The loan has a fixed 5% interest rate, which means its interest rate will not increase even if the program ends. Besides, some Perkins loan holders can enjoy discharge if there is a situation like death, bankruptcy, school closure, disability, etc. Perkins loan forgiveness is also available to the borrowers if they work as teachers or public servicers. This guide will focus more on what is a Perkins loan forgiveness program, its eligibility criteria, and other available options for the borrowers.
What Did Replace This Loan?
Before we dive into the Perkins loan forgiveness and discharge, we need to discuss what substituted this option. As mentioned before, with its long grace period and low-interest rates, the loan was one of the best options out there for students with financial difficulties. However, when it ended, no other program could be as good as the Perkins loans. There are still need-based loans such as Pell Grants, college aid awards, private and federal loans, or Federal Supplemental Educational Opportunity Grants(FSEOG).
As students who rely on Perkins loans are left with no replacing option, they need to find an alternative option. The first step of this process is filing the Free Application for Federal Student Aid(FAFSA). By filling it, students can be qualified for other student aid programs and direct loans. In short, FAFSA facilitates the Department of Education to check if you are qualifying for need-based programs, like grants or scholarships.
Alternatives to Perkins Loans
The most significant advantage of Pell Grants is that students do not need to repay it. It is a grant for undergraduates, and its amount can be as high as $6195 yearly. The numbers can change each year based on the updated information about the tax and family incomes. While this student aid sounds excellent, it does not benefit graduate students as Perkins loans did.
Another grant for students in need of financial aid is FSEOG. Similar to Pell Grants, it also benefits undergraduate students. People can receive up to $4000 per year, depending on their financial situation.
Students can also apply for scholarships or grants awarded by nonprofit organizations. Many of these institutions help people with financial difficulties. Hence, if applicants were eligible for Perkins loans, there is a high chance that they will qualify for such scholarships.
Other federal loans could be an alternative to Perkins loans. However, their interest rates are not as low as Perkins. On the positive side, it is much easier to be eligible. There exist many programs with different conditions, and you can find one that fits your specifications. Besides, direct loans provide income-based payment plans . Such plans make repayments more manageable after students start paying back their debts. Like Perkins loans, if you later qualify for the forgiveness, you can eliminate a portion of the loan or get rid of it completely. For Perkins loans holders, there also exist Perkins loan forgiveness programs to reduce their obligations. In short, students need to find the best available option coming after the Perkins loans. Researching all the possibilities can be helpful, but you can also contact the Student loan Resolved to select the best student aid program.
Perkins Loan Forgiveness Programs
The cancellation of Perkins loans was terrible news for students with financial challenges. However, the existence of Perkins loan forgiveness programs made the situation a little better. Perkins loan cancellation plan benefits borrowers depending on their employment type, volunteer service, and work duration. Meanwhile, discharge occurs in unexpected conditions, such as bankruptcy or death.