A Federal Perkins Loan is a low-interest (5%) loan for undergraduate and graduate students with "exceptional" financial need.
The U.S. Department of Education provides a programmed amount of funding to the school. In turn, the school determines which students have the greatest need. The school combines federal funds with some of its own funds for loans to qualifying students. To apply for this loan program, students must complete the FAFSA (Free Application for Federal Student Aid).
The school will pay the student directly (usually by check) or apply the loan amount to school charges. The loan is received in at least two payments during the academic year.
Perkins loans share many of the characteristics of subsidized Stafford loans. The most notable differences are no fees and a longer grace period.
Eligibility
- Borrower must be a U.S. citizen or permanent resident, full or part-time undergraduate or graduate student.
Loan limits
- Undergraduate: $4,000 per year to $20,000 maximum.
- Graduate: $6,000 per year to $40,000 maximum.
Interest rates
- Fixed for the life of the loan at 5%.
- Student pays no interest while in school.
Total origination or insurance fees
Repayment
- Term: Up to 10 years.
- Minimum Payment: $40 per month per loan.
- Repayment Begins: Nine months after leaving school.
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