Perkins Loan Availability Fading


April 3, 2008
by Scholarships.com Staff
The credit crunch and its negative impact on student borrowers is no longer news.   Both FFEL and private lenders have been responsible for financial tensions, and now there’s more to gripe about. Numerous colleges have been complaining that they are not receiving sufficient funding to cover their students' Perkins Loan needs.

The credit crunch and its negative impact on student borrowers is no longer news.   Both FFEL and private lenders have been responsible for financial tensions, and now there’s more to gripe about. Numerous colleges have been complaining that they are not receiving sufficient funding to cover their students' Perkins Loan needs.

Perkins Loans are awarded to students by colleges and universities, but the government provides much of the funding. Because these loans are restricted to students who show particular financial need, shortages will affect students whose families have the lowest incomes most.  Perkins Loans have the cheapest interest rates and the most lenient payment options as far as government loans go, as far as most student loans go. Students are asked to pay a 5 percent interest rate on Perkins Loans as opposed to 6.8-7.22 percent on federal Stafford Loans and 7.9-8.5 percent on federal PLUS Loans. Those who turn to private lenders can expect even higher rates.

Due to a poor loan market and a lack of government subsidies, many schools have been forced to cut back on both the number and the size of their Perkins Loans. According to U.S. News & World Report estimates, about 50,000 students who would have qualified for Perkins Loans last year will not qualify for them this year.  Those who do qualify may still see their loan limits diminish. Technically, students can borrow up to $4,000 in Perkins Loans (though the number may be lower for those deemed less needy), but certain colleges will be decreasing the maximum funds available to students. 

This has left families worried that they may be forced to rely on private student loans after reaching their federal loan limits.  After dealing with increasing default rates, both Federal Family Education Loan (FFEL) lenders and private lenders have been forced to make loans more difficult to receive and less appealing to borrowers. Major lenders are becoming sticklers about eligibility criteria and have been cutting back on the benefits offered to students with good paying records.  

Students who are no longer eligible for Perkins Loans still have financial aid opportunities. By applying for college scholarships and grants, students may find college funding they do not have to repay. Before considering loans, students should conduct a free college scholarship search to find awards they may be eligible to receive. It is also important to fill out a FAFSA each year. Just because an individual is not eligible for Perkins Loans does not mean they will not be awarded free money in the form of Pell, FSEOG, SMART or TEACH grants.

College is expensive, Scholarships.com is completely free. Pay for your college education with as much free college scholarship money as possible. By applying to all the awards you qualify for, you can be sure to not miss a single opportunity in paying for your college expenses - including tuition, fees, room and board. Get matched to college scholarships instantly and start applying today by conducting a free college scholarship search at Scholarships.com.

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 

    When it comes to earning scholarships for college, some students have the go big or go home mentality and chase the big buck scholarship opportunities. Landing a huge scholarship may take more work - meaning more time spent on the application process and essays, needing strong recommendation letters and competing against a pool of highly-qualified students. If you're motivated to land a large dollar scholarship that can potentially pay for your entire college tuition, check out these generously-endowed scholarships:

Large Dollar Scholarships

June 23, 2017 11:01 AM
by Susan Dutca
When it comes to earning scholarships for college, some students have the "go big or go home" mentality and chase the big buck scholarship opportunities. Landing a huge scholarship may take

    Everyone knows big-name companies such as Google or Coca-Cola...but did you know that these companies also offer scholarship opportunities to help you pay for college? That's right! If you love these quality products and services, you may be interested these generously-endowed scholarships. Check out this list of brand name scholarships offered by the companies with which you are most familiar:

Brand Name Scholarships

June 22, 2017 2:44 PM
by Susan Dutca
Everyone knows big-name companies such as Google or Coca-Cola...but did you know that these companies also offer scholarship opportunities to help you pay for college? That's right! If you love

    Independence Day, also known as the Fourth of July, is the day in which we celebrate America's independence and freedom. Education has been, and will always be a great equalizer. Even though college can be expensive, it is still a fast track towards the American Dream and can be more easily attained with the help of financial aid in the form of grants and scholarships - which do not have to be repaid! Exercise your freedom this July and help make your college education dreams more affordable with these red, white and blue July 2017 scholarships:

July 2017 Summer Scholarships

June 22, 2017 11:43 AM
by Susan Dutca
Independence Day, also known as the Fourth of July, is the day in which we celebrate America's independence and freedom. Education has been, and will always be a great equalizer. Even though
POTUS Donald Trump is pushing for apprenticeship programs and intends to support the initiative with an apprenticeship grant program of up to $200 million, with special emphasis on industries such as information technology,  healthcare, and manufacturing. The college alternative initiative hopes to attract and prepare students for great careers that do not require a four-year degree or the massive debt that often comes with those four-year degrees and even two-year degrees.

POTUS Pushing Apprenticeship Programs, Grants in 2017

June 14, 2017 11:16 AM
by Susan Dutca
POTUS Donald Trump is pushing for apprenticeship programs and intends to support the initiative with an apprenticeship grant program of up to $200 million, with special emphasis on industries such as

    Summer is finally here and fall semester may be the last thing on your mind right now. However, you may be one of the many students who need to work a summer gig, save up, or rely on your parents and student loans to help foot your fall tuition bill. While those are all legitimate options, you now have more free time (and less homework and tests), so why not take advantage of these summer scholarships? It's not too late to earn free college scholarships to help pay for school. Use your downtime wisely by applying for these summer 2017 scholarships!:

Summer 2017 Scholarships

June 2, 2017 3:47 PM
by Susan Dutca
Summer is finally here and fall semester may be the last thing on your mind right now. However, you may be one of the many students who need to work a summer gig, save up, or rely on your

    In support of lesbian, gay, bisexual, transgender, queer (LGTBQ) Pride Month this June, Scholarships.com is adding more color to its themed scholarships with scholarships for LGBTQ students and allies. Scholarships.com is dedicated to bringing equal financial aid and free college scholarship opportunities for all students.

LGBT Scholarships for Pride Month 2017

June 1, 2017 11:42 AM
by Susan Dutca
In support of lesbian, gay, bisexual, transgender, queer (LGTBQ) Pride Month this June, Scholarships.com is adding more color to its themed scholarships with scholarships for LGBTQ students and