Federal Perkins loans are low interest student loans awarded by colleges on the basis of need. College financial aid offices determine whether you qualify for a Perkins loan and decide the amount of the loan. This is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the federal government.

(The Perkins Loan is the best student loan available. It is a subsidized loan, with the interest being paid by the federal government during the in-school and nine-month grace periods. There are no guarantee or origination fees, and the interest rate is 5%. There is a ten-year repayment period.

The amount of Perkins Loan you receive is determined by your school's financial aid office. The program limits are $4,000 each year for undergraduate students and $6,000 each year for graduate students, with cumulative limits of $20,000 for undergraduate loans and $40,000 for undergraduate and graduate loans combined.

Institutions participating in the Expanded Lending Option (ELO) may offer higher loan limits for the Perkins Loan. To participate in the ELO, a school must have a default rate no higher than 15%. The annual loan limits are increased by $1,000 each and the cumulative limits increased by $5,000 and $10,000, respectively.