Federal Perkins Loans

Federal Perkins Loans are low-interest, long-term loans made through the university to help needy undergraduate and graduate students pay post secondary educational costs. The university and the federal government contribute moneys to the Federal Perkins account usually on an annual basis. When the borrowers repay the loan the money goes directly into the Perkins Loan Fund. The moneys are then redistributed to current students as new Perkins Loans.

Interest Rate

The annual interest rate charged on the unpaid balance of the Federal Perkins Loan is 5%. Before July 1, 1981, the rate was 3%; between July 1, 1981, and September 30, 1981, the interest rate was 4%. The interest rate is stated in the borrower’s promissory note.

Grace Period

“Grace Period” is the period of time before the borrower must begin or resume repaying a loan. The grace period is a period of time (generally six or nine months) that begins immediately after the borrower ceases to be enrolled as at least a half-time student.

Loan Repayment

Repayment of the Perkins Loan begins when the grace period ends. Eligibility for a grace period depends on the type of loan that you received; consult your promissory note for the specifics of your loan.  At the time a borrower drops below half-time enrollment or leaves school, the University of Florida must conduct Exit Counseling, during which pertinent information and a repayment schedule are provided to the borrower. The repayment schedule contains the number of payments, interest rate, date of the first payment, and frequency of payments. Loan payments are due on the first day of each month. Monthly payment amount depends on the amount borrowed. The repayment period may not exceed 10 years.

Loan Rehabilitation

Effective July 1, 2000, the University of Florida established a loan rehabilitation program for defaulted Federal Perkins Loan borrowers. Borrowers may only utilize the program one time. A loan is considered in default when a payment is late. A defaulted loan will be considered rehabilitated after the borrower makes 9 consecutive on-time monthly payments, as determined by the University of Florida.

The benefits of successful loan rehabilitation include:

  • Request is sent to credit bureau to remove default from credit history
  • Loan is returned to regular repayment status
  • Borrower regains balance of benefits and privileges of promissory note as applied prior to default
  • Collection costs are capped at 24%
  • Borrower re-establishes Title IV student financial assistance eligibility

How to apply:

  • Borrowers must request loan rehabilitation
  • Call or send written request
  • A Loan Rehabilitation Agreement must be negotiated, approved and executed before the loan can be rehabilitated

A defaulted loan may be rehabilitated one time only!