Perkins Loans

A Perkins loan is a need-based loan made by a school to an undergraduate or graduate or professional student enrolled at least half time. A Perkins loan has a 5-percent fixed interest rate and no loan fee. Not all schools participate in the Federal Perkins Loan Program, and the program is scheduled to end for all schools after September 30, 2017.

Each school that participates in the Federal Perkins Loan Program has a very limited amount of funds with which to make Perkins Loans, so it’s important for a student to submit his or her Free Application for Federal Student Aid (FAFSA) early to be considered for one. A student awarded a Perkins Loan must sign a Master Promissory Note (MPN).

The chart below shows the maximum Perkins Loan funds a student can receive. The amount a student is awarded may be less than the maximum, and will depend on the student’s financial need, the student’s other estimated financial assistance, and the availability of funds at the school.

Undergraduate students Up to $5,500 a year (aggregate maximum of $27,500 as an undergraduate)
Graduate students Up to $8,000 a year (aggregate maximum of $60,000, including undergraduate loans)
Undergraduate students Up to $5,500 a year (aggregate maximum of $27,500 as an undergraduate)
Graduate students Up to $8,000 a year (aggregate maximum of $60,000, including undergraduate loans)

How the Funds are Delivered

A student’s school is the Perkins Loan lender and disburses the loan funds directly to the student or credits the student’s school account. Generally, the school disburses the loan in at least two payments during the academic year.

Paying Back the Loan

A student begins repayment on a Perkins Loan after ceasing to be enrolled at least half time and after a nine-month grace period. Borrowers have as long as 10 years to repay the loan. Perkins Loans do not have repayment plan options. Borrowers must repay the school that loaned the money, or its loan servicing agent. The minimum payment is $40 per month.

Perkins Loans have deferments and forbearances, and loan cancellation options are available under certain circumstances. The MPN provides information on these options. A student must apply for them through the school or its loan servicing agent, and approval is not automatic.

Perkins Loans may be included in a Direct Consolidation loan; however, a student who takes advantage of this option will lose cancellation benefits that are available only under the Federal Perkins Loan Program.