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What a Federal Perkins Loan Was For#
A Federal Perkins Loan was available to undergraduate, graduate, or professional students who showed exceptional financial need. It could go to students enrolled full-time or part-time, as long as their school took part in the Federal Perkins Loan Program.
Interest Rate and Borrowing Limits#
Every Federal Perkins Loan carried the same fixed interest rate, no matter the student’s level of study. Borrowing amounts were capped based on whether the student was an undergraduate or a graduate or professional student.
| Student Type | Interest Rate | Annual Limit | Total Limit |
|---|---|---|---|
| Undergraduate | 5 percent | $5,500 | $27,500 |
| Graduate or Professional | 5 percent | $8,000 | $60,000 |
When Repayment Began#
Repayment of a Federal Perkins Loan started 9 months after the borrower graduated, withdrew, or dropped below half-time enrollment, unless the borrower qualified for a deferment or forbearance.
How Perkins Loan Monthly Payments Are Figured#
Your monthly payment is calculated using the size of your debt and the length of your repayment period. Unlike many other loans, this is the only available repayment method for a Federal Perkins Loan. Using the example of a 10-year repayment period (120 payments) and a 5% loan, www.scholarships.com illustrates these monthly payments:
- Loan amount of $4,000: monthly payment $42.43, total interest charges $1,091.01, total charges $5,091.01
- Loan amount of $5,000: monthly payment $53.03, total interest charges $1,364.03, total charges $6,364.03
- Loan amount of $15,000: monthly payment $159.10, total interest charges $4,091.73, total charges $19,091.73
Forbearance on a Perkins Loan#
General forbearances are available for Perkins Loans, along with federal Direct Loans and Federal Family Education Loan Program loans, and the loan servicer decides whether to grant one. A borrower should keep making payments until told the forbearance was approved, since stopping early can lead to delinquency or default.
Who You Pay Now#
For a Federal Perkins Loan, the borrower’s school was the lender. That means monthly payments go directly to the school or to the school’s lender, not to a bank or a company outside the school.
Tax Benefit for Paying Back Your Loan#
There are tax incentives available for paying back a Federal Perkins Loan. This benefit only applies to federal and non-federal loans used to pay for the costs of post-secondary education, with a maximum of $2,500 in deductions per year. To learn more, view IRS Publication 970, Tax Benefits for Higher Education. You can also call the IRS directly at (800) 829-1040.
How Cambridge Credit Counseling Can Help#
Cambridge Credit Counseling’s student loan counseling covers the federal student loan repayment process, including a Federal Perkins Loan, but it does not cover private student loans. Cambridge Credit Counseling can help with choosing or changing a repayment plan, lowering monthly payments, ending garnishments and tax levies, discussing forbearance or deferment options, checking candidacy for forgiveness or cancellation, and consolidating federal student loans.
What to Do Next#
If you are unsure how to manage your Federal Perkins Loan or other federal student loans, Cambridge Credit Counseling’s student loan counseling can walk through your options with you, from repayment plans to forbearance.
Common questions
What was the interest rate on a Federal Perkins Loan?
The interest rate on a Federal Perkins Loan was a fixed 5 percent for both undergraduate and graduate students.
How much could a student borrow with a Federal Perkins Loan?
Undergraduate students could borrow up to $5,500 a year and $27,500 in total. Graduate and professional students could borrow up to $8,000 a year and $60,000 in total.
When did repayment start on a Federal Perkins Loan?
Repayment began 9 months after the borrower graduated, withdrew, or dropped below half-time enrollment, unless a deferment or forbearance applied.
Who do I pay now for a Federal Perkins Loan?
You pay your school or your school's lender directly, since the school acted as the lender for a Federal Perkins Loan.
Can I get a forbearance on a Federal Perkins Loan?
General forbearances are available for Perkins Loans, and the loan servicer decides whether to grant one. Keep making payments until you are told the forbearance was approved, since stopping early can lead to delinquency or default.
Where this information comes from
- Student Loan Forbearance | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Federal Family Education Loans (FFEL) | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Student Loan Debt Consolidation | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Direct Loans | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Why Seek Student Loan Counseling? | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Federal Perkins Loans | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Health Education Assistance Loan | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Student Loan Glossary | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Stafford Loans | Cambridge Credit cambridge-credit.org Checked 2026-08-04.
- Debt-to-Income Ratio | Cambridge Credit cambridge-credit.org Checked 2026-08-25.
- Student Loan Forgiveness | Cambridge Credit cambridge-credit.org Checked 2026-08-04.