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The government awards three types of financial aid for higher education: grants, loans, and work-study. In the loan category there are four major programs backed by Uncle Sam: The Stafford Loan Program, PLUS Loan Program, Consolidation Loan Program, and the Perkins Loan Program. The following are details about the Perkins Loan Program: Details: Low-interest loans for undergraduate and graduate students with extreme financial need. Your school provides the loan from funds provided by the government and its own funds. You must repay the loan. Based on: Financial need, other aid you receive, and availability of funds at your school. Amount: You can borrow up to $4,000 per year as an undergraduate or $6,000 per year as a graduate student. Cost: Five percent interest. There are no additional fees. To apply: Contact your school to find out if additional information is required other than the Free Application for Federal Student Aid (FAFSA). Deadlines are determined by each school and may be earlier than the FAFSA deadline. How you get the money: Your school will either pay you directly or credit your school account. How you repay the money: Nine months after you graduate, leave school, or drop below half-time enrollment, you will begin repayment. Under certain circumstances, you can receive a deferment to temporarily postpone payments on your loan. You do not pay interest during the deferment period. Under certain circumstances you can receive forbearance, a limited and temporary postponement or reduction of your payments if you are unable to meet your repayment schedule and are not eligible for a deferment. These circumstances may include poor health, serving in a medical or dental internship or residency, or if the payments exceed 20 percent of your monthly gross income. Interest is accrued during the forbearance period. Deferments and forbearance must be approved by your school.
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