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The Federal Perkins Loan Program, formerly the National Defense Student Loan Program, was first authorized by the National Education Act of 1958. The program offers low interest rates to students of higher education institutions through campus-based revolving funds. New funds are added to the revolving fund by federal capital contributions and matching contributions by institutions.
The program fosters access to post-secondary education for low- income students by providing low interest loans with favorable terms during a period of declining grant availability.
Perkins Loan borrowers are predominantly from lower income families. These students are often the first in their family to attend college. The following graph depicts the percentages of Perkins Loan borrowers: Families with Dependent Students (65% of borrowers), Independent Students (21% of borrowers), and Graduate Students (14% of borrowers).
Families with Dependent Students comprise the largest percentage of Perkins borrowers. During Award Year 2005-2006, 72% percent of these families had an income under $20,000.
Twenty-one percent of Perkins Loan borrowers are independent students. Fifty-four percent of these students have incomes below $12,000 with an additional 20% falling in the $12,000-$19,999 income range. Thus, 74% of independent students have incomes less than $20,000.