Federal Perkins Loan

Federal Perkins Loans also termed as Federal Loans is a low-interest student loan that funds both undergraduate and graduate students with uncustomary financial need.

Updated by Deepthi Raj on 25th September 2018

Federal Perkins Loan

Federal Perkins loan is low-interest, government-backed loans that help you pay for your school expenses whether you are an undergraduate or a graduate student. 

The rate of interest for a Perkin loan is 5%. Perkins loan will be provided to you by the school in which you are studying in.

These loans are made up of funds provided by the government and also contributions made by the school.

A Federal Perkins Loan has a static interest rate and needs to be refunded beginning of grace period that is a duration of 9 months.

Federal Perkin loan is presented by the U.S Department of Education to support need-based students with their educational expenses

How do you apply for Federal Perkin loan?

To fill an application for Perkin loans the following ways can be put into action

Step 1 – Students can fill out the Free Application for Federal Student Aid (FAFSA) online

Step 2 – Students can obtain FAFSA paper from high school, local library, postsecondary school

Step 3 – If a student fails to get relevant data from the above steps, he/she can call up Federal Student Aid Information Centre at 1-800-4-FED-AID (1-800-4333243).

Step 4 – If already applied for a federal aid previous year, a student can file a renewal FAFSA for the following year

When can student debt be discharged?

Cancellation condition Amount is forgiven

Debtor's total and permanent disability or death


Full-time special education educators

Up to 100%

Full-time educator in a school serving disciples receiving low income

Up to 100%

Serving as a full-time educator for subjects such as maths, science, languages, bilingual educator in areas with a shortage of teacher

Up to 100%

A full-time qualified skilled worker of early intervention facilities for the disabled

Up to 100%

A full-time nurse or medical specialist

Up to 100%

Working as full-time law administration or corrections officer

Up to 100%

Full-time staff associate in the education module of a head start program

Up to 100%

Service in the U.S Armed forces

Up to 100%

Service as Librarian with a Master’s degree in a Title I school or serving as public library Title I schools

Up to 100%

VISTA or Peace Corps volunteer

Up to 70%

Serving as a Faculty member at a tribal college or university

Up to 100% 

 What are the Eligibility Requirements?

  • The student must be an undergraduate, graduate, or professional student with exceptional financial requirements

  • Students need to be enrolled full-time or part-time

  • Every student applying for federal Perkin loan must be attending a school that takes part in the Federal Perkins Loan Program.

  • One must meet school’s criteria

  • Students need to demonstrate significant financial requirement as determined by your FAFSA

Attributes of Federal Perkin Loan

  • Federal Perkin loan provides a lower rate of interest i.e., 5.00% which is less compared to other federal student loans.

  • Federal Perkin Loan offers a grace period of nine months. This is comparatively longer than other federal student loans which usually have six-month grace periods.

  • For an undergraduate, the loan amounts up to $5,500 for a year, else $27,500 during their entire college career

  • For a graduate or professional student, the loan amounts up to $8,000, else $60,000, which comprises amount borrowed during undergraduate program

Master promissory note for Federal Perkin loan

The Master Promissory Note is defined as a legal document in which a student promise to repay loans and any accrued interest and fees to the department of the U.S Department of Education. This also includes and explains terms and conditions of the issued loan, how interest is calculated, when interest is charged, available repayment plans, deferment, and cancellations. Master Promissory holds good even in the following conditions

  • Even if a student doesn’t complete his/her education

  • When a student can’t get a job after education

  • If a student doesn’t like the education received.


A Federal Perkin Loan is a low-interest loan provided for undergraduate as well as graduate students. The loan amount is funded by the government as well as contributions by the school. The rate of interest for a Perkin loan is 5%.


  1) What is the Federal Perkins Loan Program?

The loans made through the Federal Perkins Loan Program are often called as Perkins Loans and this is a low-interest federal student loan for graduate and undergraduate students. Not all schools participate in this program. The fund you receive would be depended upon your financial needs and the funds available with the college.

  2) Are Federal Perkins Loans subsidized?

All these Federal Perkins Loans are subsidized by the government. Which means that the government will pay the interest when you are in school.

  3) How much can I borrow from the Perkins Loan Program?

According to the federal government Perkins loans cap for undergraduates is $5,500 a year and for graduate students at $8,000 a year, but the final decision for, the amount each student gets is determined by the college. The total amount that you can borrow as an Undergraduate is $27,500 and for Graduate is $60,000 including the amount borrowed as an undergraduate.

  4) Does everyone get a Perkins loan?

No, college awards these loans to students with financial need.

  5) Is this loans tax deductible?

This depends on your income, for a single person if you earn less than $80,000 then the education loan tax is deductible.

  6) What is the downside of federal loans?

Unlike other loans like that of Credit card and mortgages debt, which can be canceled if you fill for bankruptcy, education loans of all types must be paid. Most bankruptcy courts will not cancel them unless your situation is extremely dire.