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Perkins Exit Topic 1 of 6: Things You Need to Know
A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need. Your school is your lender. The loan comes from government funds, with a share contributed by the school. As a result, your school--or its billing service--is your contact for your Perkins Loan.
Now that you're leaving school (or dropping below half-time attendance), it's important to review the details of your Perkins Loan. Your rights and responsibilities are listed at the end of this session. Remember:
- You signed (either electronically or on paper) a Master Promissory Note, which is a legal agreement to indicate your commitment to repay your student loan(s).
- You MUST pay back your loan, even if:
- You don't finish school,
- You don't get a job after leaving school, or
- Your education didn't meet your expectations.
- If you make regular, on-time, monthly payments, you will build a good credit history, which makes it easier for you to borrow money in the future.
- If you fail to make regular, on-time monthly payments, you will face serious consequences.
- Stay in close touch with the financial aid professionals at your school. Contact them, or their billing service, with any changes in your name, address, phone, employment situation, etc.
- Stay informed. Keep your records up to date and organized, so you can easily resolve problems. Know the amount of your student loan payments--and when repayment begins. Read all information carefully. Keep copies of any promissory notes you sign; they tell you the total amounts borrowed and the names and addresses of the institutions from which you borrowed.
- If you have trouble making payments, contact your school or its billing service immediately. You have several options for resolving difficulties.
- Develop a budget to help you manage your income and expenses, including your student loan payments, credit card debt, and other living expenses.
You must tell your school or its billing service about changes to your name, address, and phone number. In addition, you must let your school know if you:
- withdraw from school (or drop below half-time status),
- transfer to a new school (until your loan is paid in full, the school that administers your Perkins loan has the right to contact your new school--and any other school you attend--to find out about your student status, year of study, dates of attendance, graduation, withdrawal, transfer, and current address),
- change your employer (or your employer's address changes),
- change your Social Security Number or driver's license number,
- change your expected graduation date, or
- experience any other change that affects your loan status (for example, if you get a job and therefore lose your eligibility for an unemployment deferment).
Promptly respond to any communication about your loan from your school or its billing service.