A Federal Perkins Loan, or Perkins Loan, was a need-based student loan
part of the Federal Direct Student Loan Program
, offered by the U.S. Department of Education
to assist American
A college (Latin: ''collegium'') is an educational institution or a constituent part of one. A college may be a degree-awarding tertiary educational institution, a part of a collegiate or federal university, an institution offerin ...
students in funding their
Tertiary education, also referred to as third-level, third-stage or post-secondary education, is the educational level following the completion of secondary education. The World Bank, for example, defines tertiary education as including uni ...
. The program was named after Carl D. Perkins
, a former member of the
U.S. House of Representatives
The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together the ...
Kentucky ( , ), officially the Commonwealth of Kentucky, is a state in the Southeastern region of the United States and one of the states of the Upper South. It borders Illinois, Indiana, and Ohio to the north; West Virginia and Virginia ...
Perkins Loans carried a fixed
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
of 5% for the duration of the ten-year repayment period. The Perkins Loan Program had a nine-month grace period, so that borrowers began repayment in the tenth month upon graduating, falling below half-time status, or withdrawing from their college or university. Since the Perkins Loan was subsidized
by the government, interest did not begin to accrue until the borrower began to repay the loan. In the 2009–2010 academic year, the loan limits for undergraduates were $5,500 per year with a lifetime maximum loan of $27,500. For graduate students, the limit was $8,000 per year with a lifetime limit of $60,000 (including undergraduate loans).
Perkins Loans were eligible for Federal Loan Cancellation
for individuals choosing to work in a number of different public service occupations including early childhood education, elementary and secondary school teaching, speech therapy, nursing, law enforcement, librarian, public defense attorney, fire fighting and certain active duty military postings. Depending on the field of employment, further restrictions on the setting of employment may apply. For example, forgiveness for teachers may be restricted to designated low-income schools or specific teacher shortage areas such as math, science, and bilingual education and forgiveness for nurses requires employment at a non-profit medical facility. A percentage of the loan was cancelled for each year spent teaching full-time (as long as the loan remains in good standing). This cancellation also applies to Peace Corps Volunteers. Cancellation typically occurs on a graduating scale: 15% for year 1, 15% for year 2, 20% for year 3, 20% for year 4, 30% for year 5. These percentages were based on the original debt amount. Thus after 3 years of service, one would have 50% of their original debt cancelled.
On September 30, 2017, the Federal Perkins Loan program failed to renew in Congress, thus effectively ending the loan program.
* Stafford Loan
* Student loans in the United States
U.S. Dept. of Education: Federal Perkins LoansU.S. Dept. of Education: Federal Perkins Loan Teacher Cancellation
Student loans in the United States