Students can borrow up to $3,000 for each year of undergraduate study. The total amount you can borrow as an undergraduate is $15,000. Graduate students can borrow up to $5,000 for each year of graduate or professional study. The total amount you can borrow as a graduate/professional student is $30,000. (This includes any Federal Perkins Loans you borrowed as an undergraduate.)

Recipients of a Perkins Loan sign a promissory note agreeing to repay the loan. Repayment of the loan begins nine months after a student graduates, leaves school, or drops below the half-time attendance level. The loan must be completely paid within 10 years. There are payment plans that allow borrowers to spread their payments over the 10 year period. However, if a student defaults on his loan, the school can require repayment of the entire amount immediately, including all interest, collection, and late-payment charges. The school can also sue the student to collect its money and can ask the federal government for help in collecting it. As we warned above, the school or federal government will also notify credit bureaus of the default, which may affect future credit rating.

Deferments of payments after a student has left school are possible, as long as the loam is not in default. A deferment must be applied for through the school. There are a few special circumstances. All or part of a Perkins Loan can be canceled or postponed, i.e., if the student dies or is permanently disabled, becomes a full-time teacher of handicapped or low-income children, works in a Head Start program, serves as a Peace Corps or VISTA volunteer, or serves as an enlisted person in a specialty in one of the armed forces. More information is available by writing: Perkins Loans, Director, Division of Program & Policy Development, U.S. Dept. of Energy, 400 Maryland Avenue, SW, Washington, DC 20202 or visit the Perkins Loan web site.