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 Perkins Loans

The federal Perkins Loan is a low-interest loan for undergraduate and graduate students with financial need. The U.S. Department of Education provides a limited amount of funding for Perkins Loans to the University each year, and U-M distributes the loans among students with the greatest need. The University acts as the lender for the loans and collects loan payments from students according to federal regulations. 

Students are automatically considered for the Perkins Loan if they apply for financial aid. Because funding for the Perkins Loan is limited, students who apply for financial aid early are most likely to receive the Perkins Loan. If you are awarded a Perkins Loan, it will appear on your financial aid award notice.

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Eligibility, Loan Terms, and Requirements

ELIGIBILITY, LOAN TERMS, AND REQUIREMENTS

Alert: Perkins Loan program scheduled to end Sept. 30, 2015
 
Lack of congressional action is expected to end funding on Sept. 30, 2015 for the low-interest federal Perkins Loan program.  Universities and colleges, including U-M, are not allowed to make Federal Perkins Loans to new borrowers or any graduate student after this date. New borrowers (all entering students and continuing undergraduate students) may be awarded a Perkins Loan for 2015-16 but not in future years. It is important for students to sign their master promissory note in Wolverine Access so the loan can be disbursed by Sept. 30. If new borrowers do not sign the note, they will not receive a Perkins Loan.
 
Some continuing undergraduate students who received Perkins Loans in 2014-15 or earlier may receive future awards through Sept. 30, 2020 under a grandfathering provision that allows them “… to continue or complete courses of study.”  According to information from the U.S. Dept. of Education, a future Perkins Loan at U-M may be allowed if:

  • U-M made at least one Perkins Loan to the student on or before June 30, 2015
  • The student remains enrolled at U-M and received the most recent Perkins Loan from U-M
  • The student is enrolled at least half-time in the same academic major and degree program for which he/she received the most recent Perkins Loan. If a student changes majors, Perkins eligibility is lost

The full amount of Direct Subsidized Loan for which a student is eligible must be awarded first; then a Perkins can be awarded. There is no grandfathering provision for graduate students; 2015-16 is the last year they can receive a Perkins Loan. More details about these program changes will be posted as they are made available by the U.S. Dept. of Education.
 

Eligibility Criteria Loan Terms Additional Information/Requirements

• Need-based: Considered based on Expected Family Contribution (EFC); allowable EFC determined by federal funding levels; not available if student has a bachelor's degree and pursuing subsequent bachelor's degrees

• Must be enrolled at least half-time in a degree program

• Student must meet financial aid priority application deadline (April 30)

• 5% fixed interest

• Federally funded; supplemented by U-M funds

• Award amounts vary based on available funding

• Repayment is deferred, no interest while enrolled at least half-time

• Nine-month grace period before repayment begins (see prom note)

• Minimum monthly repayment $40

• Students must complete a Perkins Loan Master Promissory Note. By signing the MPN, you agree to the Perkins Loan Rights and Responsibilities (see below).

• Special deferment and cancellation provisions for volunteer service (Peace Corps, Armed Services, etc.) and teachers; see Your Federal Student Loans: Learn the Basics and Manage Your Debt and the U.S. Dept. of Education website (information for teachers)

• More information from the U.S. Department of Education

• Must complete exit counseling through the U-M Student Loan Collections. For more information, see the Student Loan Collections website

THE AMOUNT OF YOUR LOAN

Your financial aid award notice shows the amount of Perkins Loan funds you may borrow for the current award period. If you have already received a University of Michigan uniqname and password, you can view your financial aid awards on Wolverine Access (select Financial Aid > Awards). Wolverine Access also allows you to see the cumulative amount you have borrowed to date through all loan programs (select Loans > View Student Loan Summary).

You can also use Wolverine Access to determine what your loan payments will be for all loan programs (Direct, Perkins, Health Professions, Nursing, and private loans) once you graduate or drop below half-time enrollment. See our Repaying Your Student Loans page for more information.

Once you have signed your loan documents and shortly before your loan funds are disbursed, you will receive a disclosure statement email, which will specify the loan amount you are borrowing and other important information about your loan. You will receive similar disclosure emails each time you borrow through the Perkins Loan program.

COMPLETING YOUR LOAN REQUIREMENTS

As a Perkins Loan borrower, you will be required to sign a Perkins Loan Master Promissory Note the first time you borrow and to complete Exit Counseling when you graduate, drop below half-time, or transfer to a different school. In addition, each time you borrow you will receive a Rights and Responsibilities Statement that outlines your agreement with the university.

Master Promissory Notes

The Master Promissory Note (MPN) is a document that authorizes the university to credit the loan funds to your U-M student account for multiple years. To receive your loan funds, you must sign an MPN the first time you are awarded a Perkins Loan. After the first time, you will not need to sign another one for the duration of your University of Michigan education (the master promissory note is good for 10 years). You complete/sign MPN online using Wolverine Access. Visit this page for details about completing your MPN.

If you are borrowing from more than one loan program, you might be required to sign more than one MPN. For example, if you have a Perkins Loan and a Direct Loan (Subsidized and/or Unsubsidized), you will need to sign MPNs for both loans. You will receive separate notification about how to complete an MPN for the Direct Loan.

Exit Counseling

Perkins Loan borrowers must complete exit counseling through the U-M Student Loan Collections Office and Educational Computer Systems, Inc. (ECSI): www.ecsi.net. For more information, see the Student Loan Collections website at www.finops.umich.edu/StudentLoans/exit.htm

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RECEIVING YOUR LOAN FUNDS

You must have signed all of your loan documents (see below) and be enrolled at least half-time to receive your loan funds. See Disbursement of Your Aid Funds for information about how your loan will be paid to you. Each time you borrow through the Perkins Loan program, you will automatically receive your Perkins Loan funds unless you decline them (see How to Accept, Decline, or Reduce Your Awards).

When you sign the promissory note for your Perkins Loans, you are indicating your understanding of the rights and responsibilities published below. You may read the statement below and/or download and print a PDF for your records. For information on the cumulative amount you have borrowed through the Perkins Loan program, go to Wolverine Access > Student Business > Financial Aid > Information > Loan History. See our Repaying Your Student Loans page for more information. 

PERKINS LOAN STATEMENT OF RIGHTS & RESPONSIBILITIES

This loan is a serious financial obligation and borrowers should exercise caution when applying for this loan. The promissory note is a legally binding contract and it is important that you understand your rights as well as your responsibilities in accepting this loan. When the student borrower signs this statement, it is understood that you fully and clearly understand these rights and responsibilities and as such agree to honor them.

I fully and completely understand that I must, without exception, report any of the following changes and/or information to:

 

The University of Michigan
Student Loans and Collections Office
6061 Wolverine Tower, 3003 South State Street
Ann Arbor, MI 48109-1287
Phone: 1-800-456-0706 or 734-764-9281
 

  • If I withdraw, am dropped, or transfer from The University of Michigan.
  • If I drop my academic credits below half-time status.
  • Any local or permanent address changes.
  • If my name and/or Social Security Number changes.
  • If I become eligible for a deferment or cancellation as described below.
  • If I become ineligible for a deferment and/or cancellation that has been granted.

I understand that the maximum amount of Federal Perkins and National Direct Student Loans an eligible student may borrow is $5,500 annually for an undergraduate student and $8,000 for a graduate or professional student. The aggregate unpaid principal amount of all Federal Perkins and National Direct Student loans received by an eligible student may not exceed $27,500 for an eligible undergraduate and $60,000 for a graduate or professional student including amounts borrowed as an undergraduate.

I understand that when I graduate, I must complete an "exit interview" with the U-M Student Loans and Collections Office through the website or alternative format if preferred. If I transfer, withdraw, or reduce my academic credits below half-time status, arrangements for an exit interview must be made with the Student Loans and Collections Office.

I understand that my loan reports monthly to the national credit bureaus from the time of disbursement. Failure to make payments as scheduled, or file forms in a timely manner to defer payments, may result in negative reporting to the credit bureaus.

I understand that I am responsible to repay my loan according to schedule even if I do not complete my degree or I am dissatisfied with my academic experience. Statements are provided by the University of Michigan's billing service. Failure to receive a statement does not exempt me from payment.

I understand that scheduled repayment may be deferred if I submit timely proof (Deferment of Repayment forms obtainable from the Student Loans and Collections Office) of my inability to find full-time employment, suffering an economic hardship, engaging in a service described in the Cancellations section of your promissory note, being at least a half-time student, pursuing a course of study in an approved graduate fellowship program, graduate/post graduate fellowship program outside the United States, or rehabilitation training program.

I understand the Student Loans and Collections Office of the University of Michigan must grant me forbearance for hardship, renewable at twelve (12) month intervals for a period not to exceed three (3) years, if my annual Title IV loan repayment obligation equals or exceeds twenty (20) percent of my gross income. I understand I may otherwise qualify for a forbearance, as determined by the Student Loans and Collections Office.

I understand that upon submission of written proof of permanent 100% disability, my loan will be assigned to the United States Department of Education if the, disability discharge claim is approved by the Student Loans and Collections Office. The United States Department of Education will discharge the total amount owed on this loan if it determines that I am eligible for a total and permanent disability discharge. My death also cancels the loan (acceptable proof is a certified original death certificate).

I understand that partial and/or full cancellation of my loan is possible provided that I am a full-time special education teacher, full-time teacher of any field of expertise that is determined by the state education agency to have a shortage of qualified teachers, a full-time nurse or medical technician, full-time employee of a child or family service agency for high-risk children (under 21) and their families from low-income communities, a full-time teacher for a school that has a high number of students from low-income families, full-time staff member of the Head Start Program, full-time teacher with the Bureau of Indian Affairs, full-time law enforcement or corrections officer.

I understand that I must acknowledge and answer promptly any communication from the Student Loans and Collections Office concerning my loan.

I understand that it is my responsibility to keep records of my loan until the debt has been paid in full.

I understand I may prepay my loan at any time without penalty or premium. (It is suggested that you contact the Student Loans and Collections Office for the exact payoff amount).

I understand that student loans are not dischargeable in bankruptcy unless I am able to prove undue hardship in a court of law.

I understand the University of Michigan and any collection agency or legal counsel under its direction can contact any school that I may attend or have attended to obtain information concerning my student status, my year of matriculation, my classification, my dates of attendance, graduation or withdrawal, my transfer to another school and the name of that school, any my current address.

I understand that there is no statute of limitations on federal loans.

I also understand and agree to authorize the University of Michigan to take whatever collection and/or legal action necessary to secure repayment of my loan, including charging reasonable collection costs, thereby showing "due diligence" in collecting.

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