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What is a Federal Perkins Loan?

Perkins Loans are loans made by a school to students demonstrating exceptional financial need. Loan funds are provided by the federal government to participating schools. The interest rate is fixed at 5%.

Some schools do not participate in the Perkins Loan program, while other schools that do participate may not receive sufficient funds to satisfy the needs of every eligible student.

The maximum borrowing for undergraduate education is $5,500 per year with a cumulative limit of $27,500. Graduate students may borrow up to $8,000 per year and accumulate as much as $60,000 in Perkins Loans.

Repayment of a Perkins Loan begins nine months after graduating, leaving school, or dropping to below half-time status. The grace period may be different for students attending college less than half-time. You may be allowed as many as 10 years to repay the loan in full. Under certain circumstances you may receive a deferment or forbearance of loan principal and interest. The loan can also be canceled under certain circumstances, such as your death or permanent disability, or if you work in certain public service jobs after leaving school.