Students with high financial need may qualify for a federal Perkins loan, with a superlow interest rate of 5%. The financial-aid offers you receive from schools will tell you if you're eligible. The schools themselves make Perkins loans, but each institution's loan pool is funded with federal money -- and with repayments from graduates. The maximum annual loan for undergraduates at many schools is $4,000.

Special deals on repayment

No payments are due on a Perkins loan until nine months after your child graduates or drops below half-time as a student. Typically, the repayment term is ten years or less. On $5,000 of Perkins-loan debt, the monthly payment is $53 over ten years.

Unlike Stafford and PLUS loans, Perkins loans can be discharged (canceled) in full or in part when you are employed at certain kinds of work, including these jobs:

• Full-time teacher, when your school serves a low-income area, you teach special-education students, or you teach math, science or other subjects with a shortage of teachers;



• Full-time nurse or medical technician;



• Full-time law enforcement or corrections officer;



• Full-time employee of a child- or family-service agency in a low-income community; or



• Full-time Peace Corps volunteer.

How to Choose a Stafford-Loan Lender

PLUS Loans (for Parents)

MORE: Kiplinger.com | The Basics of Money | Getting Started

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