The Federal Perkins Loan used to be known as National Direct Student Loans (NDSL). This loan is the regarded as the best of the federally subsidized loans, and is given to students who are in high financial need. Currently, the interest rate is at a low 5%.

Perkins loans are made to students and do not require a parent to cosign. The student is required to begin repayment after they graduate, leave college, or qualify for half-time student status. Interest on these loans does not accrue during the time the student attends college, and students are given up to ten years to repay the entire loan amount. Repayment begins nine months after the student graduates or drops below half-time student status.

The money for Perkins loans comes from the government, but is administered by colleges financial aid offices. The maximum annual loan for undergrad students is $4,000 at most schools, and the most a student can borrow is $20,000 total.

Perkins loans can be discharged (canceled) in whole or in part if the student enters employment at certain jobs, which include:

- Full-time teacher in low-income areas
- Full-time special education teacher
- Full-time math or science teacher, or teacher of any other subject with shortage of teachers
- Full-time nurse or medical technician
- Full-time employee of a child or family-service agency in low-income area
- Full-time law enforcement or corrections officer
- Full-time Peace Corps volunteer