How to Understand a Perkins Loan

Perkins loans are available to students with demonstrated financial need. Some of the funds for these loans come from the federal government, but most of the money originates from your school. Here are some questions and answers to help you understand Perkins loans.

Difficulty: Moderately Easy

Instructions

1. Are Perkins loans subsidized? Yes, the government pays the interest on these loans while you are in school.

2. Who is eligible for them? Graduate and undergraduate students enrolled at least half-time in classes.

3. Do I have to be broke? Not quite, but they are awarded to students based on financial need.

4. How much can I get? Up to $4,000 per year for undergrads and $6,000 per year for graduate students.

5. Is there a grace period? Yes, repayment starts 9 months after you graduate, leave school or drop below half-time status.

6. Can I get deferments or forbearances? Yes, and you have up to 10 years to repay the loan.

7. What is the interest rate? 5 percent.

Tips & Warnings

• Pell grant recipients get the highest priority for receiving Perkins loans.
• Perkins loans do not have origination or other lender fees, but they do have late payment penalties and collection fees.
• Undergrads can borrow a maximum of $20,000 in Perkins loans while they are in school. Grad students can borrow twice that, but the amount borrowed as an undergrad counts against the total.

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