Perkins Loan Information
FEDERAL PERKINS LOAN
Please Note: Per federal regulations, Perkins loans are no longer being awarded and disbursed.
WSU Financial Operations-Accounts Receivable has partnered with Heartland Educational Computer Systems, Inc. (ECSI) in processing and collecting all of our federal Perkins loans.
What is a Federal Perkins Loan?
The Perkins loan is a low-interest (5%) loan available to both graduate and undergraduate students with exceptional financial need. It is a Title IV, campus-based loan, made up of university and federal dollars, with the university acting as lender. This is a loan and must be repaid.
After ceasing to be at least a half time student at an eligible school or comparable institution (graduating, leaving school or dropping below half-time status), the borrower will need to complete exit loan counseling which provides your rights and responsibilities as a loan borrower in repayment. ECSI will provide you with information on completing exit loan counseling. The borrower will have a nine-month grace period before beginning loan repayment. After the grace period expires, interest will begin to accrue at the fixed 5% rate and repayment on the loan begins. Payments will be due on the 15th of every month for a scheduled ten-year maximum repayment period. Prepayment of all or part of this loan can be made at any time without penalty.
Your loan is one of your first opportunities to establish good credit. According to federal law, we will notify a credit bureau of this debt. Our loan service, ECSI, will send updates to the credit bureau for the life of your loan. A favorable rating on your loan can afford you new credit opportunities in the future.
Payments are applied to accounts in the following order:
- Collection Costs
- Late Charges
- Accrued Interest
The university imposes a late charge if the scheduled payment is not made when due. Late charges will also be imposed if proper documentation is not submitted in a timely manner (as determined by the university) to defer the payment. The late charge will not exceed 20% of the monthly payment.
Once your account is past due, we are required to take the following steps, as your account will be in default.
- The entire unpaid balance, plus interest and late charges, are due.
- Report your default to regional and national credit bureaus.
- Assess substantial collection fees and penalties. You will be responsible to pay all reasonable fees and expenses of collecting unpaid charges, including late fees, collection agency fees (which may be based on a percentage up to a maximum of 33.3% of the debt), attorney and court fees.
- Refer your account to a collection agency or lawyer. All correspondence and questions should be directed to the collection agency. If you do not know which agency is handling your account, call (316) 978-3333 or email email@example.com to receive that information.
- This pursuit can be costly and of long duration, as this loan is not dischargeable in bankruptcy, nor does any statute of limitations apply to it. If the default continues, we relinquish your loan to the federal government to pursue repayment.
To receive forbearance, deferment or cancellation benefits, you must make application to ECSI and submit any additional documentation ECSI and WSU require to prove eligibility for these benefits. You are responsible for submitting the appropriate applications on time, or risk losing these benefits. Defaulted loans generally do not qualify for these benefits.
- Forbearance is a temporary postponement of payments. Upon making a properly documented written or oral application to ECSI, you are entitled to forbearance of principal and interest or principal only, renewable at intervals up to 12 months for periods that collectively do not exceed three years. Interest accrues during any period of forbearance. Forbearance can be granted to borrowers experiencing: (1) financial hardship; (2) poor health, as certified by a physician; (3) other acceptable reasons, as determined by the university.
- Deferments allow the borrower to defer their loan when enrolled at least half time in an eligible school, seeking employment or having economic hardship. While an account is on deferment status, monthly payment is not required and interest does not accrue. To request deferment, a student deferment form must be completed by the student and certified by the school they are attending. Deferment forms can be obtained by contacting ECSI. After deferment, the borrower is entitled to a post-deferment grace period of six consecutive months.
- Economic Hardship Deferments can be granted to periods of up to one year at a time, not to exceed three years
total deferment. The borrower must provide satisfactory documentation, as specified
by the university, showing that they are within any of the following categories:
- Has been granted an economic hardship deferment for either a Stafford or PLUS loan for the same period of time the deferment is requested.
- Is receiving federal or state public assistance (e.g. Food Stamps, Supplemental Security Income, etc.).
- Is working full time (over 30 hours/week) and has monthly federal education payments that exceed 20% or more of the borrower’s total monthly gross income.
- Is working full time (over 30 hours/week) and is under the poverty line.
- Is serving as a volunteer in the Peace Corps.
- Unemployment Deferment is where a borrower may defer repayment of a Perkins loan for up to three years, if seeking and unable to find full-time employment. Documentation, as specified by the university is required.
- Cancellations entitle a borrower up to 100% of the original principal loan amount canceled if they perform qualifying service in the areas listed below. Qualifying service must be performed after you receive the loan. A borrower must be employed full-time for 12 consecutive months in a qualifying job position with a qualifying agency. Specific criteria for each type of cancellation must be met, in addition to providing required documentation requested by the university (copy of license, certification or registration). The borrower’s account must be paid current to the date of eligible employment for cancellation. To obtain the most recent information on qualifying services, visit the ECSI website.
- Teaching - (1) a full-time teacher in a public or other nonprofit elementary or secondary school that has been designated by the Secretary as a school with a high concentration of students from low-income families. An official directory of designated low-income schools is published annually by the Secretary. For information regarding a specific school, please contact ECSI; (2) a full-time special education teacher in a public or nonprofit elementary or secondary school system; (3) a full-time teacher in a public or other nonprofit elementary or secondary school system who teaches math, science, foreign languages, bilingual education, or any other field of expertise that is determined by the State Department of Education to have a shortage of qualified teachers in that State.
- Early Intervention - a full-time qualified professional provider of early intervention services (EIS) in a public or other nonprofit program under public supervision by a lead agency as authorized by section 672(2) of the Individuals with Disabilities Act. EIS is providing to infants and toddlers with disabilities.
- Law Enforcement or Corrections Officer - a full-time law enforcement or corrections officer for an eligible local, state or federal agency.
- Nurse or Medical Technician- a full-time nurse, medical technician or allied health professional providing health care services.
- Child or Family Service Agency - a full-time employee of an eligible public or private non-profit child or family service agency providing or supervising the provision of services to high-risk children from low-income communities.
- Head Start Cancellation – a full-time staff member in the educational component of a Head Start program for a period comparable to a full school year that pays a salary comparable to an employee of the local educational agency. For each completed year, the loan will be canceled at the rate of 15% of the original principal loan amount.
- Military Cancellation - up to 50% of the principal amount of your loan may be canceled for each completed year of qualifying service performed as a member of the Armed Forces of the United States in an area of hostilities that qualifies for special pay under section 310 of Title 37 of the U. S. Code. For each completed year of service, your loan will be canceled at the rate of 12.5% of the original principal loan amount. To obtain the most recent information on military cancellations, visit the ECSI website.
- Volunteer Service Cancellation – up to 70% of the original principal loan amount may be canceled for qualifying service performed as a volunteer under the Peace Corps Act or a volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs). For each completed year of service, your loan will be canceled at the following rates: 15% of the original principal loan amount for each of the first and second twelve month periods of service, and 20% for each of the third and fourth twelve month periods of service.
- Death Cancellation –The Department of Education requires a school to cancel any Perkins loan upon receipt of a death certificate or other certification recognized by the State.
- Disability Cancellation – Borrowers who become totally and permanently disabled may qualify for cancellation of this loan. Permanent and total disability is the inability to work and earn money because of an impairment expected to continue indefinitely or result in death. An application for total and permanent disability must be filed, including any support documents as stated by the university. In addition, a doctor’s affidavit that the borrower is 100% disabled is required. Social security disability does not guarantee Perkins Loan cancellation.
Loans that qualify to have the entire balanced canceled (unless stated otherwise in those listed) are canceled at the rate of:
- 15% for the first and second years of qualifying service
- 20% for the third and fourth years
- 30% for the final year of such service
If a loan has been in repayment prior to qualifying for cancellation benefits, the above rates apply until the balance has been canceled.
A consolidation loan may help borrowers simplify loan repayment by allowing the borrower to combine several types of Title IV federal student loans with various repayment schedules into one loan. Combining loans may reduce the total monthly payment due and many consolidation agencies offer flexible repayment options. Once you have consolidated, you are subject to the terms and conditions of the consolidating agency and are no longer eligible for deferment or cancellation benefits through the Perkins, HPSL and/or LDS programs. By consolidating a Perkins loan, the eligibility for professional employment cancellation is lost.
For more information, contact your Stafford lender or visit these sites:
Once you have graduated or ceased to be at least a half-time student, you are required by federal Perkins regulations to complete an exit interview. The interview’s purpose is to inform the borrower of the loan repayment terms, responsibilities and benefits.
Visit the ECSI website and follow the instructions on how to complete the Perkins exit interview online. Borrowers not wishing to complete the online interview may contact ECSI directly at 1-888-549-3274 to make other arrangements.
Please note you will not be able to obtain transcripts or a diploma until you have successfully completed the exit interview.
- Until your loan is paid in full, you are required to notify Wichita State University or ECSI whenever your address, name, phone number and/or email changes. Email firstname.lastname@example.org with the updates.
- ECSI will mail your IRS Form 1098-E in January for the previous year to the address last provided to ECSI unless you completed "eTax Document Sign-Up" through its website. If you do not receive your IRS Form 1098-E, contact ECSI through their website or by phone at 866-428-1098.
- Helpful websites:
- US Department of Education Student Guide: Federal Perkins Loans
- Department of Education Student Loan Ombudsman: The Ombudsman's office is a resource for borrowers to use when other approaches to resolve a student loan problem have failed. If after notifying the Perkins loan office in writing, the dispute can NOT be resolved, contact the Ombudsman's office.
- Stafford Loan Cancellation for Teaching Information
- Tax Benefits for Higher Education