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Covid-19 Stimulus Package: Perkins Loans

What is a Perkins Loan?

A Perkins loan is money given by your school. It is considered a Federal student loan because the money was given to the school by the US Education Department (USED). The school lends the money, owns the loan, may hire a servicer to collect when the loan is in good standing and may hire a debt collector if the loan defaults. The school can also sue defaulted borrowers. Schools that have too many defaulted Perkins could lose the program, at which point, all Perkins loans are turned over to USED.

Stimulus Help?

Unfortunately, the stimulus package does not offer any protections for Perkins loans. That is for most Perkins loans. If your Perkins is one of the handful that have been turned over to USED, you are protected by the stimulus package. Interest is reduced to 0% and no payments are due for the next 6 months. If it’s in default, all collection activity stops. But again, there is only a small percentage of Perkins loans held by USED. Contact your school to verify if they still have it.


If you cannot afford your Perkins loan payment, or if it’s in default, you have options.

  • If in good standing, contact your school or servicer to request a forbearance
  • Consolidation – for good standing OR defaulted loans. This pays off the loan and creates a Direct Loan, which gets many benefits from the stimulus package. Also, Direct Loans are eligible for Income Driven Repayments – payments based on your income (or lack thereof). Perkins loans on their own are not eligible.

If you have a Perkins loan and need help planning how to best manage it, schedule an appointment.