A Federal Perkins Loan (also known as a Perkins Loan) is a need-based subsidized student loan offered by the United States Department of Education to help students pay for higher education. Named after Carl D. Perkins, a former member of the U.S. House of Representatives, the Perkins Loan is a low-interest student loan at a fixed 5 percent rate. In general, the Perkins Loan is intended for undergraduate and graduate students with exceptional financial need. Here are a few Perkins Loan FAQs.
What Are Perkins Loan Requirements?
To qualify for the Perkins Loan, students must first submit the Free Application for Federal Student Aid (FAFSA). Other requirements include:
- U.S. citizenship, eligible non-citizenship, or permanent residency
- Enrollment in a degree program from an eligible institution of higher learning
- Satisfactory academic progress
- No unresolved financial issues on educational loans and grants
- Satisfaction of all Selective Service requirements
Once the U.S. Department of Education has provided the funds to the enrolled institution, the institution’s financial aid office determines which students demonstrate the greatest financial need. The school pays students directly or applies the Perkins Loan to the tuition costs.
Is There a Perkins Loan Borrow Limit?
Students are able to borrow up to $5,500 annually and up to $27,500 for an undergraduate degree. Graduate students are able to borrow up to $8,000 every year and up to $60,000 per degree, including amount borrowed at the undergraduate level. Non-undergraduate or non-graduate students are able to borrow up to $11,000. Ultimately, the amount a student receives depends on various factors, such as date of application, financial need, and level of funding at the particular post-secondary institution.
Are There Any Perkins Loan Fees?
Other than the 5 percent interest rate, there are no other fees associated with the Federal Perkins Loan. However, if a student misses a payment, pays late, or makes less than the minimum payment amount, late charges may apply.
Can I Cancel the Perkins Loan?
Students can cancel the loan even after signing the promissory note indicating agreement to the terms of the loan. Post-secondary schools are required to notify students in writing once Perkins Loan funds are available no more than 30 days prior or after the account is credited. Students are able to cancel all or a portion of the loan if he or she either notifies the school within 14 days of receiving initial notice of funding to the account or by the first day of the payment period, whichever comes last. If a student receives the funds directly by check, he or she can refuse the loan by simply returning the check.
How Long Do I Have Before I Have to Pay Back the Perkins Loan?
If a student attends school on at least a half-time basis, he or she has nine months either after graduation, leaving the institution, or decreasing to under half-time before loan repayment must begin. This time frame is called a grace period. For students attending school less than half-time, specific schools have their own grace periods. At the end of the grace period, students must begin repaying the loan, with up to 10 years allowed for complete repayment. To repay the Federal Perkins Loan, students make payments directly to their school. If a student re-enrolls in school on a half-time basis during the grace period and gains approval for an in-school deferment, he or she may be granted an additional nine-month grace period the next time he or she stops attending school. If a student re-enrolls after the grace period has ceased, he or she will only have a six-month grace period.
Is There a Way to Defer the Perkins Loan?
If a student encounters extenuating circumstances making it temporarily difficult to make loan payments, he or she may qualify for a deferment, in which regular loan payments are suspended for a period of time.