Perkins School Loans

• Perkins Loan Limits


• Perkins Loan Distribution


• Canceling a Perkins Loan


• Perkins Loan Grace Periods


• Perkins Loan Repayment Table


• Perkins Loan Tax Credits


• Perkins Loan and Active Duty


• Perkins Loan Deferments, Forbearance and Cancellation


• Perkins Discharges and Cancellation Summary Table


• Special Notes

Depending on when you apply, your level of need and the Perkin school loan'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 the interest, there are no additional charges associated with taking out a Perkins school loan. But if you: miss a payment, pay late, or pay less than the required amount, you may incur a late charge fee. Repeated unpaid balance will possibly result in your account being placed into collections. This will have an adverse affect on your credit rating.



Perkins Loan Distribution

Funds for the Perkins school loan are either paid directly to you or placed in your student account. For the most part, at least two payments will be made during the academic year.



Canceling a Perkins Loan

If you choose to cancel a Perkins school loan after being accepted, you must notify your school as soon as you have been notified by your school that your account has been credited. The school is required to send notification no earlier than 30 days before, and no later than 30 days after, they have credited your account. You may cancel all or a portion of the loan by notifying the school within 14 days of your receipt of notification. If you receive the Perkins loan by check, you may refuse the funds by not endorsing, and returning the check.



Perkins Loan Grace Period

The grace period for repaying a Perkins school loan is nine months after you graduate, leave school, or drop below half time* status. If you are on active military duty, the grace period may be longer. If you're attending school less than half time, according to the schools criteria, you should check with the financial aid office for further information on the grace period. At the end of the grace period, you must begin repaying your loan. In some instance, people have been allowed up to 10 years to repay their Perkins loan.

The monthly payment on a Perkins school loan is dependent on the loan amount and the length of the repayment period. Following is an example of typical repayments for a Federal Perkins Loan, including the total interest charges for three different 5% loans over a 10 year period. (Table source: DOE)

There are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to both federal and nonfederal loans used to pay for postsecondary education. The maximum deduction is $2,500 a year. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits.

As a result of 9/11, The U.S. Department of Education (ED) has issued special guidance for those called to active duty. If a borrower's loans are in an "in-school", "in-school deferment" status, or in a grace period when the borrower is called to active duty or reassigned, the loan holder must maintain the loans in that status during the period of active duty service or reassignment. The borrower must also be given additional time to resume enrollment in the next regular enrollment period that is reasonably available. Maintaining the status of the loan and allowing the borrower to resume enrollment shall not exceed a total of three (3) years.

If, while on active duty, a borrower is in repayment, the loan holder must grant a forbearance (temporary suspension of repayment) for the expected period of the borrower's active duty status, beginning on the first day of active duty, but not to exceed one year. Forbearance beyond the one year period will require supporting documentation and a written agreement by the borrower. Additional information on the Perkins loan and active duty should be addressed to the loan holder.

In certain situation, you can receive a "deferment" or "forbearance" on your Perkins school loan (if it is not in default). During a deferment, you are allowed to temporarily suspend payments without accruing interest. You can find a list of acceptable deferments here. In addition, the school that issued the loan must automatically defer your Perkins Loan during any periods when you perform a service that qualifies for such action. In cases where you are having difficulty meeting your repayment schedule, but do not qualify for a deferment, you may request a forbearance for a limited period. During forbearance, your payments may be postponed or reduced, or your repayment period extended. In cases of forbearance, the interest continues to accrue on the loan. Understand that you must apply for the deferment or forbearance through the school or the agency which issued the loan. During the application period, until notified, you must continue to make payments on your loan.

In extreme circumstances, such as death or permanent disability, a Federal Perkins school loan can be canceled (see the table below). The Perkins Loan offers better cancellation provisions than the Stafford or PLUS loans. Under certain other conditions, a Perkins school loan could qualify for a reduction in the loan amount - so long as the loan is not in default. Below are some examples of provisions for reduction. For more information, contact the loan issuer.

• If you serve in certain specialties of the Armed Forces, the U.S. Department of Defense may, as an enlistment incentive, repay a portion of your student loan.




• The U.S. Department of Health and Human Services' Nursing Education Loan Repayment Program (NELRP) will help repay school loans for registered nurses in exchange for their service in disadvantaged areas. All NELRP participants enter into a contract agreement to be employed in an approved eligible health facility (EHF) for 2 or 3 years in return for NELRP paying a percentage of their loan balance. Percentage is based upon the number of years committed. For more information, call NELRP, toll-free, at 1-866-813-3753 or visit their website.

If you have any questions about the terms of your Perkins school loan, repayment obligations, deferment, forbearance, or cancellation, check with the loan issuer or the school's financial aid office.

Additional information on teaching service cancellations and deferments can be found at www.studentaid.ed.gov website using the "Repaying," and "Cancellation and Deferment Options for Teachers" links.

1. As of October 7, 1998, all Perkins Loan borrowers are eligible for all cancellation benefits regardless of when the loan was made or the terms indicated on the promissory note.





2. Beginning July 1, 2002, a borrower who is determined to be totally and permanently disabled will have his or her loan placed in a conditional discharge period for three years from the date the condition became effective. During the conditional period, the no payment will need to be made. At the end of the three year conditional period, if the total-and-permanent disability requirements are met, the borrower's loan repayment obligation is canceled. If the requirements are not met, repayment of the loan will resume. Total and permanent disability is defined as the inability to work and earn money because of an injury or illness that is expected to continue indefinitely or to result in death.

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