Can I Receive a Perkins Loan & Subsidized Loans?

Subsidized and Perkins loans cost students less in the long-run.
i Creatas/Creatas/Getty Images

Financial aid packages and award letters can be more confusing than the first semester of Psych 101. There's the endless set of questions on the Free Application for Student Aid, your expected family contribution calculation, and the anticipation of waiting for your school to spell out what type of money you're going to get. Perkins and Stafford subsidized loans are given based on financial need. It is possible to receive both types of loans, provided your school participates in the Perkins program and you have significant need.

What is a Subsidized Loan?

To be awarded a subsidized loan, your Free Application for Student Aid -- commonly called FAFSA -- must show that your expected family contribution is less than the cost of attending your school. For example, if it costs $10,000 to attend school for a year and your expected family contribution is $2,000, your need is $8,000. The government limits subsidized loan amounts per year. It depends on whether you're an undergrad or graduate student, and if someone can claim you as a dependent. Interest charges are paid for you while you're in school and during grace periods. As of the 2012-13 school year, subsidized loans carried an interest rate of 6.8 percent .

What is a Perkins Loan?

A Perkins loan comes from a pool of federal financial aid funds that the school lends out. Check with your school's financial aid office, since not all colleges participate in the program. If your FAFSA reveals extreme financial hardship or need, you may receive one of these loans. Those who apply for financial aid early have a greater chance. Instead of paying back the government, you repay your loan to the school. As of 2012, the annual limits were $5,500 for undergrads and $8,000 for graduate students. The government pays the interest while you're in school and during grace periods.


To receive either a subsidized or Perkins loan, you must fill out a FASFA each year. You must also meet the standard qualifications for federal student aid. Some of those qualifications include a valid Social Security number, U.S. citizenship or eligible non-citizenship, and satisfactory academic progress. You also can't be in default on any past student loans or have a conviction for illegal drugs on your record. You must also be working towards a degree or professional certificate at an eligible school.

Financial Need

Scholarships, private grants, and Pell grants will reduce your financial need. The government usually awards Pell grants to those who have the smallest expected family contributions and the highest need. If you still have significant need after a Perkins loan and any grants and scholarships, you will be offered a subsidized loan. Your subsidized loan award will not exceed the federal limits, including the aggregate limit. The aggregate limit is the cumulative amount that one person is allowed to borrow.

the nest