Frequently Asked Questions
for
Perkins Loans
What is a Perkins Loan?
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.
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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.
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How much can I borrow?
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.
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What is the interest rate?
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.
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Who is my Lender?
The
University of Northern Iowa is your Lender. Our contact information
is:
UNI Perkins Loans
Office of Business Operations
1148 Campbell
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
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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.
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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.
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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.
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Do I have a grace period?
The original
grace period on a Perkins Loan is nine months. Following deferments,
the grace period is 6 months.
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When will I start repayment?
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.
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How much will my payments be?
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.
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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
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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.
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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.
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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.
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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.
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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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