The campus-based Perkins Loan program is generally is the best student loan available, because there are no origination or default fees and the interest rate is 5%.  The Perkins Loan is awarded to undergraduate and graduate students with exceptional financial need.  The Perkins Loan also offers better cancellation provisions than the Stafford or PLUS loans.
Highlights of the Perkins Loan include:

• Low interest loan available for undergraduate and graduate students.
• Based on exceptional need.
• Loans are made through your school's financial aid office.
• Your school serves as the lender, using a limited pool of government funds.
• Loan is disbursed directly to the student, or applied towards the student's tuition.
• Student can borrow up to $4,000 per school year.
• The specific amount of the award (up to $4,000) will be determined by: when the student applies, the financial need, and the funding level of the school.
• Repayment of the loan commences 9 months after the student graduates, leaves school or the student's course load drops below half-time status.
• The federal government pays the interest on the loan during the time the student is in school, and during the 9-month grace period noted above.
• Student has up to 10 years to repay the loan, which does not include periods of deferment or forbearance.
• Payment amounts will be dependent upon the amount of the loan(s) and the period of time that the loan will be repaid.
• In order to offer the Perkins Loan, a school's student loan default rate can be not higher that 15%.