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The Federal Perkins Loan Program ended: What this means for you

How this need-based program worked, plus alternatives to consider.

Updated

The Perkins Loan Program was one of the best deals you could get on federal loans. While it stopped issuing new loans back in 2017, its repayment, forgiveness and discharge programs still run as usual. If you’re a new borrower who was hoping to take advantage of this now-defunct program, you might want to consider the federal Direct Loan Program instead.

What was the Federal Perkins Loan Program?

The Federal Perkins Loan Program offered needs-based student loans to both undergraduate and graduate students. Unlike other federal student loans, your school was the lender rather than the federal government.

It stood out thanks to its especially low interest rates and longer grace period than other federal loan programs. And Perkins Loan holders also qualified for special forgiveness programs that required a shorter service commitment than Public Service Loan Forgiveness.

How much could I borrow?

Type of studentAnnual limitLifetime limit
Undergraduate$5,500$27,500
Graduate$8,000$60,000

How much you could borrow under the Federal Perkins Loan Program was determined by your school’s financial aid office, rather than the government. The average loan amount was around $2,000, according to US News & World Report.

How much did it cost?

  • Interest rate: 5%
  • Fees: None
  • Loan term: Up to 10 years

The main cost of a Perkins Loan was interest, which was fixed at 5% without accumulating while you were in school or during your nine-month grace period. Unlike other federal loans, there were also no loan fees. However, the longest loan term was 10 years — significantly shorter than other repayment plans available to students.

Here’s what you might have expected to pay on a standard 10-year repayment plan according to those rates and terms:

Loan amountMonthly repaymentTotal cost
$2,000 (average Perkins Loan)$21.21$545.57
$27,500 (undergrad limit)$291.68$7,501.62
$60,000 (graduate limit)$636.39$16,367.17

Who was eligible?

You needed to meet the following criteria to qualify for a Perkins Loan:

  • Exceptional financial need
  • Undergraduate, graduate or professional student
  • Enrolled at least half-time at a school participating in the Perkins Loan Program

Why did the Federal Perkins Loan Program end?

Schools lost their authority to disburse Federal Perkins Loans on September 30, 2017 when Congress chose not to renew the program. The Federal Perkins Loan Program had been originally set to expire in 2014, but received a one-year extension to 2015 and another two-year extension to 2017.

What does this mean for current Perkins Loan holders?

The only change this spells for current Perkins Loan holders is that they can’t take out a new loan through the program. Schools, servicers and the federal government continue to handle repayments as they had before.

Are Perkins Loans eligible for forgiveness?

Yes. Perkins Loans are eligible for total or partial forgiveness based on professional or volunteer work. Eligible lines of work include:

  • Teacher
  • Firefighter
  • Public defender
  • Law enforcement officer
  • Nurse
  • Medical technician
  • Military service member
  • Librarian
  • Speech pathologist
  • AmeriCorps volunteer
  • VISTA volunteer
  • Peace Corps volunteer
  • Early intervention (disability) services provider
  • Early childhood education provider
  • Child or family services agency employee
  • Tribal college or university faculty member

    You can learn more about how these programs work and if you qualify by checking out our guide to student loan forgiveness programs.

    Take a deeper dive into Federal Perkins Loan forgiveness

    Can Perkins Loans be discharged?

    Yes. Perkins Loans can be discharged under several circumstances, including:

    • Bankruptcy
    • Death
    • School closure
    • Total and permanent disability
    • Military service-connected disability

    Spouses of 9/11 victims are also eligible for discharge. Read our guide to learn more about how student loan discharge works for Perkins Loans.

    Alternatives to Federal Perkins Loans

    While the Federal Perkins Loan Program might no longer be accepting new applications, you can still apply for one of the following types of student aid:

    Compare private student loans

    Data indicated here is updated regularly
    Name Product Min. Credit Score Max. Loan Amount APR
    Ascent private student loans
    540
    $200,000
    2.71% to 12.99%
    EDvestinU Private Student Loans
    675
    $200,000
    4.07% to 9%
    Straightforward student loans for undergraduate and graduate students.
    LendKey Private Student Loans
    Varies by lender
    4.99% to 11.06%
    This connection service partners with Sallie Mae and WSFS Bank to offer competitive rates.
     Advantage Education Loan Refinance Loan
    670
    Starting at 3.74%
    Refinance to a more flexible repayment plan with this nonprofit lender.
    Alliant Credit Union Traditional Student Loan
    680
    $60,000
    Starting at 4.56%
    All-purpose personal loans from @pl_product_min_loan_amount@ to @pl_product_max_loan_amount@ with rates that stop at @pl_product_var_rate@.
    ChangEd student loan payment app
    Securely connect all of your student loans and bank accounts to one place for a painless repayment experience.
    Chicago student loans
    None
    Cost of attendance, up to $50,000
    7.53% to 8.85%
    No cosigner needed for this fixed-rate financing option.
    Citizens Bank Private Student Loans
    700
    $295,000
    1.25% to 10.57%
    loading

    Compare up to 4 providers

    Bottom line

    Perkins Loans were one of the most competitive federal student loan options out there. Though the program ended back in 2017, its repayment and forgiveness options remain unaffected.

    If you need a new student loan, you might want to consider applying through the federal Direct Loan Program instead. Or check out other alternatives with our guide to student loans.

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