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The Federal Perkins Loan Program provides money for college or career school for students with financial need. Students attending any one of approximately 1,700 participating postsecondary institutions may obtain Perkins loans from the school.

Federal Perkins Loan Program Description

Loans made through the Federal Perkins Loan Program, often called Perkins Loans, are low-interest federal student loans for undergraduate and graduate students with exceptional financial need.

Overview of Federal Perkins Loans:

  • Available to undergraduate, graduate, and professional students with exceptional financial need.
  • Interest rate for this loan is 5%.
  • Not all schools participate in the Federal Perkins Loan Program. You should check with your school's financial aid office to see if your school participates.
  • Your school is the lender; you will make your payments to the school that made your loan or your school’s loan servicer.
  • Funds depend on your financial need and the availability of funds at your college.

Students must file a Free Application for Federal Student Aid (FAFSA) as part of the application process for a Perkins Loan. The form can be completed on the FAFSA website at http://www.fafsa.ed.gov. Students also will need to complete a Perkins promissory note in order to receive a loan.

Perkins borrowers are eligible for loan cancellation for teacher service at low-income schools and under certain other circumstances specified in the law (HEA). Students may defer repayment of the loan while enrolled (at least half-time) at a postsecondary school. A borrower who has difficulty repaying a Perkins Loan should contact the school where he or she received the loan to find out if he or she is eligible for a deferment or forbearance based on economic hardship or other circumstances.

Who is Eligible for a Perkins Loan?

  • Undergraduate, graduate, or professional student with exceptional financial need
  • Students Enrolled full-time or part-time
  • Attending a school that participates in the Federal Perkins Loan Program; and meet other eligibility criteria.

If you have questions about Perkins Loan eligibility, please contact your school’s financial aid office.

How much can I borrow?

The amount you can borrow depends on your financial need, the amount of other aid you receive, and the availability of funds at your college or career school. You should apply for federal student aid early to make sure you are considered for a Perkins Loan. Due to limited funds, not everyone who qualifies for a Perkins Loan will receive one.

If you are an undergraduate student, you may be eligible to receive up to $5,500 a year. The total you can borrow as an undergraduate is $27,500.

If you are a graduate or professional student, you may be eligible to receive up to $8,000 per year. The total you can borrow as a graduate student is $60,000, which includes amounts borrowed as an undergraduate.

Other than interests there are no other charges. However, if you skip a payment, if your payment is late, or if you make less than a full payment, you might have to pay a late charge plus any collection costs.

How will I receive my loan?

The school will apply your loan funds to your school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain, your school will issue you a refund to help pay for your other education expenses.

Furthermore, you could always cancel your Perkins Loan before your loan money is disbursed, you may cancel all or part of your loan at any time by notifying your school. After your loan is disbursed, you may cancel all or part of the loan within certain time frames. Your promissory note and additional information you receive from your school will explain the procedures and time frames for canceling your loan.

Are there any tax credits available for paying back Perkins Loans?

Yes, there are tax incentives for certain higher education expenses, including a deduction for interest on student loans for certain borrowers. This benefit applies to federal and non-federal loans used to pay for postsecondary education costs. The maximum deduction is $2,500 a year.

Is it possible to postpone repayment of a Federal Perkins Loan?

Yes, under certain conditions, you may receive a "deferment" or "forbearance" on your loan, as long as the loan isn’t in default. During a deferment, you’re allowed to temporarily postpone payments, and no interest accrues (accumulates). Also, the school that made you your loan must automatically defer your Federal Perkins Loan(s) during any periods where you perform a service that qualifies you for loan cancellation.

Deferments are not automatic. You must apply for one through your school, generally by using a deferment request form your school can give you. You must file your deferment request on time or you’ll pay a late charge. If you are temporarily unable to meet your repayment schedule but aren’t eligible for a deferment, you could receive forbearance for a limited and specific period. During forbearance, your payments are postponed or reduced, or your repayment period might be extended. Interest continues to accrue, however, and you’re responsible for paying it. Forbearance isn’t automatic, either. You may be granted forbearance in intervals of up to 12 months at a time for up to three years. You must apply in writing for forbearance to the school that made your loan or to the agency the school employs to service your loan. You’ll have to provide documentation to show why you should be granted forbearance. You must continue making scheduled payments until you’re notified that deferment or forbearance has been granted. Otherwise, you could become delinquent or go into default.

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