Federal Perkins Loan


The Federal Perkins Loan program is a college or university-based student loan program.  Perkins Loans are low-interest loans for both undergraduate and graduate students demonstrating exceptional financial need.


Perkins Loans are available to both undergraduate and graduate students.  The college or university is the lender, and the loan is made with government funds.  The loan must be repaid to the college or university.  The program is administered by the financial aid office at participating schools of higher education.

The Free Application for Federal Student Aid, or FAFSA, is used by students to apply for all federally-funded student loans, including the Perkins Loan program.  There are approximately 1,700 institutions of higher learning that participate in this program.

Depending on the year of attendance, the level of demonstrated need, and the school's funding level, the student can:

  • Borrow up to $5,500 for each year of undergraduate study.  The total amount the student can borrow as an undergraduate is $27,500.
  • Borrow up to $8,000 for each year of graduate or professional study.  The total amount a student can borrow under this program is $60,000.  This includes any Federal Perkins Loans the student may have borrowed as an undergraduate student.

Students need to complete a promissory note to receive funds, and the interest rate charged on all loans is 5%.  Repayment begins nine months after graduation or when the student falls below half-time status.  The repayment timeline on these loans is fixed at ten years.  Since Perkins Loans are subsidized, interest does not accrue on the loan until repayment begins.

There were approximately 500,000 students awarded these loans in 2011, with an average award of nearly $2,000.

Related Terms

Direct Loans, PLUS Loans, Federal Work Study, Grants, promissory note