What’s to Like About Perkins Loans if You’re a Physician Assistant Student
The federal government provides money to students through different loan programs. The most popular is the William D. Ford Direct Loan program but another is the Federal Perkins Loan Program.
What is a Perkins Loan
Perkins Loans are low interest rate loans given to students with exceptional need. They are given out by the school and not all schools participate in the program. This works by the government giving a certain amount of money to the school and the school determines who’s in need. The limits on Perkins Loans are less compared to Direct Loans and the amount you receive depends on your financial need and amount available at your school. When you pay it back you’re paying the school back, but usually the school uses a loan servicer to handle the loan payments.
Perkins Loan Cancellation
Besides having a low interest rate of 5%, Perkins Loans have different rules for cancellation. The current rules for forgiveness of direct loans allow you to have your loans forgiven after you have worked for a qualifying organization for 10 years. Perkins Loans may be cancelled for different reasons than direct loans, one of which is for work as a full-time nurse or medical technician and apparently the term “medical technician” is used fairly broadly as PAs fall under this category.
You can have up to 100% of your Perkins Loan cancelled if you are working and complete the appropriate paperwork. The cancellation occurs over five years, the first and second year 15% is cancelled, the third and fourth year 20% is cancelled and the fifth year 30% is cancelled.
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If you have Perkins Loans and want to take part in the cancellation program the best thing to do is to contact your school or the loan servicer and get the appropriate paperwork. It’s best to do this right after you graduate as you will want to defer payments and apply for cancellation as soon as you can.
The first year you can defer your payments and once you’ve worked for a full year you can apply for cancellation and have your payments deferred for the next year. After doing this for five years all of your Perkins Loans will be cancelled.
The school I attended uses ACS as a loan servicer and the form for ACS is here: Perkins Loan Cancellation Form. Your school may use a different servicer, in which case you would have a different form.
Max Out Perkins Loans Before Getting Other Loans
If you’re currently in school or just about to start and are needing student loans to help pay for your education you should speak with the financial aid office and request to get as much as you can in Perkins Loans due to the benefits of low interest and favorable cancellation program.
If you have Perkins Loans and are currently making payments you should contact your school or the loan servicer as soon as you can so you don’t continue to make unnecessary payments. Perkins Loans are just one of the many types of student loans, if you have student loans be sure to understand what the payment terms are on them and the different benefits so you don’t miss out on opportunities such as loan cancellation.
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