Federal Perkins Loans and FFEL/DL Stafford Loans: A Brief Comparison Page: 4 of 19
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Federal Perkins Loans and FFEL/DL
Stafford Loans: A Brief Comparison
Currently, several types of federal student aid (FSA) education loans may be
made available to undergraduate, graduate, and professional students in attendance
at participating institutions of higher education (IHEs) through programs authorized
under the Higher Education Act of 1965 (HEA), as amended by P.L. 105-244.
Federal Perkins Loans are low-interest, fixed-rate loans made available to students
with financial need.1 Students are not charged fees for borrowing Perkins Loans and
no interest accrues while students are enrolled in school at least half-time, nor during
grace or deferment periods. Subsidized Stafford Loans are low-interest, variable-
rate loans made available to students on the basis of their financial need. The federal
government subsidizes the loans by paying the interest that accrues on the loans
while students are in school, and during grace and deferment periods. Unsubsidized
Stafford Loans are low-interest, variable-rate loans made available to students
regardless of their financial need. The federal government does not pay the interest
that accrues on these loans. Students may be charged fees of up to 4% for borrowing
Stafford Loans. Both Subsidized Stafford Loans and Unsubsidized Stafford Loans
may be awarded under either of two competing federal loan programs: the Federal
Family Education Loan (FFEL) program, and the William D. Ford Direct Loan (DL)
The HEA is expected to be considered for reauthorization during the 109th
Congress.3 As bills that would reauthorize HEA programs are introduced and
considered, the Congress may debate reauthorizing (and potentially amending the
terms and conditions of) Perkins Loans and Stafford Loans. Also, in its FY2006
budget request, the Administration proposed terminating the Perkins Loan program,
in large part because the Office of Management and Budget (OMB) has found
Perkins Loans to be duplicative of the Subsidized Stafford Loans available under the
For additional information on Perkins Loans, see CRS Report RL31618, Campus-Based
Student Financial Aid Programs Under the Higher Education Act, by David P. Smole.
2 In this report for purposes of simplicity, where commonalities exist, Subsidized Stafford
Loans and Unsubsidized Stafford Loans are jointly referred to simply as Stafford Loans.
However, significant differences between Subsidized and Unsubsidized Stafford Loans are
noted as appropriate. For further information on Subsidized and Unsubsidized Stafford
Loans, see CRS Report RL30655, Federal Student Loans: Terms and Conditions for
Borrowers, by Adam Stoll. (Hereafter cited as CRS Report RL30655.)
3 For further information on reauthorization of the HEA, see CRS Issue Brief IB 10097, The
Higher Education Act: Reauthorization Status and Issues, by Adam Stoll.
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Federal Perkins Loans and FFEL/DL Stafford Loans: A Brief Comparison, report, June 3, 2005; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc821291/m1/4/: accessed October 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.