The average Perkins loan was $2,125 as of 2009.
- Colleges must be uniform in selection criteria for Perkins loans, and procedures must be in writing. Schools must offer a reasonable proportion of loans to less-than-full-time students. Determining eligibility for Pell grants is a prerequisite to determining eligibility for a Perkins loan. If you are less than full time, you have a smaller chance for a Perkins loan, depending on the school's "reasonable proportion." If you have discharged a previous federal student loan in bankruptcy, the college can consider that in your credit history for a Perkins loan, but cannot deny you a loan exclusively on that basis.
- Students must sign a promissory note to repay the funds. This is a contract, and if the student does not sign, the college does not disburse the funds. Students receive counseling and a copy of the loan documents, evidencing the interest rate and the total amount of the loan. The university sends the payment information to a credit-reporting agency once a year. The student must attend class. Expulsion or withdrawal by a student prior to starting class creates an overpayment, and the college must retrieve the money to pay back the loan fund.