A Perkins Loan is a now‑discontinued, low‑interest federal student loan that was offered to college students with exceptional financial need, where the government covered the interest while you were in school and during a post‑school grace period.

What Is a Perkins Loan? (Quick Scoop)

A Perkins Loan (formally the Federal Perkins Loan) was a special kind of need‑based federal student loan for undergraduates and graduates in the U.S.

It’s no longer being issued, but many borrowers are still repaying these loans today.

Key Facts at a Glance

  • Type of loan: Federal, need‑based, and subsidized (government paid interest while you were in school and during the grace period).
  • Interest rate: Fixed 5% during repayment.
  • Who it was for: Students with exceptional financial need, undergraduate and graduate.
  • Who lent the money: Your school was the actual lender; you repaid the school or its servicer.
  • Status now: Program ended; last Perkins Loans were disbursed around mid‑2018, but existing borrowers keep original terms.
  • Grace period: 9 months after leaving school before regular repayment started, with no interest accruing in that period.

How a Perkins Loan Worked

  • You applied for federal aid (via FAFSA), and if your financial need was very high and your school participated, you could be offered a Perkins Loan in your aid package.
  • The school received federal funds, added some of its own, and then lent the money directly to you.
  • Funds were either paid to you or applied to your tuition and fees by the school.

Repayment details:

  • Interest rate: 5% fixed for up to about 10 years of repayment.
  • Grace period: 9 months after graduating, leaving school, or dropping below half‑time enrollment; no payments required and interest did not accrue.
  • Standard term: Typically a 10‑year repayment schedule, often in equal monthly payments.

Loan Amounts and Limits

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Borrower type Annual limit (typical) Lifetime cap
Undergraduate students Up to about $5,500 per year in later years of the program.Up to about $27,500 total.
Graduate/professional students Up to about $8,000 per year in later years.Up to about $60,000 total (including any undergrad Perkins Loans).
Schools also had caps based on how much Perkins funding they received; if funds ran out, not every eligible student got a Perkins Loan.

Program Has Ended (But Loans Live On)

  • Congress ended the Federal Perkins Loan Program in 2017; the last loans were disbursed by June 30, 2018.
  • No new Perkins Loans are being given now, but if you already have one, you continue under the same terms you originally signed.
  • As of recent data, there are still billions of dollars in Perkins Loans outstanding and over a million borrowers repaying them.

If you’re unsure whether you have a Perkins Loan, you can check your federal loan records through the U.S. Department of Education’s Federal Student Aid website.

Why Perkins Loans Mattered

Perkins Loans were considered borrower‑friendly because:
  • The fixed 5% interest rate was often lower than other federal or private loans.
  • They were subsidized, so no interest accrued while you were in school at least half‑time or during the nine‑month grace period.
  • The program specifically targeted students with exceptional financial need, giving extra support where it was most needed.

Many borrowers also had access to deferment, forbearance, and, in some cases, partial or full cancellation for qualifying public‑service jobs (for example, certain teaching, law enforcement, or service programs), depending on the era and loan terms.

Mini Example

Imagine a student from a low‑income household attending a public university in 2015 who qualifies for a Perkins Loan of $3,000.

They attend school full‑time, graduate in four years, then have a nine‑month grace period where they make no payments and interest does not grow; after that, they repay the remaining balance over about 10 years at 5% interest.

Is a Perkins Loan Still an Option Today?

  • You cannot get a new Perkins Loan now; the program is closed to new borrowers.
  • If you already have one, your main tasks are:
    1. Confirm who services your loan (often your school or its contracted servicer).
2. Learn about your repayment, deferment, or cancellation options under your specific promissory note.

Current students instead rely on other federal loans (like Direct Subsidized and Unsubsidized Loans) and grants to fill the gap the Perkins Program once covered.

Bottom Line

A Perkins Loan was a special low‑interest, need‑based federal student loan where your school acted as the lender, the government subsidized interest while you were in school and during a generous grace period, and you repaid at a fixed 5% rate over about 10 years.

The program has ended, but if you still have a Perkins Loan, its favorable terms and potential relief options continue to apply under the original agreement.

Information gathered from public forums or data available on the internet and portrayed here.