Understanding your Federal Perkins Student Loan
The Federal Perkins Loan Program is a loan program which is administered through the Federal Government. They release funds to Occidental and the Financial Aid office packages those funds into qualifying students' award packages. This loan can be consolidated with any other federal loan program once the student leaves the College.
Occidental uses ECSI (an outside company) to administer the billing and other services for this loan, which includes processing payments and all deferments or cancellations for this loan.
Terms and Conditions of the Perkins Loan
The Perkins loan has a minimum monthly payment of $40 a month, which may increase based on the amount that was borrowed, and repayment is scheduled out over 10 years. The interest rate is 5% for this loan and there is a $4.00 late payment fee assessed for every missed and/or late payment. Before leaving Occidental College, each student with this loan must complete an exit interview and will then enter into repayment upon separating from the College. Once the borrower enters into repayment, they are given an initial grace period of 9 months. Additionally, the Perkins loan offers a grace period of 6 months after each deferment period.
The Perkins loan program offers the following deferment provisions (deferment forms can be found on the ACS website as well as the Forms section of this website). During deferment, the borrower is not required to pay loan principle and interest does not accrue.
- In School Deferment: The borrower must be enrolled at least part-time at an eligible academic institution.
- Graduate Fellowship Deferment: A borrower may defer if he or she is enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the U.S. Department of Education, including graduate or postgraduate fellowship-supported study (such as a Fulbright grant) outside the United States.
- Unemployment Deferment: A borrower may defer for up to three years if the borrower is seeking and unable to find full-time employment.
- Economic Hardship Deferment: A borrower is entitled to an economic hardship deferment for periods of up to one year at a time, not to exceed three years cumulatively.
- Internship/Residency deferment: A borrower who is serving in a medical internship or residency program is eligible for an internship deferment for up to two years.
- Temporary Total Disability Deferment: An affidavit from a qualified physician is required to prove disability. A borrower is temporarily totally disabled if he or she is, due to illness or injury, unable to attend an eligible school or to be gainfully employed during a reasonable period of recovery. Additionally, a borrower may receive deferment for temporary total disability of a spouse or dependent if the spouse or dependent requires continuous nursing or other services from the borrower for a period of at least three months due to illness or injury.
- Public Service Deferment: A borrower is entitled to a public service deferment if:
- They are a member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard
- They are a member of the National Guard or the Reserves serving a period of full-time active duty in the armed forces
- They are an officer in the Commissioned Corps of the U.S. Public Health Service
- They are a Peace Corps or Americorps volunteer or comparable service
Forbearance is usually a temporary postponement of payments. The borrower may alternatively request an extension of time allowed for making payments or the acceptance of smaller payments than were previously scheduled. Unlike deferment, interest continues to accrue during any period of forbearance. Forbearance may be granted to borrowers who are experiencing financial hardship, poor health, or for other acceptable reasons. Also, forbearance may be authorized due to national military mobilization or other national emergency. Borrowers must request forbearance in writing, providing supporting documentation of the reason for forbearance. Forbearance may be granted for a period of up to one year at a time but may not exceed a total of three years.
Up to 100% of the Perkins loan original principal loan amount can be cancelled if the borrower is performing a qualifying service in a specified area. Some of the qualifying areas are: teaching, early intervention services, law enforcement or corrections officer, nursing, medical technicians, child or family service agents, military service, and volunteer service. For more information on the qualifying areas, please use the Perkins loan information link above. A percentage of the loan principal is cancelled based on each year (12 consecutive months) of qualifying service. Deferments are given in one year increments for pre-cancellation services.
Discharge (complete loan cancellation) Provisions*
A Perkins loan (in its entirety or the remaining balance) can be discharged due to Death or Total and Permanent Disability. In cases of Death, Occidental must receive an original or certified copy of the death certificate. Total and permanent disability is the inability to work and earn money because of an injury or illness that is expected to continue indefinitely or to result in death. The borrower must submit a physician’s certification of total and permanent disability. The physician must certify that the borrower is 100% disabled according to the Perkins Loan Program definition of disability.
*Please note: a Perkins loan will not be discharged due to bankruptcy.
Defaulted Perkins Loans
If a borrower defaults on their Perkins loan, the loan will negatively impact their credit report and the borrower is eligible to receive the following penalties:
- Remaining loan principal balance is accelerated, making the entire remaining loan amount payable immediately.
- The loan is sent to a collection agency after acceleration, where the borrower will incur all collection costs.
- The borrower becomes ineligible for deferments and cancellations
- The borrower will no longer be eligible to receive any additional Federal financial aid for any additional educational purposes.
- A hold will be placed on your academic transcript from Occidental College.