What is the difference between a federal Perkins loan and a subsidized direct loan?

goody: What is the difference between a federal Perkins loan and a subsidized direct loan?
So I recieved my Financial aid reward for college and was offered a perkins loan and a subsidized direct loan. My question is what is the difference and If I were to choose only one which one would be better. both are of the same amount.

Answers and Views:

Answer by mz_diva_1
If I’m not mistaken, an unsubsidized loan is one that you pay the principle and the interest. The subsidized loan is one that the government pays the interest. HTH

Answer by NotAnyoneYouKnow
The Perkins loan has the lowest interest rate of any federal financial aid loan – the fixed rate on the Perkins is 5%, versus 6% for the subsidized Stafford that you were also offered. The Perkins is offered to students who are judged to have “exceptional” need.

The Perkins is also superior because there are no “origination” fees associated with it. The full amount of the loan will be credited to your student account, unlike the Stafford, which has a 2% origination fee. This is because the lender on a Perkins loan is your school, rather than a bank.

The only possible downside of the Perkins (compared to the Stafford) is that the repayment period on a Perkins loan is 10 years, whereas the repayment on a Stafford ranges from 10 to 25, depending on the amount borrowed.

I hope that helped – by the way, the Stafford is an excellent loan, too – far better than anything you could get from any non-governmental (private) source.

Good luck!

Answer by Found-1
The Perkins loan will be better, choose that one. Better interest and also many more options on getting it discharged / forgiven (so you don’t have to pay it back) later.

See the discharge options for both on pages 34 and 35.