Q & A About Perkins Loans
Federal Perkins Loan is a low-interest (5 percent) loan for both
undergraduate and graduate students with financial need. Your
school is your lender. The loan is made with government funds,
and your school contributes a share. You must repay this loan to
How much can I borrow?
on when you apply, your level of need, and the school’s
funding level, you can borrow up to $4,000 for each year of
undergraduate study (the total amount you can borrow as an
undergraduate is $20,000); $6,000 for each year of graduate or
professional study (the total amount you can borrow as a
graduate/ professional student is $40,000, including any
Federal Perkins Loans you borrowed as an undergraduate).
Other than interest, is
there any charge to get these loans?
you’re not charged any fees to take out the loan. But, if you
skip a payment, make a payment late, or make less than a full
payment, you may have to pay a late charge. If you continue not
making payments as required, you might have to pay collection
costs as well.
How will I be paid?
school will either pay you directly (usually by check) or credit
your account. Generally, you’ll receive the loan in at least
two payments during the academic year.
Can I cancel the loan if I
change my mind, even if I’ve signed the promissory note
agreeing to the loan’s terms?
Your school must notify you in writing whenever it credits your
account with your Perkins Loan funds. The school must send you
this notification no earlier than 30 days before, and no later
than 30 days after, the school credits your account. You may
cancel all or a portion of your loan if you inform your school
you wish to do so within 14 days after the date your school
sends you this notice, or by the first day of the payment
period, whichever is later. (Your school can tell you the
first day of your payment period.) If you receive Perkins Loan
funds directly by check, you may refuse the funds by returning
When do I pay back this
you’re attending school at least half time, you have nine
months after you graduate, leave school, or drop below half time
status before you must begin repayment (you might have longer
than nine months if you’re on active duty with the military).
This period of time is called a grace period. If you’re
attending less than half time, check with your financial aid
administrator to determine your grace period. At the end of your
grace period, you must begin repaying your loan. You may be
allowed up to 10 years to repay.
How much will I have to
repay each month?
monthly payment amount will depend on the size of your debt and
the length of your repayment period.
Are there any tax credits
available for paying back these loans?
there are tax incentives for certain higher education expenses,
including a deduction for student loan interest for certain
borrowers. This benefit applies to federal and nonfederal
loans used to pay for postsecondary education costs. The
maximum deduction is $2,500 a year.
Is it ever possible to
postpone repayment of my Federal Perkins Loan?
under certain conditions, you can receive a deferment or
forbearance on your loan, as long as the loan isn’t in
default. During a deferment, you’re allowed to temporarily
postpone payments, and no interest accrues (accumulates).
Also, the school that made you your loan must automatically
defer your Federal Perkins Loan(s) during any periods where you
perform a service that qualifies you for loan cancellation.
are not automatic. You must apply for one through your school,
generally by using a deferment request form your school can give
you. You must file your deferment request on time or you’ll
pay a late charge. For more details on deferments, contact your
school’s financial aid office.
you temporarily can’t meet your repayment schedule but
aren’t eligible for a deferment, you can receive forbearance
for a limited and specific period. During forbearance, your
payments are postponed or reduced, or your repayment period
might be extended. Interest continues to accrue, however, and
you’re responsible for paying it.
isn’t automatic either. You may be granted forbearance in
intervals of up to 12 months at a time for up to 3 years. You
must apply in writing for forbearance to the school that made
your loan or to the agency the school employs to service your
loan. You’ll have to provide documentation to show why you
should be granted forbearance.
must continue making scheduled payments until you’re
notified that deferment or forbearance has been granted.
Otherwise, you could become delinquent or go into default.
Is it ever possible to
have my Federal Perkins Loan canceled?
Federal Perkins Loans can be canceled if the borrower dies or
becomes totally and permanently disabled, for example. A loan
can also qualify for cancellation under certain other
conditions, as long as you’re not in default. For more
information, contact your financial aid office.
you serve as an enlisted person in certain specialties of the
Armed Forces, the U.S. Department of Defense might, as an
enlistment incentive, repay a portion of your student loan.
Note that this is not a cancellation. For more information,
contact your recruiting officer.
type of repayment assistance (again, not a cancellation) is
available through the U.S. Department of Health and Human
Services’ Nursing Education Loan Repayment Program (NELRP).
This program will help repay student loans for registered nurses
in exchange for their service in eligible facilities located in
areas experiencing a shortage of nurses. All NELRP participants
must enter into a contract agreeing to provide full-time
employment in an approved eligible health facility for 2 or 3
years. In return, the NELRP will pay 60 percent of the
participant’s total qualifying loan balance for two years or
85 percent of the participant’s total qualifying loan
balance for three years. For more information, call toll-free
1-866-813-3753 or visit www.bhpr.hrsa.gov/nursing/loanrepay.htm.
you have any questions about the terms of your Federal Perkins
Loan, repayment obligations, deferment, forbearance or
cancellation, check with the school that made the loan. Only
that school may grant deferment, forbearance or cancellation,
or make other decisions concerning your loan.
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