The Federal Perkins Loan Program is a government initiative that is geared towards providing federal education loans to students that demonstrate a very high financial need. Most of the loans that are provided as a result of this program are more commonly referred to as Perkins Loans, and they are much more difficult to get when compared to Federal Stafford Loans.
To get a Perkins Loan you need to have an “exceptional” financial need, which is calculated via this equation:
- Financial Need = Cost of Attendance (CoA) — Expected Family Contribution (EFC)
While it is difficult to gauge exactly the kind of EFC you are going to have to demonstrate in order to qualify for a Perkins Loan, most students who get this award have fairly low EFC values that are sometimes close to, or at zero. See the article that explains how your EFC is calculated on this site if you want to evaluate your expected family contribution for the current school year.
The Perkins Loan is a federal student loan, and it therefore obeys the standard eligibility criteria for other forms of federal student aid. This means that you must also satisfy the appropriate federal student aid eligibility requirements in accordance with exemplifying the proper financial need in order to become eligible for this student loan.
Here are some quick facts about the Perkins Loan:
- Has a low and fixed interest rate that is set at five percent
- Roughly 1,800 postsecondary institutions participate in the Perkins Loan Program
- Eligibility is based on need
- The FAFSA must be completed in order to apply
- Designed both for undergraduate and graduate students
Loan Amounts
Most students who receive a Perkins Loan don’t get the full award amount, which is set at 5,500 dollars per year for undergraduate students, and 8,000 dollars per year for graduate students.
Rather, most students receive about half of the full award amount, and the final determination is typically made by your college’s financial aid department. You can receive a maximum of 27,500 dollars in Perkins Loan aid for the life of your career as an undergraduate student.
Eligibility and How to Apply
Applying for a Perkins Loan is simple and easy, as you don’t have to complete any other applications besides the FAFSA. Because your eligibility is so heavily reliant on your financial need and EFC, it is important to pay special attention to your Student Aid Report once you have successfully submitted your FAFSA. Your SAR can give you insight into your ability to qualify for certain types of federal student aid, and it should also explicitly reveal your EFC.
Having a lower EFC value is of course preferable when you are trying to qualify for need-based aid like the Perkins Loan, and if your EFC is at, or close to zero, you probably have a very good chance at getting a Perkins Loan if your school participates in the program.
School participation is perhaps the biggest negative to this student loan, as only about 1,800 schools participate from across the country, thus making your ability to demonstrate a very high financial need a moot point if your school isn’t one of these participating schools.
That being said, your school will make the final determination of the actual award amount you are able to receive for a particular school year, and they should report this figure back to you via the award letter that will be sent to you a few months after you complete your FAFSA.
Ultimately the Perkins Loan is a great student loan to have due to its low costs, and preferable repayment terms, The problem is that it is very difficult to get, with less than half of the schools that receive federal student aid currently participating in the program. Regardless, it is still a good piece of financial aid to have on your radar, and to apply you really don’t have to do anything more than complete the FAFSA by the appropriate deadlines.
