PERKINS LOAN

What is a Federal Perkins Loan?

A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need. Federal Perkins Loans are made through a school's financial aid office---your school is your lender and the loan is made with government funds. You must repay this loan.

How much can I borrow?

Depending on when you apply, your level of need, and the funding level of the school, you can borrow up to---

$3,000 for each year of undergraduate study. The total amount you can borrow as an undergraduate is $15,000.

$5,000 for each year of graduate or professional study. The total amount you can borrow as a graduate/professional student is $30,000. (This includes any Federal Perkins Loans you borrowed as an undergraduate.)

Is there a charge for this loan?

A Perkins Loan borrower is not charged an origination fee or an insurance premium. However, if you skip a payment, if it's late, or if you make less than a full payment, you may have to pay a late charge plus any collection costs. Late charges will continue until your payments are current.

How will I be paid?

Your school will either pay you directly (usually by check) or credit your account. You'll receive the loan in at least two payments during the academic year, unless your total Federal Perkins Loan is $500 or less, in which case a single payment per academic year is allowed.

When do I pay back this loan?

If you're attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment. This is called a grace period. If you're attending less than half time, check with your FAA to determine your grace period. At the end of your grace period, you must begin repaying your loan. You may be allowed up to 10 years to repay.

How much will I have to pay each month?

Your monthly payment amount will depend on the size of your debt and the length of your repayment period.

The chart below shows typical monthly payments and total interest charges for three different 5-percent loans over a 10-year period.

Can I postpone repayment of my Federal Perkins Loan?

Yes. Under certain circumstances, you can receive a deferment or forbearance on your loan. During a deferment, no payments are required, and interest that accrues will be paid by the federal government. During forbearance, your payments are postponed or reduced. The government does not pay the interest; you are responsible for it and if you don't pay the interest as it accrues, it will be capitalized. You can't receive a deferment or forbearance if your loan is in default.

You may receive a deferment under certain conditions, such as unemployment. See the Loan Deferment Summary for the list of deferments available if your Perkins Loan was first disbursed on or after July 1, 1993. If you have a loan that was first disbursed before July 1, 1993, check your promissory note for the deferments that apply to that loan. During a deferment, interest will not accrue and no payments are required.

Deferments are not automatic. You must apply for one through your school, 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. You must continue making scheduled payments until you receive notification that the deferment has been granted. For more detail on deferments, contact your financial aid office.

Forbearance isn't automatic either. You may be granted forbearance in 12-month intervals for up to three years. You must apply for forbearance in writing through the school that made your loan or the agency the school employs to service your loan. You'll have to provide documentation to support your request for forbearance. You must continue making scheduled payments until you are notified that forbearance has been granted.

Can my Federal Perkins Loan be cancelled?

Yes. If the borrower dies or becomes totally and permanently disabled, the loan can be canceled. A loan may also qualify for cancellation under certain other conditions---as long as the borrower is not in default. See the Discharge/Cancellation Summary for the list of cancellation conditions. For more information, contact your financial aid office.

Although not a cancellation, if you serve as an enlisted person in certain specialties of the U.S. Army, the Army Reserves, the Army National Guard, or the Air National Guard, the U.S. Department of Defense may, as an enlistment incentive, repay a portion of your Federal Perkins Loan. If you think you qualify, contact your recruiting officer.

If you have any questions about the terms of your Federal Perkins Loan, repayment obligations, deferment, forbearance, or cancellation, check with the school that made the loan. Only that school can grant deferment, forbearance, or cancellation, or make other decisions concerning your loan.

Return to Perkins Loan Page

Return to Loan Page