Perkins Loans Explained

A Perkins loan is a government-guaranteed student loan that participating colleges give to students with the highest financial need. 

Eligibility and Funding

Students must complete the FAFSA, or Free Application for Federal Student Aid, to be considered for a Perkins loan. The funds come from the government, and the college acts as the lender. The college determines who will receive the loan and the amount of an individual loan based on a given student's financial need. Students must re-apply each year, as funding for one year does not guarantee funding in following years.

Repayment Terms

There is no interest charged to the student while he or she is enrolled at least part-time in an undergraduate or graduate program. Compared to other federal student loans, the Perkins loan has one of the lowest interest rates. Repayment of the loan begins nine months after the student leaves the school or drops below part-time enrollment status, and the student has a ten-year repayment term. Graduates may have their loan fully or partially canceled by providing services that are outlined in the Perkins loan forgiveness program. Volunteering in the Peace Corps and teaching in an area in which there is a shortage of teachers are two ways to have the loan reduced or canceled.


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