The Federal Perkins Loan program was a campus-based student loan initiative funded jointly by individual universities and the federal government. Institutions no longer have the authority to issue new Perkins Loans, as the program officially ended on September 30, 2017. However, many students, including those at Stanford, still have outstanding Perkins Loans from previous years.Some key features of Perkins Loans include the fact that borrowers are not required to make payments while enrolled at least half-time in an accredited college or university.

Additionally, there is a nine-month grace period after leaving school before repayment begins, during which no payments are due. During both enrollment and the grace period, no interest accrues on the loan.Once the repayment period begins, the loan accrues interest at a fixed rate of 5%, and the standard repayment term is ten years, typically consisting of 120 monthly installments. Borrowers may also qualify for deferments, such as when enrolling in another degree program, experiencing unemployment, or meeting other conditions defined under Perkins Loan regulations.

Eligibility for Perkins Loans

Eligibility for a Perkins Loan was based primarily on financial need, as determined by the Free Application for Federal Student Aid (FAFSA). Schools used the FAFSA to calculate a student’s Expected Family Contribution (EFC) and determine the amount of aid needed to meet the cost of attendance.

Eligibility for Perkins Loans

Eligibility for a Perkins Loan was based primarily on financial need, as determined by the Free Application for Federal Student Aid (FAFSA). Schools used the FAFSA to calculate a student’s Expected Family Contribution (EFC) and determine the amount of aid needed to meet the cost of attendance.

• Enrollment at least half-time in an eligible program
• Demonstrated exceptional financial need
• U.S. citizenship or eligible non-citizen status
• Maintenance of satisfactory academic progress
• No prior default on federal student loans

It is important to note that funds were limited, and availability depended on each school’s allocation from the federal government. As a result, not every student who qualified for financial need automatically received a Perkins Loan.

Application Process

The application process for a Perkins Loan was closely tied to the FAFSA. Students interested in the loan needed to:

Complete the FAFSA – This determined eligibility and the expected family contribution.

Submit any additional school forms – Colleges often required separate financial aid forms to assess eligibility for Perkins Loans.

Review award notifications – Schools notified students of the loan amount based on financial need and availability.

Sign a promissory note – This agreement detailed the terms of repayment, including interest, grace periods, and deferment options.

Complete the FAFSA – This determined eligibility and the expected family contribution.

Submit any additional school forms – Colleges often required separate financial aid forms to assess eligibility for Perkins Loans.

Review award notifications – Schools notified students of the loan amount based on financial need and availability.

Sign a promissory note – This agreement detailed the terms of repayment, including interest, grace periods, and deferment options.

Benefits of Perkins Loans

Despite the program’s discontinuation, Perkins Loans offered several key advantages for students while it was active:

• Low fixed interest rate of 5%
• No origination fees
• Interest-free while enrolled at least half-time
• Generous grace period before repayment
• Loan forgiveness opportunities for public service careers
• Direct school management, which sometimes allowed for flexible repayment options

Perkins loan repayment

Perkins Loans work differently from most other federal student loans because your college or university acts as the lender. This means that repayment is handled directly through your school or a third-party company appointed by the school, rather than through the standard federal loan servicers used for Direct Loans or PLUS Loans. Typically, repayment on a Perkins Loan begins nine months after you graduate, leave school, or drop below half-time enrollment, providing a short grace period to prepare financially. The standard repayment schedule extends up to 10 years, with monthly payments structured to gradually pay off both principal and interest.

Because your school manages the loan, the servicer for your Perkins Loan may differ from the company handling your other federal loans. If you are unsure whether you have a Perkins Loan, you can check your loan type through the U.S. Department of Education’s Federal Student Aid website. It’s important to know your loan details, including the repayment servicer, monthly payment amount, and any deferment or cancellation options that may be available. Understanding these aspects ensures you can manage your Perkins Loan effectively and take advantage of the unique benefits offered by this program.

Loan forgiveness options for certain professions

One of the key advantages of Perkins Loans was the option for loan cancellation for borrowers who pursued careers in specific public service fields. This feature was intended to encourage graduates to work in professions that benefit communities, such as teaching in low-income schools, law enforcement, firefighting, nursing, and other government or nonprofit roles. Borrowers could qualify to have a portion or all of their loan canceled depending on their profession and years of service.

For instance, teachers in eligible schools or shortage subject areas could have 15% of their loan forgiven for each year of full-time service, potentially reaching 100% forgiveness after five years. Similarly, law enforcement officers and firefighters could earn partial loan cancellation over a set period, typically up to six years. To receive forgiveness, borrowers needed to provide documentation confirming their employment in an eligible position. This benefit made Perkins Loans particularly valuable for students committed to public service.