Are unsubsidized loans Perkins?
With subsidized loans, the lender pays the interest on behalf of the student for a period of time. Students are responsible for all of the interest on unsubsidized loans. Perkins loans are not based on financial need and do not offer subsidized interest but are often used in conjunction with Stafford loans.
If you expand “View Loans” and select the “View Loan Details” arrow next to a loan, you'll see the more detailed name for that loan. Direct Loans begin with the word “Direct.” Federal Family Education Loan Program loans begin with “FFEL.” Perkins Loans include the word “Perkins” in the name.
Perkins loans are federal student loans offered to undergraduate and graduate students with exceptional financial need. They are always subsidized, meaning you won't pay or accrue any interest while you are in school or during the nine-month grace period following graduation.
Consolidate your loans: Perkins Loans don't qualify for Public Service Loan Forgiveness (PSLF) or income-driven repayment plans. But if you consolidate your loans through the Direct Consolidation Loan program, you will be eligible for both.
Nothing really. Students with financial need must rely on Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), college aid awards, work-study, subsidized federal student loans, or private loans. Pell Grants do not need to be repaid.
Perkins loans are no longer offered, but borrowers who still hold one must repay the loan. As of 2023, other federal loans are available to students, including direct subsidized loans, direct unsubsidized loans, direct plus loans, and direct consolidation loans. Congressional Research Service.
Perkins loans are a bit different from Stafford loans because the school lends the money to the student rather than the federal government. This can be very helpful to students who need extra help and have already borrowed the maximum amount in Stafford loans.
Visit your dashboard. Find the “My Loan Servicers” section. If you see a servicer name that starts with “DEPT OF ED,” the related loan is held by ED.
Direct Subsidized Loans are available only to undergraduate students who have financial need. Direct Unsubsidized Loans are available to both undergraduates and graduate or professional degree students. You are not required to show financial need to receive a Direct Unsubsidized Loan.
Direct Subsidized Loans: You won't be charged interest while you're enrolled in school or during your six-month grace period. Direct Unsubsidized Loans: Interest starts accumulating from the date of your first loan disbursem*nt (when you receive the funds from your school).
Do Perkins Loans go away after 7 years?
As we mentioned above, a defaulted student loan debt typically stays on your credit report for 7 years from the date of the first missed payment, but there are exceptions, such as Perkins loans, which may stay on your report until they've been paid off.
| Eligible | Ineligible |
|---|---|
| Direct Subsidized Loans Direct Unsubsidized Loans Direct PLUS Loans Direct Consolidation Loans | Federal Family Education Loan (FFEL) Federal Perkins Loan (Perkins Loan) Student loans from private lenders |
What loans qualify for forgiveness? Only loans you received under the Direct Loan Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
A borrower who is attending less than half-time and who has no outstanding Perkins Loans must begin repaying a new loan nine months from the date the loan is made or nine months from the date the student enrolled less than half-time, whichever is earlier.
The federal Perkins loan was an appealing option for undergraduate and graduate students who showed exceptional financial need when looking to pay for school. But as of Sept. 30, 2017, new Perkins loans are no longer available.
On September 30, 2017, the Federal Perkins Loan program failed to renew in Congress, thus effectively ending the loan program.
On your account dashboard, you can find “My Loan Servicers” or check the National Student Loan Program System. If you're making payments to a lender that isn't listed, there's a chance your loan isn't federal.
Ford Federal Direct Loan (Direct Loan) Program. If a school today says that it offers “Stafford Loans” or “Direct Stafford Loans” to its students, this means Direct Subsidized Loans and Direct Unsubsidized Loans.
PLUS loans through the Direct Loan program have a fixed interest rate of 6.41%. The interest on the PLUS loan is not subsidized while the student is in school, unlike the subsidized Stafford and Perkins loans. The PLUS loan charges loan fees of 4%, deducted from each disbursem*nt check.
Advantages of the Perkins Loan
It carries no origination and guarantee fees. Many other loans may have fees of 0-4%. Repayment of the loan does not begin until you graduate or drop below half-time status. In cases of economic hardship, payments may be deferred, extended, or reduced.
Do Perkins Loans show up on credit report?
Credit Bureau Reporting: All Perkins Loans are reported to national credit bureaus every month. This started when you received your first disbursem*nt, and will continue monthly until seven years after your loan is paid in full.
To find out which loan servicer is servicing your loan, log in to StudentAid.gov to view your Dashboard or call the Federal Student Aid Information Center at 1-800-433-3243.
You'll also be eligible for student loan forgiveness on any remaining balance after the repayment period ends. This is usually after 20–25 years. Both direct subsidized and unsubsidized loans are eligible for any of the four IDR plans.
That said, if you do decide to take on federal loans, it's generally wise to accept subsidized loans first because they offer more benefits in the form of government interest payments. Unsubsidized loans, on the other hand, put you on the hook for all of the interest that accrues on the loan.
Unsubsidized student loans are still a good option since they typically offer better rates and terms than private student loans — plus anyone can get an unsubsidized loan, regardless of income.
References
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