Perkins Loans are government backed, interest bearing loans disbursed by an institute of higher education, payable to the institution. The interest begins with the first payment 9 months after the borrower ceases to carry a half-time schedule. The monthly payment is determined by the amount loaned, with a minimum payment of $40, provided the loan is paid in full within 10 years. (Larger payments may be required to fulfill the 10 year limit.) The repayment period may be extended during periods of deferment, hardship or forbearance. Late charges - not to exceed 20% of the payment - may be added to the principal the day after the scheduled payment was due.
The institution may declare the loan in default if a) a scheduled payment is past due, b) documentation supporting qualification for a forbearance, deferment or cancellation is not submitted to the institution on or before the due date, or c) the terms and conditions of the Promissory Note are not met. Defaulted loans may be assigned to the Department of Education for collection or a collection agency. Any collection costs are to be paid by the borrower.
The Perkins Loan Promissory Note is a 4 page document and should be read in its entirety before the borrower accepts Perkins Loan funds.