Overview and Key Facts
The LSU Perkins Loan was a federally funded, campus-based loan program administered by Louisiana State University and other participating schools to help undergraduate and graduate students with financial need. Though new Perkins loans ended in 2017, existing loans remain in repayment, and key rules about cancellation, consolidation, and eligibility still apply. This guide explains how the program worked, who qualified, repayment responsibilities, cancellation and discharge options, and how Perkins loans compare to other federal aid.
- Type: Federal campus-based loan (Perkins).
- Issuer: School financial aid office (Louisiana State University).
- Eligibility: Undergraduate and graduate students with financial need.
- Guarantor: None; federal program administered directly by the school.
- Discharge options: Teaching, public service, AmeriCorps, military, and disability.
- Default consequences: Wage garnishment, tax refund offsets, loss of eligibility.
What Is an LSU Perkins Loan?
The LSU Perkins Loan was a low-interest, need-based loan program offered by Louisiana State University through the Federal Perkins Loan Program. The program provided funding to undergraduate and graduate students with exceptional financial need. Each school had a fixed amount of Perkins funding, and awards combined student eligibility with availability of funds at LSU. Perkins loans had a fixed interest rate, a six-month grace period, and multiple cancellation and discharge paths for public service, teaching, and other qualifying employment.
Key Program Features
| Attribute | Verified Detail | Source Type |
|---|---|---|
| Program Type | Federal campus-based loan (Perkins) | Federal program documentation |
| Interest Rate (historical) | 5% fixed while enrolled and during grace/deferment | Federal Perkins Loan guidelines |
| Loan Fees | None | U.S. Department of Education guidelines |
| Repayment Start | After graduation, dropping below half-time, or ceasing attendance; 6-month grace period | Program terms |
| Maximum Undergraduate Award | Up to $5,500 per year (subject to availability and need) | Historical program limits |
| Maximum Graduate Award | Up to $8,000 per year (subject to availability and need) | Historical program limits |
| Maximum Aggregate | Up to $27,500 for undergraduates; up to $60,000 for graduates (combined with other Perkins) | Program rules |
| Guarantor | None; administered directly by the school | Federal Perkins structure |
Eligibility Criteria
Eligibility for an LSU Perkins Loan was based on financial need, enrollment status, and citizenship. Students demonstrated need by filing the FAFSA and showing that other aid did not fully cover college costs. The financial aid office at LSU determined final eligibility based on the cost of attendance, expected family contribution, and availability of Perkins funds. Part-time students could qualify for a prorated award, and undergraduates were typically required to maintain at least half-time enrollment.
Basic Eligibility Checklist
- U.S. citizen, national, or eligible noncitizen.
- Valid Social Security Number.
- Registered with the Selective Service System if required.
- Not in default on any federal student aid.
- Demonstrated financial need as determined by the FAFSA and LSU aid office.
- Enrolled at least half-time in an eligible program at LSU or another participating school.
Application and Award Process
Students applied for a Perkins Loan by completing the FAFSA and submitting any additional LSU financial aid forms. The LSU financial aid office reviewed the FAFSA, determined eligibility, and sent an award notification outlining the amount a student could borrow each academic year. Unlike federal Direct Loans, Perkins funds were limited and awarded on a first-come, first-served basis until the school’s allocation was exhausted. Students accepted the loan by signing a Perkins Loan Agreement, which outlined the terms, responsibilities, and cancellation opportunities.
Step-by-Step Application Overview
- Complete and submit the FAFSA before priority deadlines.
- Provide any requested verification and additional documents to LSU Financial Aid.
- Await award notification and review the Perkins offer amount.
- Accept the loan through the school’s process and sign the Perkins Loan Agreement.
- Complete entrance counseling to understand repayment obligations.
Repayment Terms and Options
Repayment on an LSU Perkins Loan typically began after graduation, dropping below half-time enrollment, or ceasing attendance. Borrowers received a six-month grace period before payments started. The standard repayment plan had a term of up to 10 years with fixed payments. Income-driven repayment plans were generally not available for Perkins loans, but borrowers could explore other options through loan consolidation or by negotiating with the servicer. Because Perkins loans were administered by the school, borrower communications and payment processing were handled directly by the LSU financial aid or business office.
Repayment Snapshot
| Attribute | Detail | Source Type |
|---|---|---|
| Grace Period | 9 months after graduation or dropping below half-time | Program terms |
| Repayment Plan | Up to 10 years (standard) | Federal Perkins guidelines |
| Interest Rate | Fixed at 5% while in repayment | Historical program rate |
| Deferment | Available for eligible situations, such as in-school status or economic hardship | Program rules |
| Default Consequences | Wage garnishment (up to 15%), tax refund offsets, loss of deferment options | Federal Perkins consequences |
Cancellation, Discharge, and Forgiveness
LSU Perkins Loan borrowers may qualify for cancellation or discharge through several programs. Teaching in a low-income school or subject area could lead to partial or full forgiveness after a specified number of years. Other paths included public service employment, AmeriCorps service, military service, or total disability. Borrowers should contact LSU’s financial aid office to understand exact service requirements and application procedures for each cancellation program.
Cancellation and Discharge Options
| Option | Typical Requirement | Source Type |
|---|---|---|
| Teacher Loan Forgiveness | 5 consecutive years of teaching in a low-income school or educational service agency | U.S. Department of Education |
| Public Service Loan Forgiveness (PSLF) | 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer | Federal PSLF program |
| Perkins School-Based Cancellation | Varies by school and state; often includes teaching in certain subjects or schools | Perkins program terms |
| Discharge for School Closure | Discharge if the school closes during enrollment or within 120 days after withdrawal | Federal student aid rules |
| Discharge for Permanent Disability | Discharge based on proof of total and permanent disability | Federal student aid rules |
Consolidation and Exit Process
Borrowers with an LSU Perkins Loan could consolidate the loan into a Direct Consolidation Loan through the U.S. Department of Education, which simplifies repayment by combining multiple Perkins and other federal loans into one. Consolidation may make a borrower eligible for additional Income-Driven Repayment plans and Public Service Loan Forgiveness. The exit process at LSU included completing exit counseling, reviewing repayment options, and ensuring the loan servicer had current contact information to avoid default and missed payments.
Default Prevention and Borrower Support
To avoid default, borrowers were encouraged to communicate with the LSU financial aid office if they experienced financial difficulty, enroll in repayment plans when eligible, and watch for notices about their loan status. Resources such as loan counseling, deferment options, and hardship programs could help keep Perkins loans in good standing. Borrowers who received a delinquency notice should respond promptly and make alternate payment arrangements if needed.
Perkins Loan vs Other Federal Student Aid
Compared to Federal Direct Subsidized and Unsubsidized Loans, the Perkins loan offered a lower fixed interest rate and more flexible cancellation options for teachers and public servants. However, program funds were limited and not always available to all eligible students. Direct Loans typically have higher aggregate limits and broader servicer networks, while Perkins loans provided targeted support for students with significant financial need at participating schools like LSU.
Summary and Practical Takeaways
For borrowers who held an LSU Perkins Loan, understanding the terms, repayment timeline, and cancellation opportunities was essential for managing debt effectively. Key actions included completing entrance and exit counseling, tracking payment deadlines, exploring consolidation if eligible, and pursuing cancellation if they worked in teaching or public service. Staying informed about loan status and maintaining contact with LSU’s financial aid office helped prevent default and supported long-term financial stability.