Perkins Loans

Campus-Based Student Financial Aid from the Government

The Federal Perkins Loan is a low-interest, long-term loan is specially designed for students with serious financial hardship. It is the most borrower-friendly of the loan products in the government’s portfolio. Participating colleges and universities receive annual loan allowances from the U.S. Department of Education, and from theses funds, along with funds the college provides, the school makes Perkins Loans available to eligible students. Perkins Loans are more difficult to get than other Federal need-based aid, the subsidized Stafford Loans and Pell Grants. The key to winning a Perkins Loan, besides demonstration of exceptional economic need, is early application for admission to your school along with early application for federal student aid.

For students who qualify, the Perkins loan has some appealing features:

  • Low, fixed 5% interest rate
  • Optional loan cancellation for eligible borrowers
  • Available to eligible undergraduate and graduate students
  • 9-Month grace period
  • No application fees
  • No credit checks
  • It is a subsidized loan, which means the Federal government picks up the tab for the interest that accrues while you are in school and during the grace period.

Applying For a Perkins Grant

All Federal financial aid programs require students to fill out and submit the Free Application for Federal Student Aid, or FAFSA. Once you have submitted your FAFSA and it has been reviewed, you will receive your Student Aid Report, which details the amount of your Expected Family Contribution (EFC). This is the amount of money you or your family are responsible for contributing to your education.


Within a few weeks, you will receive follow up letters from the colleges to which you have applied detailing all types of financial aid for which you have qualified, including the Perkins Loan. This letter must be returned to the college or university indicating what financial aid you are accepting. If you are approved for a Perkins Loan you must coordinate with your school immediately to secure the loan and receive your financial aid money. Loan funds are limited and they are awarded on a first-come, first-served basis. The earlier you respond, the better your chances of getting the funding you need.

Qualifications for a Perkins Loan

The chief determining factor of a student’s eligibility for a Perkins Loan is financial need. A student must fall within a certain income bracket and the student’s EFC must be rated low on the Federal scale. Other requirements include:

  • Student must be enrolled in an accredited school at least half-time.
  • Student must be enrolled in a college or institution that participates in the program.
  • Student must be a U.S. citizen, a legal permanent resident or an eligible non-citizen.
  • Student must no history of defaulting on prior student loans.
  • Student must be registered with the Selective Service where applicable.
  • Student must meet minimum GPA.


How Much Can I Receive in a Perkins Loan?

The loan limits are $5,000 per year for undergraduates and $8,000 per year for graduate students. In reality, what you actually receive depends on the funds available at the time. Schools have only a limited amount of Perkins money, and whether you receive a full amount depends on what is in the fund when you are accepted to the school and when you accept admission and your financial aid package.

Entering Repayment

During the final weeks of your college career, your school will contact you and provide loan repayment details relative to your Perkins Loan. You will have the benefit of a 9 month grace period in which to become settled and find a job before any repayment schedule begins. This grace period is one of the major bonuses of the Federal Perkins Loan program, allowing students some time to enter the workforce before any loan payments must be made.

 The average length of repayment of the loan is approximately 10 years, barring any loan defaults or loan deferments.

What to Do If Repayment Starts to Get Tough 

Lower income students can graduate with a lot of student debt, so it is no surprise that many lenders automatically offer alternative repayment programs that may be an option if your financial situation makes it difficult for you to repay your loans on time.

  •  When you lose your job, incur large medical expenses, or for any other reason are unable to make your payments over the short-term, you may apply to your Perkins Loan servicing company for a hardship deferment. The deferment stops your loan payments will be waived for up to six months, at which point you are required to reapply if you still need the deferment.
  • If you have multiple federal student loans, send monthly payments to a number of different billing agencies, and sometimes struggle to make the payments, you may be a good candidate for a federal loan consolidation.  If you consolidate your loans, including your Perkins Loan, you pay one monthly payment. Ideally the amount you send out each month will be smaller than what you had been responsible for, but your payment term will be extended. That means you will pay more in the long run, but if it keeps your financial house in order, it is worth it.


Student Teachers Can Get the Perkins Loan Cancelled

The Cancellation Option for Teachers is a significant benefit of the Perkins Loan program.  Students who agree to take up full time teaching positions in low-income public school districts, or take positions teaching in certain subject areas may be eligible for cancellation of all or part of their Perkins loan. Check with your college for more information regarding any loan forgiveness programs for which you may be eligible.