Perkins loans are low-interest (5%) loans to help pay for undergraduate, graduate, professional, or vocational postsecondary education. They are awarded to students with the greatest financial need. Federal Pell Grant recipients have highest priority. Perkins loans are administered by the Federal Student Aid Office of the U.S. Department of Education, which allocates funds to about 1,800 participating schools. The schools contribute 25% of the funding and act as the lender.

To receive a Perkins loan from your school, you must file the Free Application for Student Aid (FAFSA) to determine your financial need. The qualification requirements for Perkins loans are:

• At least part-time enrollment in a degree program at an eligible institution
• U.S. citizenship, permanent residency, or eligible non-citizen status
• Satisfactory academic progress
• No unresolved defaults or overpayments owed on Title IV education loans or grants
• Satisfaction of Selective Service requirements.

Approximately 500,000 new Perkins loans are awarded annually. The average loan amount is slightly more than $2000, with a yearly maximum of $4000 for undergraduates and $6000 for graduate students. The overall maximum amounts are $20,000 for undergraduate education and $40,000 for combined undergraduate and graduate education. Financial aid administrators at each institution have substantial flexibility in determining the loan amount.

You must sign a promissory note--a binding legal contract--for your Perkins loan. Depending on the amount owed, you have up to 10 years to repay your educational institution. Students who accept certain military, public, or teaching employment are eligible to have all or part of their loans cancelled. The Department of Education reimburses schools for the cancelled loan principal amounts.

You can learn more about Perkins loans at the U.S. Department of Education’s Federal Perkins Loan Program website at http://www.ed.gov/programs/fpl/index.html.