A Federal Perkins Loan, or Perkins Loan, is a need-basedstudent loan part of the Federal Direct Student Loan Program, offered by the U.S. Department of Education to assist Americancollege students in funding their post-secondary education. The program is named after Carl D. Perkins, a former member of the U.S. House of Representatives from Kentucky. Perkins Loans carry a fixed interest rate of 5% for the duration of the ten-year repayment period. The Perkins Loan Program has a nine-month grace period, so that borrowers begin repayment in the tenth month upon graduating, falling below half-time status, or withdrawing from their college or university. Since the Perkins Loan is subsidized by the government, interest does not begin to accrue until the borrower begins to repay the loan. As of the 2009-2010 academic year, the loan limits for undergraduates are $5,500 per year with a lifetime maximum loan of $27,500. For graduate students, the limit is $8,000 per year with a lifetime limit of $60,000. Perkins Loans are eligible for Federal Loan Cancellation for individuals choosing to work in a number of different public service occupations including early childhood education, elementary and secondary school teaching, speech therapy, nursing, law enforcement, librarian, public defense attorney, fire fighting and certain active duty military postings. Depending on the field of employment, further restrictions on the setting of employment may apply. For example, forgiveness for teachers may be restricted to designated low-income schools or specific teacher shortage areas such as math, science, and bilingual education and forgiveness for nurses requires employment at a non-profit medical facility. A percentage of the loan is cancelled for each year spent teaching full-time. This cancellation also applies to Peace Corps Volunteers. Cancellation typically occurs on a graduating scale: 15% for year 1, 15% for year 2, 20% for year 3, 20% for year 4, 30% for year 5. These percentages are based on the original debt amount. Thus after 3 years of service, one would have 50% of their original debt cancelled. On September 30, 2017, the Federal Perkins Loan program failed to renew in Congress, thus effectively ending the loan program.
