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Perkins Loans

Perkins Loans

Perkins Loans

Federal Perkins Loans were once a critical financial aid option for many college students in the United States. Although the program ended in 2017, its impact is still relevant for borrowers repaying their loans or seeking forgiveness. This article explores a Perkins Loan, its eligibility for forgiveness, and the application process used before the program’s discontinuation.

What is a Federal Perkins Loan?

A Federal Perkins Loan was a student loan offered to undergraduate and graduate students with exceptional financial need. The program was named after Carl D. Perkins, a former U.S. Representative who championed education and vocational training.

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Key Characteristics of Perkins Loans

    • Need-Based Aid: Perkins Loans were designed for students with significant financial need. Financial need was determined based on the information provided in the Free Application for Federal Student Aid (FAFSA).

    • Fixed Interest Rate: Perkins Loans had a fixed interest rate of 5%, which was relatively low compare to other types of student loans.

    • School-Based Funding: Unlike other federal loans, Perkins Loans were funded by the federal government and the educational institution. The school’s financial aid office disbursed the funds and managed the loan.

    • Loan Limits: The maximum amount an undergraduate student could borrow was $5,500 per year and $27,500. For graduate students, the limit was $8,000 per year and $60,000 in total (including undergraduate loans).

    • Grace Period: Borrowers were granted a nine-month grace period after graduating, leaving school, or dropping below half-time enrollment before they had to start repaying their Perkins Loans.

    • Deferment and Forbearance Options: Perkins Loans offered deferment and forbearance options. Allowing borrowers to temporarily postpone payments under certain conditions. Such as returning to school or experiencing economic hardship.

Are Perkins Loans Eligible for Forgiveness?

Yes, Perkins Loans are eligible for various forgiveness and cancellation programs. These programs were design to encourage borrowers to pursue careers that benefit the community, such as teaching, nursing, and public service. Here are some of the primary forgiveness options available:

Perkins Loan Cancellation

Perkins Loan Cancellation allows a percentage of the loan to be cancel for each year of qualifying service in eligible professions. In many cases, up to 100% of the loan can be forgiven over five years.

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Eligible Professions for Cancellation

    1. Teachers: Teachers who work full-time in a low-income school or certain subject areas with a shortage of qualified teachers (e.g., math, science, special education) can have a portion of their loan canceled each year.

    1. Nurses and Medical Technicians: Full-time nurses and medical technicians can qualify for loan cancellation over five years of service.

    1. Law Enforcement and Corrections Officers: Full-time employment in law enforcement or as a corrections officer can qualify for loan cancellation.

    1. Public Defenders: Full-time public defenders can also benefit from loan cancellation.

    1. Peace Corps and AmeriCorps VISTA Volunteers: Volunteers serving in the Peace Corps or AmeriCorps VISTA can receive cancellation benefits.

    1. Military Service: Members of the U.S. Armed Forces who serve in areas of hostility may qualify for loan cancellation.

Perkins Loan Discharge

Perkins Loans may be discharge under certain conditions:

    1. Total and Permanent Disability: Borrowers who become totally and permanently disabled can have their Perkins Loans discharged.

    1. Death: If a borrower passes away, the remaining balance on their Perkins Loans is discharge.

    1. Bankruptcy: In rare cases, Perkins Loans can be discharge in bankruptcy if the borrower can demonstrate that repaying the loan would cause undue hardship.

    1. School Closure: The loan may be discharge if the school closes while the borrower is enroll or shortly after they withdraw.

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What is a Perkins Loan?

To summarize, a Perkins Loan was a low-interest federal student loan provided to students with exceptional financial needs. It was a key component of many students financial aid packages until the program ended in 2017. Perkins Loans had unique features, including a fixed 5% interest rate, school-based funding, and various options for forgiveness and cancellation.

How to Apply for a Perkins Loan

Although the Perkins Loan program has ended, understanding the application process can provide insight into how financial aid programs work and what students should expect when applying for similar types of aid.

Step-by-Step Application Process

Complete the FAFSA:

The first step in applying for federal student aid, including Perkins Loans, is to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA collected information about the students and their family’s financial situation to determine eligibility for need-based aid.

Review Financial Aid Package:

After submitting the FAFSA, students receive a financial aid package from their chosen institution. This package outlines the types of aid for which the student qualifies, including grants, scholarships, work-study, and loans.

Check Eligibility for Perkins Loan:

Students who demonstrate exceptional financial need might be eligible for a Perkins Loan. The school’s financial assistance office determined eligibility and the loan amount based on the student’s financial need and available funds.

Accept the Loan:

Students offered a Perkins Loan had to accept it as part of their financial aid package formally. This typically involved signing a promissory note agreeing to the loan’s terms and conditions.

Complete Entrance Counseling:

First-time borrowers must complete entrance counseling before receiving loan funds. This ensures they understand their rights and responsibilities as borrowers.

Loan Disbursement:

Once all requirements are met, the school disburses the loan funds, which are typically applied directly to the student’s account to cover tuition and other education-related expenses. Any remaining funds are given to the student for different costs.

Manage the Loan:

Students should keep track of their loans, understand the terms, and prepare for repayment while in school. The school’s financial aid office typically provides resources to help students manage their loans.


Perkins Loans played a significant role in making higher education accessible to students with exceptional financial needs. Although the program ended in 2017, many borrowers continue to feel the impact of these loans. Understanding what Perkins Loans are, their eligibility for forgiveness, and how they were applied can provide valuable insights into the broader landscape of student financial aid.

Exploring forgiveness and cancellation options can provide significant financial relief for borrowers with existing Perkins Loans, especially those in public service professions. While new Perkins Loans are no longer available, the principles of need-based aid, low interest rates, and targeted forgiveness programs remain essential elements of the student financial aid system.


Q1: Who is eligible for a Perkins Loan?

A: Eligibility is based on financial need as determined by the Free Application for Federal Student Aid (FAFSA). Undergraduate, graduate, and professional students with exceptional financial need can qualify

Q2: When does repayment begin for a Perkins Loan?

A: Repayment begins nine months after you graduate, leave school, or drop below half-time enrollment.

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