How does the perkins loan differ from the stafford loan? April 24, 2010
Posted by Credit in : Financial Aid , trackback
TwistedxKiss asked:
I qualified for like a $500 perkins loan as well as some stafford loans, and I spent all my financial aid researching time looking at stafford loans, so I don’t know much about the perkins loan. I looked it up and read that the two are similar, but how are they different?
I qualified for like a $500 perkins loan as well as some stafford loans, and I spent all my financial aid researching time looking at stafford loans, so I don’t know much about the perkins loan. I looked it up and read that the two are similar, but how are they different?
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The major difference between the Perkins loan and the Stafford loan is who makes the decision on who qualifies for the loan.
With the Stafford loan, anyone who qualifies based on regulations set by the U.S. Department of Education (ED), gets the loan. Lenders and schools may not create any additional criteria beyond what ED has set. The rules are exactly the same, no matter what school you attend, and what lender you borrow from.
With the Perkins loan, the federal government (ED) has given the individual schools a set amount of money, and some basic guidelines. In addition to that, regulations state that schools also have the authority to determine who qualifies for a Perkins at their school, and for how much.
As long as the school doesn’t violate any of the federal regulations, they have more autonomy on determining who gets a Perkins loan. Because of this autonomy, you could qualify for a Perkins loan at School A, but not necessarily at School B.
Another difference is that with Perkins, the school is the lender, so the school also does the collecting on the loans. This is different from Stafford. With Stafford loans, the bank/guarantor/ED is the lender and does the collecting on the loan.
Yet another difference, there are cancellation options for Perkins that do not apply to Stafford loans. These cancellation options are tied to the specific type of work you do once you leave school.
A bit more information on the Perkins loan can be found here: