Perkins Loans: A Great Way to Get an Education

According to the Department of Education’s (DOE) website, Perkins loans are low-interest loans provided jointly by the federal government and your university to help you cover the costs of tuition. Full disclosure: this author relied on Perkins loans to fund his own college education… and he fully advises all students to pursue this fantastic option.

Students that are going to college at least half-time and are making reasonable grades in their pursuit of a degree are eligible (if you’re a high school senior who plans to do these things, you’re also eligible). Go to to fill out your FAFSA… and please do it early!

Congress established a system to evaluate your FAFSA that helps the DOE and your university assess your financial status. They’ll determine how much your family can be expected to pay and cut you a check to make up the difference.

For reference, the DOE expects new loans to average around $2,200 per student, but loans can go as high as $5,500 for undergraduates and $8000 for graduates. [One year’s tuition at UNC-Chapel Hill is roughly $5,600.]

So should you go through all the hassle of filling out a FAFSA? Absolutely – according to the DOE’s website, $1.1B in Perkins loans were awarded to students in 2009. That’s a lot of federal assistance right there, folks.

After graduating from college, you have a nine-month grace period to get your life straight and find a paying job. Debt is bad, but the federal government is your best friend when it comes to loans like this. After subsidizing your loan all through college to make sure you’re not saddled with four years of interest before you even make your first payment, they charge you 5% interest and put you on a ten-year repayment plan. (Credit cards charge around 19% to compare).

There are no fees for taking out the loan and you may deduct up to $2,500 a year off your taxes for student loan interest. For more information, call 1-800-4FED-AID to reach the Federal Student Aid Information Center or head over to and search for Perkins Loan.

Stewart Pelto

Stewart Pelto

Stewart Pelto is a recent graduate from the University of North Carolina at Chapel Hill. He is now the proud recipient of a Master’s degree in French Literature – a degree that honed the same researching and writing skills he uses to write informative articles today. While pursuing this degree, he taught French courses to undergraduate students for two years. What he enjoyed most about the position was the challenge of making difficult concepts readily understandable and accessible to all.

He served as a Senator for the Graduate and Professional Student Federation, fighting to keep tuition costs down for graduate students struggling with their finances and student loans. He also developed his budgeting skills during his time as a Treasurer for the Graduate Romance Association. He enjoyed becoming more active in his local community and working to make a positive effect on his surroundings.

While an undergraduate himself, he spent a year abroad in Europe earning his degree in Spanish and French. While studying in both Sevilla, Spain, and Montpellier, France, he was exposed to the everyday reality of living under different economic and financial systems. Among other interesting travels he has made is a financial pilgrimage to the Spanish stock market in Madrid.

Stewart Pelto brings his rigorous academic education and his international experience to the problem of raising credit awareness and promoting financial responsibility. He hopes that his articles will teach his readers about debt and credit in an easily accessible and readily understandable way.
Stewart Pelto