When Do Students Have to Begin Paying Back the Perkins Loan?

Paying for college often requires loans, making it crucial to understand repayment terms to avoid financial stress after graduation. The Perkins Loan, a federal program that ended in 2017 but still affects many borrowers, has specific rules on when repayment begins.

Grace Period Duration

Perkins Loan borrowers have a six-month grace period before payments start. After graduating, leaving school, or dropping below half-time enrollment, they are not required to make payments immediately. Unlike some federal loans, interest does not accrue during this time.

This period allows borrowers to secure employment and plan their budgets. Since Perkins Loans were issued by schools rather than the Department of Education, repayment is managed directly by the institution or its designated loan servicer. Borrowers should confirm repayment details with their school to avoid missed deadlines.

Events That End the Grace Period

Certain situations can cause the grace period to end early. One common trigger is re-enrolling in school on a less than half-time basis. If a borrower returns without meeting the minimum course load for deferment, repayment begins immediately.

Loan consolidation also eliminates the grace period. If a borrower consolidates a Perkins Loan with other federal student loans into a Direct Consolidation Loan, payments start right away, even if the original six-month period had not expired. While consolidation simplifies repayment, it removes the temporary payment pause Perkins Loans provide.

Defaulting on a federal loan can also impact the grace period. Borrowers who previously defaulted on any federal student loan may be required to begin repayment immediately. Schools and loan servicers determine whether immediate repayment is necessary in these cases.

Deferments and Other Adjustments

Borrowers facing financial hardship or specific life circumstances may qualify for deferment, which temporarily pauses payments without accruing interest. Eligibility depends on factors such as unemployment, economic hardship, or enrollment in qualifying programs like graduate fellowships or military service. Since schools administer Perkins Loans, they review deferment requests and determine approval based on provided documentation.

For those in public service, loan cancellation may be an option. Full-time employment in fields such as teaching in low-income schools, law enforcement, or nursing can lead to partial or full loan forgiveness. Unlike deferment, which postpones payments, loan cancellation reduces the total balance owed.

Borrowers facing short-term financial difficulties that do not qualify for deferment may request forbearance. Unlike deferment, interest continues to accrue during forbearance, increasing the total repayment amount. Schools may grant forbearance for reasons such as medical expenses or temporary financial setbacks, helping borrowers avoid default while they regain stability.