What is the difference between Perkins loans and Federal Stafford/Unsubsidized student loans?
Perkins is lent through the University and the Stafford loans are lent by banks. The Perkins is a limited pool of money so once the college runs out for the year it is gone whereas, the Stafford loans are lent to every student who applies and is eligible since the banks have a larger pool of money to lend. The interest rate for Perkins loans is fixed at 5% as well as the Unsubsidized Stafford loan at 6.8%. The Subsidized Stafford loan varies based on the year borrowed. The annual borrowing limits are different; the Perkins annual limit can be the same for each eligible student regardless of the student’s year in college whereas, the Stafford loan limits are based on year in college associated with the number of earned credits by each student.
