February 4, 2010 | Adam Sorensen | Leave a comment If individuals are interested in starting or finishing their college education but are worried about paying for it, then the Perkins Loan is a great option. It is the second most popular kind of low-cost student loan provided by the U.S. government. These low-interest loans are given to help students that are needy; finance their college education. Not all students will qualify and receive the loan, but it’s worth a try. There are approximately 1,800 participating institutions located throughout the country that offer Perkins Loans. Requirements Before students even fill out the FAFSA form they need to make sure that they fit the following criteria. In order for students to be eligible they must enroll in an eligible institution at least half-time in a degree program and they must be a U.S. citizen, permanent resident or eligible non-citizen. Students must also be doing well academically and have no unresolved defaults or overpayments owed on Title IV education loans and grants. Eligibility The United States government funds this type of financial assistance, so in order for students to qualify they must fill gather all of the necessary information and fill out the FAFSA form. Then the schools will determine the Expected Family Contribution (EFC). The EFC is the sum of a percentage of net income and net assets. Disbursement The money goes directly from the US government to the schools. Then the schools use the application and EFCï¿½s in order to determine the students need and then the financial aid administrators determine which students have the greatest needs. Then after the loan is determined and approved the school distributes the funds directly to your loan but they come in at least two separate payments. And the benefit of the Perkins Loan over the Stafford is that there are no fees, a longer grace period, and school disbursement. Amounts The loans come with a 5% interest rate, which is actually lower than those offered with the Stafford Loan. Approved students can borrow up to $4,000 for each year of undergraduate study, but the total borrowed cannot exceed $27,500. Graduate students on the other hand can borrow up to $8,000 for graduate or professional study per year with a maximum total loan amount of $60,000. But financial aid administrators also have a say in determining the amount of the Perkins loan to award to students enrolled in an accepted program. Repayment Because of the differing amounts students borrow, the payments vary but they can begin at $42.43 per month on a $4,000 loan. However, payments for a $15,000 loan equal $159.10 a month. Payment amounts differ but they are all based on a 10-year period. And if individuals are unable to make the payments and they meet certain conditions the loan may be postponed, but the institution must change the status of their loan to ï¿½defermentï¿½ or ï¿½forbearanceï¿½ before the student may stop making payments on the loan.