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Federal Perkins Loans

What is a Federal Perkins Loan?

A Federal Perkins Loan is a low-interest (5 percent) loan for eligible undergraduate, postbaccalaureate, and graduate students with a preference to students with exceptional financial need. This federal program is made possible by allocations of federal funds to the institution that must be matched in part by campus funds. Perkins Loans are "revolving" in nature since funds collected from previous students enable the institution to make new loans to other students.

How much can you borrow?

Depending on when you apply, your level of need, and the loan funds available at your school, you can borrow up to...

• $4,000 for each year of undergraduate study. The total amount you can borrow as an undergraduate is $20,000, and you are limited to $8,000 if you have not completed two years of undergraduate work.
• $6,000 for each year of graduate or professional study. The total amount you can borrow as a graduate/professional student is $40,000. (This includes any Federal Perkins Loans you borrowed as an undergraduate.)

Are there any fees for this loan?

A Perkins Loan borrower is not charged any fees to obtain the loan. However, when you're out of school and repaying the loan, if you skip a payment, make a payment late, or 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.

When do you get the money?

Your school will either pay you directly (usually by check) or credit your account. Generally, you'll receive the loan in at least two payments during the academic year.

Can you cancel your loan after you applied?

Yes. Your school must notify you in writing whenever it credits your account with your Perkins Loan funds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan by informing your school that you wish to do so within 14 days after the date that your school sends you this notice, or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period. If you receive Perkins Loan funds directly by check, you may refuse the funds by not endorsing the check.

When do you have to pay back the 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 financial aid administrator 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 you have to repay per month?

Your monthly payment amount will depend on whether a minimum payment is required or 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% loans over a 10-year period.

Examples of Typical Payments for Perkins Loan Repayment

Total Loan Amount	Number of Payments	Monthly Payment	Total Interest Charges	Total Repaid
$3,000	119 1	$31.84 $28.90	$817.86	$3,817.86
$5,000	119 1	$53.06 $49.26	$1,363.40	$6,262.40
$15,000	119 1	$159.16 $150.81	$4,090.85	$19,090.85

Can you postpone paying back your Federal Perkins Loan?

Yes. Under certain circumstances, you can receive a deferment or forbearance on your loan. During a deferment, you are allowed to temporarily postpone payments on your loan, and no interest accrues. 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 disbursed on or after July 1, 1993. If you have a loan that was disbursed before July 1, 1993, check your promissory note for the deferments that apply to that loan.

Deferments are not automatic. You must apply for one through your school 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. For more details on deferments, contact your financial aid office.

If you are temporarily unable to meet your repayment schedule but are not eligible for a deferment, you can receive forbearance for a limited and specific period. During forbearance, your payments are postponed or reduced. Interest continues to accrue; you are responsible for it.

Forbearance isn't automatic either. You may be granted forbearance in 12-month-maximum intervals for up to three years. You must apply in writing for forbearance 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 deferment or forbearance has been granted.

Can your Federal Perkins Loan be canceled?

Yes. If the borrower dies or becomes totally and permanently disabled, the loan can be canceled. A loan can 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.

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. Note that this is not a cancellation. 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 may grant deferment, forbearance, or cancellation, or make other decisions concerning your loan.

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