📅 2026 Update: Changes in Perkins Loan Programs

Since the original article was published, there have been significant updates to federal student loan programs, particularly with the Perkins Loan. These changes are primarily due to the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The new rules will affect loan limits, repayment options, and eligibility starting July 1, 2026.

The original article continues further down the page, offering foundational information about Perkins Loans. Here’s a closer look at the most pertinent changes.

📜 New Loan Limits

The OBBBA introduced new limits for Parent PLUS Loans. The annual limit is now $20,000 per dependent student. Additionally, there is a total aggregate limit of $65,000 for each dependent student.

This change is important for parents looking to finance their children's education.

⏳ Adjusted Loan Eligibility

Under the new rules, there are adjustments for students enrolled less than full-time. These students may have reduced loan eligibility. This proration affects how much financial aid a student can receive, impacting their ability to cover educational expenses.

📉 Current Interest Rates

Interest rates for loans disbursed after July 1, 2026, are now set at 6.52% for both undergraduate subsidized and unsubsidized loans. Graduate and professional students will face an interest rate of 8.07% for their unsubsidized loans. These rates mark a shift from previous rates and are crucial for borrowers to understand.

💳 Loan Origination Fees

For loans disbursed before October 1, 2026, a 1.057% origination fee will be deducted from each disbursement. This fee can affect the total amount students and parents receive, leading to adjustments in financial planning.

📌 Key Points Summary

  • Parent PLUS Loans: New limits of $20,000 annually and $65,000 total per dependent student.
  • Loan Proration: Reduced eligibility for part-time students.
  • Interest Rates: 6.52% for undergraduates, 8.07% for graduate loans.
  • Origination Fee: 1.057% for loans disbursed before October 1, 2026.

💡 Tips for Navigating Student Loans

Review the details of your specific situation with an attorney.

📋 Understand the FAFSA Process

To be considered for federal student loans, complete the Free Application for Federal Student Aid (FAFSA). This application is crucial for determining eligibility for Direct Subsidized and Unsubsidized Loans.

⏰ Keep Track of Deadlines

FAFSA submission deadlines vary by state and institution. Always check with your school's financial aid office to ensure you don’t miss important dates.

📉 Know Your Loan Limits

Be aware of the annual and aggregate loan limits based on your dependency status. The limits differ for undergraduates and graduates, and understanding these can help you plan better.

💡 Plan for Repayment

Loan repayment begins six months after graduation or when you drop below half-time enrollment. It's important to budget for these payments ahead of time.

🔍 Research Loan Types

Different loans have varying interest rates and repayment options. Understanding the differences between subsidized and unsubsidized loans can help you make informed choices.

🏆 Services Ranked by User Reviews (2026)

This section highlights services related to student loans and personal finance. These services were ranked based on Trustpilot data collected in October 2026. Ratings reflect user experiences, but remember that scores can change over time.

Unhappy customers may post more reviews, affecting the overall impression.

🥇 1. SoFi

SoFi has been rated 4.5. It is known for student loan refinancing, personal loans, mortgages, and investing. While many users appreciate its services, some have noted occasional delays in customer support response times, which can be frustrating when you need assistance.

🥈 2. Avant

Avant holds a 4.5 rating. It is recognized for providing personal loans and credit cards aimed at middle-income consumers. However, some customers have reported high interest rates, which could impact long-term borrowing costs.

🥉 3. Heights Finance Corporation

Heights Finance Corporation also has a 4.5 rating. It specializes in small, direct-to-consumer loans and boasts over 100 branches across the Midwest. Some users have reported high fees, which can affect the overall affordability of their loans.

4️⃣ Prosper

Prosper averages 4.5. It is known for peer-to-peer lending and operates a personal loans marketplace. Some customers have noted issues with loan approval times, which can delay access to necessary funds.

🆓 Free Government Resources

The Federal Student Aid Information Center (FSAIC) offers free information on federal student aid programs. It can be a valuable resource for understanding the complexities of student loans and navigating your options. State financial aid agencies also provide assistance tailored to local programs.

🔎 What to Compare When Choosing Services

  • 📅 Loan limits and terms.
  • 💰 Interest rates for different loan types.
  • ⚖️ Fees associated with loans.
  • 📞 Customer support availability and responsiveness.

❓ Frequently Asked Questions

❔ What are the eligibility requirements for Parent PLUS Loans?

Parent PLUS Loans are available to parents of dependent undergraduate students. The loans help cover education costs beyond what students may receive through other federal aid.

❓ When does loan repayment start?

Loan repayment begins six months after graduation or when a borrower drops below half-time enrollment. It's important to prepare financially for this period.

❓ What are the differences between subsidized and unsubsidized loans?

Subsidized loans are available only to students with financial need, and the government pays interest while the student is in school. Unsubsidized loans are available regardless of need, and the borrower is responsible for all interest from the time of disbursement.

❔ How can I find my state's financial aid agency?

You can find your state's financial aid agency by visiting the Federal Student Aid website. Each state has specific agencies that provide assistance and information regarding state-specific financial aid programs.

❓ What happens if I enroll part-time?

If you are enrolled less than full-time, your loan eligibility may be reduced. This is important to consider when planning your education and financing options.

❓ How do I apply for federal student loans?

To apply for federal student loans, complete the Free Application for Federal Student Aid (FAFSA). This is the first step in determining your eligibility for loans and other financial aid.

⚖️ Recent Cases Related to Student Loans

Recent court rulings have dealt with various issues surrounding student loans, including eligibility and repayment rules. These cases provide insights into how laws are applied in real situations.

You can browse more rulings on the news page to stay updated on the latest developments.

End of October 2026 Update







What is a Perkins Loan?

A Perkins loan is a lower interest, needs based loan for college education offered by the federal government.  There are a number of reasons why the Perkins loan is an attractive option for financing a college education, not the least of which is deferred payment until after graduation, a low and fixed interest rate and eligibility for federal loan cancellation and consolidation.

Perkins Loan

What are the terms of a Perkins loan?

The Perkins loan has a fixed interest rate of 5% and has a repayment grace period of nine months after graduation or falling below half-time student status.  In the meanwhile, interest does not accrue on the loan until the loan begins to be repaid by the borrower.  The current limits for undergraduate students are $5,500 per year, up to $27,500 maximum.  Graduate students may borrow up to $8,000 per year, up to a limit of $60,000 that includes undergraduate Perkins loans.  The limitations and amounts are subject to the actual needs of the student and other aid received by the student.  You will need to repay this loan within 10 years, depending on the amount owed.  

How is a Perkins loan disbursed?

This loan is disbursed through the student’s school.  The school receives a certain amount of funds for Perkins loans through the US Department of Education.  The fund is then replenished through payments made by others that have Perkins loans in addition to occasional payments by the federal government for loan cancellations.  The school determines how the loans are disbursed, screens students for eligibility and will reflect the loans when billing the student or pay the student via check.  

How do I apply for a Perkins loan?

You must be able to demonstrate financial need as Perkins loans are limited and will only be given to those students that qualify.  You may need to consider other loan arrangements if you do not qualify for this needs-based loan.  To be considered for eligibility on a Perkins loan, one must submit a Free Application for Federal Student Aid (FAFSA) as early as possible.  As Perkins loans are limited, there is no guarantee that those that are eligible will receive a loan as these funds are limited.  You should check with your school’s financial aid office to determine if your school is one of the 1,700 institutions that received federal Perkins loan funding.  You will need to sign a promissory note ensuring that you will repay the loan according to the terms of the agreement.

What are the benefits of a Perkins loan to other student loans?

The Perkins loan interest rate is comparatively lower than the interest rates for other student loans.  Student loans have generally high interest rates due the money being borrowed in a short period of time for a specific purpose, when compared to a long term home or auto loan.  Interest does not accrue on the student loan with the student is still in school and many other loans would contain this provision, putting pressure on the student to graduate quickly and being repayment.  

You will not be able to discharge any student loan, especially those made by private lenders, but you may deferred payments on a Perkins loan if you demonstrate sufficient hardship.

What happens if I need to defer my Perkins loan?

As Perkins loans are disbursed by schools, you should contact your school immediately to request a deferral.  Failure to make payments on the loan will result in penalties.

Can my Perkins loan be cancelled?

The federal government will forgive some student loan debt under certain conditions.  Those with a Perkins loan that teach full time in low income schools, teach subjects that there are a shortage of teachers (mathematics, science, foreign languages, or bilingual education) or volunteer for the Peace Corps may have their loans cancelled by the following schedule:

• 15 percent canceled per year for the first and second years of service,

• 20 percent canceled for the third and fourth years, and

• 30 percent canceled for the fifth year.

Up to 100% of the Perkins loan, including interest can be cancelled through this program.

Can I consolidate my Perkins loan?

You may, but be aware that you will lose the previously state cancellation benefits if you choose loan consolidation.

Consolidation is not necessarily beneficial unless the student has other subsidized loans with higher interest rates.  Federal Student Loan Consolidation takes the weighted average of the loan rates and then extends the term, based on the preference of the debtor.  This term can be anywhere from 10 – 30 years.  The average rates are rounded up to the nearest 1/8 of a percentage and capped at 8.25%.

This grants the student financial flexibility in repayment, even if the amount repaid will be higher due to the longer term.  In many cases though, the lower interest rate ends up saving the student money.  

There are a number of pitfalls in federal student loan consolidation, such as picking a 30 year repayment, which will cost the student dearly in interest payments.  Additionally, the fixed interest rate at 8.25% is much higher than the Perkins loan 5%, so consolidation should only occur if the student also has Stafford, PLUS or other loans that need repayment.

How does a Perkins loan affect my credit worthiness?

Education loans are considered “good debt” as it represents an investment into ones earning potential.  The student’s credit score will not be impacted as long as this debt is repaid by the terms agreed upon with the school.

All federal subsidized loans lack an early repayment penalty, allowing the student to repay extra on the principal with every payment to reduce the amount of interest that will be accrued on the principal.  If you can afford early repayment, it is in your best interest to do so.