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Frequently Asked Questionsfor Perkins Loans
Perkins Loans are a federally funded loan very similar to the subsidized Direct Loans or Stafford Loans. However, the Perkins fund is much smaller, and is controlled by each school that participates in the program instead of by the Department of Education or a bank. It is a revolving fund so as money is repaid by borrowers who have left school, the fund grows and we are able to loan to new borrowers. How do I apply for a Perkins Loan? There is no 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 on your FAFSA to decide what your need is for that award year. Once need is established, the Perkins fund is awarded on a first come, first served basis to our neediest students. 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 offered (awarded) until loans for that year have either been turned down by a prospective borrower or a prospective borrower is not eligible for the loan and the offer is rescinded. The Financial Aid Office makes the awarding decisions. The Office of Business Operations handles your loan once you have accepted it and signed your promissory note. Lending limits are set by both what year you are in school and as a cumulative amount. Each year an undergrad can borrow up to $5500 in years one and two with a cumulative limit of $11,000, and $5500 in years three and up with a cumulative limit of $27,500. A graduate student can borrow up to $8000 per year with a cumulative amount of $60,000. 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. Even though this is a federal student loan, the University of Northern Iowa is your lender. Our contact information is:
UNI Perkins Loans How and where do I sign my promissory note? Starting March 2004, promissory notes are signed electronically. On your Financial Aid award letter that you access through MyUNIverse will be a link beside your Perkins Loan award saying e-note in blue. You will need to click on that e-note link and it will take you out to start the process of signing your promissory note. You will need your FAFSA pin number to authenticate yourself for this process. If you don’t know your pin number, go to www.pin.ed.gov and request a duplicate. You can choose to have them show you your pin number during that process or you can have them mail it to you. If it is impossible for you to sign your promissory note online, 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. You payments, forms that 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 or charge card, print off forms, view your 1098-E (interest paid for a particular year), do your exit, sign your promissory note, or ling 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 interview and it is printed on every bill, coupon, or grace notice we send to you after you leave UNI. How do I do my Exit interview?IIf you are graduating, you will be sent a letter with times and dates of group meetings you may attend and complete the paperwork for both your Perkins Loan and your Direct Loans. In this letter you will also be given specific directions on how to complete your exit online if you prefer. Alternatively, you may come into our office and complete the exit on paper. The exit explains pertinent information as it relates to the repayment of your loan, explains your benefits and rights, as well as your responsibilities. If you do not graduate because you’ve decided not to continue at UNI for some reason, or if you drop below half-time hours, you will be sent a letter telling you how to do your exit online. If you fail to attend an exit interview, either online or at a meeting, a hold will be placed on your transcripts and registration until the exit is completed.
The original grace period on a Perkins Loan is nine months. Following deferments, the grace period is six months. No payments are due while you remain in school at least half time. Your nine-month grace period begins when you 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 a total amount that is $3700 or more, it cannot be repaid within the ten years with a payment of $40 per month, so 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 responsible for servicing all UNI Perkins Loans. All payments, forms, questions, concerns, and correspondence of any kind should be sent to this address: UNI Perkins Loans (319)273-3539 or 273-6441 Be sure to include your University ID on all payments and correspondence. 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 each month. 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 paying even $5 more per month can make a good difference in the amount of interest you pay and the number of payments you have to make. 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 the repayment of your loan until you are out of school. We belong to a nationwide database called NSLC that automatically notifies us when our borrowers are attending school at least half time. However, not all schools participate. If the school you are attending does not participate, you will need to provide us with enrollment verification from the Registrar at your new school verifying you are in school at least half time. Financial hardship deferments are available for those borrowers who are either unemployed or working only part time but are actively looking for full-time work, or who are working full time but are unable to make their payment, or are receiving some kind of state or federal aid like food stamps or WIC. They all have a six-month grace period following the deferment. There is a three-year limit on these deferments. If you are unable to make your payment but you don’t meet the requirements for the deferments above, we have a forbearance we can apply to your account. There is no grace period following this kind of deferment and interest continues to accrue all through the deferment. All accrued interest would need to be paid before any new deferment was applied. What kinds of cancellations (loan forgiveness) are available? Cancellations are available for various types of employment. No matter the type, you must be employed full time for the full year to be eligible. Types of employment that qualify for cancellation are teachers – in a low-income school, math, science, special education, in a bi-lingual classroom, a foreign language, or a teacher shortage area as determined by the state in which you teach. Child and family service workers also qualify. Your agency must be non-profit and your population that you serve must be 100% low-income, high-risk youth who are 21 or under or their families. Another is law enforcement and corrections in the enforcement of criminal law. Nurses and medical technicians who are licensed, certified, or registered qualify. Participants in Peace Corps, teachers with Head Start, some day care workers, librarians with a master’s degree, public defenders, and fire fighters are others that qualify. Each of these kinds of cancellation has its own criteria for eligibility. If you think your employment should fall under of these categories, contact our office for detailed information. The process is that you complete a form when you start work and we apply a deferment to your account. No interest accrues and your account stays in good status while you are completing your year of eligible employment. At the end of the year, we send another form so your employer can verify for us you did complete the full year and that you worked full time. At this point, we cancel a portion of your loan for that year and start a new deferment for the next year. Over a period of five years, you may have your whole loan cancelled without you ever having to make a payment. Contact our office for more specific information and forms. What if I can’t make my payment when it’s due? Contact our office before the due date if possible. The worst thing you can do is ignore notices, billings, and phone calls from this office. We have many options open to us but we cannot help you if we don’t know what you need. There are economic hardship deferments available, we can arrange 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? Loan consolidation is when you have one lender buy all your other federal student loans so they are combined into one loan with one lender. You are free to pick the lender of your choice, however, UNI recommends that you go through Direct Lending where you already have your Direct Subsidized and/or Unsubsidized Loans. UNI is not able to buy your other loans. To start the process you need to contact the Direct Loan Servicer either by phone or on their website. You will list all of your federal student loans that are outstanding, their balances, 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 only a portion of them. The advantage of consolidation is that you will have only one lender to deal with and you may get a better interest rate than what you have now. The disadvantages are that the interest rate may be higher, the repayment can be stretched out over a longer period so you may pay more interest even if the rate is lower, and you lose your cancellation benefit on the Perkins Loan. Once the Perkins is paid in full – through either consolidation or payments from you – there is nothing left to cancel. So be sure you look at that carefully before you decide to include your Perkins in a consolidation. |
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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: November 19, 2009 |
