Federal Perkins Student Loans

Perkins Student Loan Information:

How much will I have to repay each month?
Your monthly payment amount will depend on the size of your debt and the length of your repayment period. The table at left shows typical monthly payments and total interest charges for three different 5-percent loans over a 10-year period.

Are there any tax credits available for paying back these loans?
Yes, there are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers. This benefit applies to federal and nonfederal loans used to pay for postsecondary education costs. The maximum deduction is $2,500 a year. IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits.

Is it ever possible to postpone repayment of my Federal Perkins Loan?
Yes, under certain conditions, you can receive a “deferment” or “forbearance” on your loan, as long as the loan isn’t in default. During a deferment, you’re allowed to temporarily postpone payments, and no interest accrues (accumulates). Also, the school that made you your loan must automatically defer your Federal Perkins Loan(s) during any periods where you perform a service that qualifies you for loan cancellation. (See below for a description of loan cancellation; see the next page for a list of service cancellations.)

Deferments are not automatic. You must apply for one through your school, generally by using a deferment request form your school can give you. You must file your deferment request on time or you’ll pay a late charge. For more details on deferments, contact your school’s financial aid office.

If you temporarily can’t meet your repayment schedule but aren’t eligible for a deferment, you can receive forbearance for a limited and specific period. During forbearance, your payments are postponed or reduced, or your repayment period might be extended. Interest continues to accrue, however, and you’re responsible for paying it.

Forbearance isn’t automatic either. You may be granted forbearance in intervals of up to 12 months at a time for up to 3 years. You must apply in writing for forbearance to the school that made your loan or to the agency the school employs to service your loan. You’ll have to provide documentation to show why you should be granted forbearance.

You must continue making scheduled payments until you’re notified that deferment or forbearance has been granted. Otherwise, you could become delinquent or go into default.

Is it ever possible to have my Federal Perkins Loan canceled?
Yes. Federal Perkins Loans can be canceled if the borrower dies or becomes totally and permanently disabled, for example. A loan can also qualify for cancellation under certain other conditions, as long as you’re not in default.

If you serve as an enlisted person in certain specialties of the Armed Forces, the U.S. Department of Defense might, as an enlistment incentive, repay a portion of your student loan. Note that this is not a cancellation. For more information, contact your recruiting officer.

Another type of repayment assistance (again, not a cancellation) is available through the U.S. Department of Health and Human Services’ Nursing Education Loan Repayment Program (NELRP). This program will help repay student loans for registered nurses in exchange for their service in eligible facilities located in areas experiencing a shortage of nurses. All NELRP participants must enter into a contract agreeing to provide full-time employment in an approved eligible health facility (EHF) for 2 or 3 years. In return, the NELRP will pay 60 percent of the participant’s total qualifying loan balance for two years or 85 percent of the participant’s total qualifying loan balance for three years.

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