Federal Perkins Loan

Each year, there are thousands of people unable to follow their dreams (education-wise) because of one thing – money. As college / university education becomes increasingly expensive, many students and parents can afford to pay for college expenses. The U.S government is certainly aware of this fact and thus offers a number of loans to help students complete their education. Federal Perkins Loan is one of them, becoming quite popular.

A Federal Perkins Loan, also known as Perkins Loan, is a need-based student loan that is used to assist American college students in financing their post-secondary education. Offered by the U.S. Department of Education, the program is named after Carl D. Perkins, a former member of the U.S House of Representatives from Kentucky. Today, over 1,800 colleges and universities participate in the program.

Borrowing Limit

Like many other federal educational financial programs, Perkins Loans have a cap on how much students are allowed to borrow each year, depending on their financial needs and the school’s funding level. As a rule, the maximum available for undergraduates is $5,500 each year with a lifetime maximum of $27,500. For graduate students, the limit is $8,000 each year with a lifetime maximum of $60,000 (including undergraduate loans).

Repayment Requirements

Compared to traditional bank loans, Perkins Loans usually have a lower interest rate. As these loans are subsidized by the government, interest does not accrue until borrowers begin to repay the loan. After graduation, borrowers are given a 9-month grace period, which means they are allowed to repay their loan in the 10th month upon graduation. After that period, borrowers are required to pay off the loan within a maximum of 10 years. Currently, Perkins Loans carry a fixed interest rate of 5% for the 10-year repayment period.

As a bonus, Perkins Loans can be discharged in whole or in part if students take part in the employment at certain fields (full-time is required), which include:

  • Teacher in low-income areas
  • Special educational teacher
  • Math or science teacher or teacher of any other subject with shortage of teachers
  • Nurse or medical technician
  • Employee of a child or family-service agency in low-income area
  • Law enforcement or corrections officer
  • Peace Corps volunteer

Qualification for a Federal Perkins Loan

To qualify for a Perkins Loan, students are required to be a U.S. citizen or permanent resident of America. In some instances, qualifying non-citizens can also obtain a Perkins Loan. Plus, they need to be enrolled into an eligible school at least half time in a degree program. If you are a male student, you have to be registered with selective service to qualify for a Perkins Loan.

In addition, no history of default on any educational loans is required. Payments missing for 270 consecutive days are regarded as default. If you have defaulted on a student loan, you will not qualify for this type of loan. Be noted that the renewal of their loan annually is subject to academic performance requirements.


If you consider applying for a Perkins Loan, you are required to fill in the Free Application for Federal Student Aid (FAFSA) first. (The application is available at fafsa.ed.gov.) The application requires your basic information, including your educational history, your family’s financial information and income and financial needs. Remember that the deadline is March 15 of each year.

After the application is submitted, both you and your school will receive a copy of your Student Aid Report sent by the government. This report itemizes your expected family contribution and the amount your family should expect to pay for your education. The college will avail of this information to determine your eligibility. If you are granted a loan, you will receive an acceptance letter from your college or university.

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How to Make Your Federal Perkins Loan Repayment

It is no secret that going to college can be expensive whether at a public or private school. There are costs for tuition, books, materials, room, travel allowance and others. With the high cost of college education, not all parents or students can afford to attend a college. Fortunately, there are federal loans available to help students pay for their college education.