Federal Perkins Loans

Need-Based
A need-based federal loan for students with exceptional financial need these loans are awarded by participating schools at 5% interest rate for undergraduates and graduate students. Need is determined by a federal formula using the information provided on the FAFSA. Loans are made with government funds by the school serving as the lender. There are no insurance premiums or origination fees for Perkins loans. 

Award Amounts & Terms
Undergraduate students can borrow up to $4,000 for each year of study and up to $6,000 for graduate students. In total, eligible students can borrow up to $20,000 for undergraduate study, and up to $40,000 for graduate and professional study. Your school will either pay you directly or credit your account. Loans are disbursed in at least two payments during the academic year, unless the total loan is $500 or less, in which case the loan may be made in a single payment. 

Perkins loan funds are usually very limited; so few students receive the maximum award amounts. You pay no interest on Perkins loans while enrolled in school at least half time. Perkins loan borrowers must begin repaying their loan nine months after they graduate, leave school or enroll less than half time. Depending on how much is borrowed, repayment may be up to 10 years. Late fees are accessed due to late, missed or less than full payments when due. 

Students may be able to borrow more than these amounts if you're participating in a study-abroad program, or if the school has a default rate of less than 15% and participates under the Expanded Lending Option. 

Repayment
Loan repayment begins nine months after you graduate, leave school, or drop below halftime status. You may have longer than nine months if you are on active duty with the military. For those attending less than half time, they check should “ü” with their financial aid administrator to determine their grace period. At the end of the grace period, borrowers must begin repaying their loan. Perkins Loan borrowers may be allowed up to 10 years to repay.

Monthly payment amount will depend on the size of the debt and the length of the repayment period.

The following table shows typical monthly payments and total interest charges for three different loans over a 10-year period at 5% interest:

           Examples of Typical Payments for Perkins Loan Repayment

Deferment & Forbearance
Under certain circumstances, Perking loans borrowers can receive a deferment or forbearance. During a deferment, borrowers are allowed to temporarily postpone payments on their loan, and no interest accrues. Deferments are provided under certain conditions, such as unemployment.

Deferments are not automatic; borrowers must apply for one through their school by using a deferment request form. Deferment request forms must be submitted on time or the borrower will pay a late charge. Check “ü” with the financial aid office for more information.

Forbearance is available if the borrower is temporarily unable to meet their repayment schedule but is not eligible for a deferment. Forbearance is available for a limited and specific period. During forbearance, payments are postponed or reduced but interest, which you are responsible for, continues to accrue. 

Forbearance may be granted 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. Borrowers must provide documentation to support their request for forbearance. Scheduled payments must continue to be made until you are notified that deferment or forbearance has been granted.

Cancellation
Students have the opportunity to cancel their Perkins loan after they sign the promissory note. Borrowers may cancel all or a portion of their loan if they inform the school that they wish to do so within 14 days after the date that the school sends them the notice that their account has been credited with the Perkins Loan, or by the first day of the payment period, whichever is later. The school can tell you the first day of the payment period. For those receiving the Perkins Loan funds directly by check, they may refuse the funds by not endorsing the check.

Perkins loans 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. Check “ü” with the financial aid office for more information.

                    Perkins Discharge/Cancellation Summary