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Frequently Asked Questionsfor Perkins Loans
Perkins Loans are a federally funded loan much like the Stafford Loans or Direct Loans. However, the Perkins fund is much smaller, and is held by each school that participates in the program. As money is repaid by borrowers who have left school, the fund grows and is able to loan to new borrowers. How do I apply for a Perkins Loan? You do not make an actual application for this loan. Perkins Loans are based on need, like some other financial aid that is offered. The Financial Aid Office uses the information you provide in your FAFSA to decide what your need is for that year. Based on that information, Financial Aid decides whether or not you are eligible for a Perkins Loan that year. Once need is established, the Perkins fund is awarded on a first come, first served basis. Keep in mind the fund has a limited amount to lend each year and once the money has been awarded for a particular year, no more can be awarded until it has either been turned down by a prospective borrower or a prospective borrower is not eligible for the loan. The Financial Aid Office makes the awarding decisions. The Office of Business Operations handles your loan once you have accepted it. Lending limits are set by both the year and a cumulative amount. Each year an undergrad can borrow up to $4,000 and a graduate student up to $6,000. The total cumulative limits are $20,000 for an undergrad who has completed two academic years towards a BA, $40,000 for a graduate student, and $8,000 for any student who has not completed two academic years of undergraduate work. The interest rate is 5% and is a fixed rate – it will not change over the life of your loan like a variable rate does. The University of Northern Iowa is your Lender. Our contact information is:
UNI Perkins Loans How and where do I sign my promissory note? As of March 2004, we started using electronic promissory notes. When you are awarded by the Financial Aid Office, your award letter will give you a link to the first page of the promissory note screens. Or, you can access it from this web site, or you can just go to www.ecsi.net and click on Are You a Student, then on University of Northern Iowa, and you will be taken to the first page of the promissory note screens. You will need your Department of Education pin number, sometimes called your FAFSA pin number, before you start. This number is used to authenticate that it is you and not someone else signing your promissory note. If you do not have, or cannot find that pin number, go to www.pin.ed.gov and you can have it mailed or e-mailed to you. If it is absolutely impossible for you to do your promissory note on-line, you may come to our office to discuss other options. Can I view my account on the web? Yes. We update your loan information nightly with ECSI and they post the information to the website. Your payments, forms that have been processed here at UNI, and any adjustments made are included. Their website is www.ecsi.net. They are the company that wrote the software we use to service the Perkins Loan program and maintain a state of the art website for your convenience. You will be able to view your account balance, update your address, request a payment be drawn from your bank account, print off forms, pay by credit card, view your 1098-E (interest paid for a particular year), do your exit, sign your promissory note, or link to many other education web sites. You will need a pin number to access your account. Your 5 digit pin number is given to you on the last page of your electronically signed promissory note, it is printed on your Final Truth in Lending when you do your exit, and is printed on every bill, coupon, or grace notice we send to you after you leave UNI. How do I do my exit interview? If you are graduating, you will be asked to attend a group meeting where you will complete the required paperwork for both your Perkins Loan and your Stafford Loans borrowed from UNI. We will go over pertinent information as it relates to the repayment of your loan; explain your benefits and rights, as well as your responsibilities. If you fail to attend an exit interview, or you do not graduate from UNI, you will be sent a letter telling you how to do your exit interview on-line at www.ecsi.net. The original grace period on a Perkins Loan is nine months. Following deferments, the grace period is 6 months. No payments are due while you remain in school at least half time. Your nine-month grace period begins when you either graduate, drop below half time status, or transfer. During your grace period, no interest accrues and no payments are due. Interest will start to accrue the first day of the ninth month with your first payment due the first day of the tenth month. Payments are set up at a minimum of $40 per month. There is a ten-year maximum length of time to repay the loan, so if you borrow an amount that cannot be repaid within the ten years with a payment of $40 per month, your monthly amount will be raised accordingly. Where do I send my payments? Forms? Questions? Correspondence? Name, address, and phone number changes? The UNI Office of Business Operations is in charge of all Perkins Loans. All payments, forms, questions, concerns, and correspondence of any kind should be sent to this address: University of Northern Iowa Office of Business Operations, 1148 Campbell ATTN: Perkins Loans Cedar Falls, IA 50614-0008 (319)273-3539 or 273-6441 fax: (319)273-3009 e-mail: penny.becker@uni.edu or joyce.willms@uni.edu May I pay my loan off early? Or at a higher rate than the minimum payment? Is there a penalty for paying it off early? There is no penalty if you pay your loan off early. This can be done by making a lump sum payment or by making larger payments than are required on your schedule. The advantage is that you will pay less interest and your loan will be paid in full more quickly. Interest is figured once a month on the remaining balance so by paying even $5 more per month can make a good difference in the amount of interest you pay and the length of time you have to pay. What kind of deferments are available? Deferments put off your payment, and in all but one case, stop interest from accruing. The most common deferment is a student deferment. As long as you are at least a half-time student, and our office is informed of your attendance, you can defer your loan indefinitely. All Perkins Loans are eligible for three deferments that have a three-year maximum allowed. They are for participating in a rehabilitation program, for economic hardship, and for unemployment. These all have a six-month grace period following them with your regular payments beginning on the seventh month. No interest accrues and no payments are due during the deferment or the grace period. There is also a forbearance that is available to all loans, no matter when they were borrowed. We do forbearance if you are not eligible for any other type of hardship deferment. Interest accrues during a forbearance and can be paid during the deferment or at the end of the deferment as you choose. There is no grace period. What kinds of cancellations (loan forgiveness) are available? Cancellations are available for various types of employment. The common thread is that you must be full time and work a full year to be eligible. The employment areas that are eligible are teaching – in a low-income school, in special education, in a bi-lingual room, in a foreign language, in a teacher shortage area as determined by the state in which you teach math or science; child and family service working exclusively with low income, high-risk children 21 or under; law enforcement and corrections in the enforcement of criminal laws; nurse or medical technician -- must be licensed, registered or certified; Peace Corps; Head Start; or specific early intervention professionals that work with infants and toddlers that fall under the definitions in the Disability Act. Contact this office for more specific information or go to the cancellation section on this web page. What if I can’t make my payment when it’s due? Contact this office before the due date if possible. The worst thing you can do is ignore notices, billings, and phone calls from this office. There are hardship deferment options we have available, we can make arrangements for a temporarily smaller monthly payment, or after discussing your situation, we may come up with some other option. We are very willing to work with you in any way we can to keep your account current. What is loan consolidation? How do I apply for consolidation? A loan consolidation is when you have one lender buy your other federal student loans, making them all one loan. For federal student loan purposes, this means that you may combine any or all of your federally funded loans into one loan. Perkins Loans are eligible for this as well as Staffords and Health Professional loans to name just three. To start the paperwork, you need to contact one of your Stafford loan lenders. This may be the Department of Education (the lender of your William D. Ford Direct Stafford Loan) or it may be an agency like Iowa Student Loan Liquidity, Sallie Mae, Citibank, UNIPAC, USA Group, or EduServ to name only a few. It is best if you contact a lender that is already servicing one of your Stafford Loans. They will send you an application on which you will list all the federal student loans that you have outstanding, their balances, their interest rates, and the address of the lender/servicer. You will also tell them what loans you want included. This may be all of them, or it may be only a portion of them. For instance, you may not want to include your Perkins Loans if you are going into a field that is eligible for cancellation. The consolidation loan will not have cancellation benefits. Also, be aware of the interest rate you are offered on the consolidation loan. Perkins Loans have a fixed rate, it will not change, of 5%. A consolidation loan also has a fixed rate, but it may be higher than 5%. However, if you are having trouble keeping track of all your loans, or having trouble making the minimum payments on them, you may be better off including all your loans into the one consolidation loan so that you have only one lender to deal with and only one minimum payment per month. Keeping a good credit history on all your loans is very important. Disadvantages to consolidation are 1) The interest rate may be higher, 2)Because you can stretch the payments out over a longer period of time, you may pay quite a bit more in interest, and 3) You lose the cancellation benefit of your Perkins Loan. |
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Office of Business Operations • 103 Gilchrist • University of Northern
Iowa
Cedar Falls, Iowa 50614-0008
Phone: 319-273-2162• Fax: 319-273-3009
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Date Updated: September 20, 2005 |
