The Perkins Loan is awarded to undergraduate and graduate students with exceptional financial need. This is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the federal government. The Perkins Loan is the best student loan available. It is a subsidized loan, with the interest being paid by the federal government during the in-school and 9-month grace periods after leaving school. There are no origination or guarantee fees and the interest rate is 5%. There is a 10-year repayment period.

The amount of Perkins Loan you receive will be determined by the financial aid office. The program limits are $3,000 per year for undergraduate students and $5,000 per year for graduate students, with cumulative limits of $15,000 for undergraduate loans and $30,000 for undergraduate and graduate loans combined. 

Institutions participating in the Expanded Lending Option (ELO) may offer higher loan limits for the Perkins Loan. To participate in the ELO, a school must have a default rate no higher than 15%. The annual loan limits are increased by $1,000 each and the cumulative limits increased by $5,000 and $10,000, respectively.

The Perkins Loan also offers better cancellation provisions than the Stafford or PLUS loans. See the section on loan forgiveness for more details.