Who is Eligible?

Undergraduate and graduate students are eligible for Perkins Loans. A school must give priority to students with exceptional financial need as defined by the school using procedures it establishes for that purpose. Before an undergraduate student can receive a loan, the school must determine his or her eligibility or ineligibility for a Federal Pell grant. A student who has earned a bachelor's or first professional degree may receive a Perkins Loan to pursue an additional undergraduate degree provided that he or she meets the eligibility requirements and has not borrowed the maximum amounts. A student engaged in a program of study abroad also may be eligible for a Perkins Loan.

Favorable Loan Terms

Perkins Loans have an interest rate of approximately 5 percent, which begins to accrue 9 months after the borrower ceases to be a student. The loans carry a number of cancellation provisions for teacher shortage areas, law enforcement, public services through VISTA and the Peace Corps, early intervention, and nursing.

Program Success1

In 2005-2006, according to analysts at the Department of Education, 727,600 students borrowed $1,593,516,180 in Perkins loans, with an average amount of $2,190 awarded per student. As of June 30, 2006, the Perkins Loan Program had a cohort default rate of 8.10 percent, which is low when compared to other federal loan programs and is extremely impressive when you consider the borrower population. The success of the program is a result of the central role of the education institution that originates the loan, counsels the borrower through repayment, and selects contractors for servicing and collection. The educational institutions ultimately tailor the program to best fit the borrower's and institution's needs. Perkins is a risk-sharing program with institutions contributing 25% of their students' awards. This "ownership interest" also contributes to the successful management of this vital program.

Since the inception of the Federal Perkins Loan Program in 1958, over $25.7 billion dollars in loans have been made to students through almost 25 million aid awards. The Federal Perkins Loan Program has provided substantial loan assistance to millions of students and families across the country.

Additional Information

For additional information about the Federal Perkins Loan Program contact:

Prepared by the Coalition of Higher Education Assistance Organizations (COHEAO)

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