Federal Perkins Loans
Perkins loans (also known as "National Defense Student Loans" and "National Direct Student Loans") are great options for prospective college students with exceptional financial need. Perkins loans are funded with money set aside by the federal government, and each loan is federally subsidized. This means that the federal government pays the interest charges for the loan as long as the borrower is enrolled in school.
As part of receiving Perkins loans, borrowers are also given a nine month grace period after they withdraw or graduate from school. The government will continue to make interest payments on their loans. After that gracie period borrowers are required to begin making interest and loan payments themselves.
Perkins loans are arguably the most attractive student loans available to borrowers. They are directed specifically to students with high levels of financial need, and because of that, they offer the most borrower-friendly rates and conditions.
Interest Rates
Federal Perkins loans carry a low, fixed interest rate of 5.0% and include an agreeable 10-year repayment plan.
Loan Limits
Borrowers are restricted in the amounts that they receive through federal Perkins loans. These amounts are limited to the following sums:
For undergraduate students:
Student's First Year: $4,000 available through a subsidized loan
Student's Second Year: $4,000 available through a subsidized loan
Student's Third Year: $4,000 available through a subsidized loan
Student's Fourth Year: $4,000 available through a subsidized loan
Student's Fifth Year: $4,000 available through a subsidized loan
Total Undergraduate Amount Allowed: $20,000 available through subsidized loans
For graduate students:
Graduate School: $6,000 available per year through subsidized loans
Total Graduate Amount Allowed: $40,000 in combined subsidized loans (including all undergraduate Perkins loans)
