What Are Perkins Loans?

A Perkins Loan is another form of financial aid that is awarded to college-bound high school students.  Like all other federal financial aid, you have to fill out the FAFSA form to be eligible to receive this particular loan.

Perkins Loans are only awarded to undergraduate and graduate students who have exceptional financial need.  The Perkins Loans program is campus-based.  This means that the school is actually acting as the “lender” and uses the funds provided from the federal government to “lend out” the money to students.

Are They Better Than Other Loans?

Some would say that the Perkins Loan is the best student loan that’s available.  It’s a subsidized loan, meaning that all the interest is being paid by the federal government while you are enrolled in college.  The loan itself does not have any origination or default fees, the interest rate is 5%, and you have 10 years to re-pay the loan back to the government.

How Much Money Can I Get?

Each school’s financial aid office determines the loan amount.  Undergraduates are limited to receiving $5,500 per year and graduates are limited to $8,000 per year.  Cumulatively, undergraduates are capped at $27,500 and graduates at $60,000.

Also, the Perkins Loan offers better cancellation provisions than that of the Stafford or PLUS loans.

Other Student Loan Options

If you can’t borrow enough funds from federal programs, there are other ways to get the money you’ll need for college.  Some external lenders offer private loans and your parents can borrow parent PLUS loans to help you fund your college education.

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Lauren Anderson is a certified school counselor who's passionate about helping students all over the world successfully transition from high school to college! After spending 6 years as a business professional, she obtained her Master’s degree in School Counseling and now spends her spare time helping students.

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