Federal 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
financial need. Your school is your lender. The loan is made with government
funds with a share contributed by the school. You must repay this loan to your
How much can I
Depending on when you apply, your
level of need, and the funding level of the school, you can borrow up to
- $4,000 for each year of
undergraduate study (the total amount you can borrow as an undergraduate is
- $6,000 for each year of
graduate or professional study (the total amount you can borrow as a
graduate/professional student is $40,000, including any Federal Perkins Loans
you borrowed as an undergraduate).
Is there a
charge for this loan?
A Perkins Loan borrower is not
charged any fees to take our the loan. However, if you skip a payment, make a
payment late, or make less than a full payment, you might have to pay a late
charge. If your failure to make payments persists, you might have to pay
collection costs as well.
How will I be
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.
Will I have an
opportunity to cancel my loan after I sign the promissory note?
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 if you inform 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 returning the check.
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 (you may have longer than
nine months if you are on active duty with the military). 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 I
have to repay 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 conditions,
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. See Borrower Rights for the list of deferments available.
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
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 up to 12-month 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 my Federal
Perkins Loan be canceled?
Yes. The loan can be cancelled if
the borrower dies or becomes totally and permanently disabled. A loan can also
qualify for cancellation under certain other conditions-as long as the borrower
is not in default. See chart below for the list of cancellation provisions. For
more information, contact your financial aid office.
If you serve as an enlisted
person in certain specialties of the Armed Forces, the U.S. Department of
Defense might, as an enlistment incentive, repay a portion of your student loan.
Note that this is not a cancellation. If you think you qualify, contact your
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.