DEFINITION of 'Perkins Loan'
A loan program that provides low-interest student loans to undergraduate and graduate students who demonstrate exceptional financial need. The Perkins Loan is made through the student's school's financial aid office. The school is the lender, and therefore the loan is repaid to the school. The loan is paid either directly to the student (usually by a check) or the loan amount is applied towards school charges and expenses. Repayment on the loan begins nine months after the student graduates, leaves school or drops below half-time status.
BREAKING DOWN 'Perkins Loan'
The Federal Perkins Loan Program has borrowing limits depending on when the student applies, the student's financial need and the school's funding level. Students can borrow up to $5,500 for each year of undergraduate study - up to $27,500 - and $8,000 for each year of graduate or professional study - up to $60,000, including any undergraduate Federal Perkins Loans.