What You Should Know About Perkins Loan Cancellation

The Federal Perkins Loan Program was phased out in September of 2017. While students can no longer take advantage of this resource, graduates are still making payments that may be eligible for cancellation. 

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Eligibility Requirements

There is the potential to cancel up to 100% of this loan. To do so, there are specific criteria that should be met to qualify. The criteria include: 

  • Served full-time as a teacher in a public or nonprofit elementary or secondary school system as a teacher for students of low-income families. 
  • Taught math, science, foreign languages, bilingual education, or a field of expertise identified as having a shortage of teachers in accordance with state guidelines for a public or nonprofit elementary or secondary school system. 
  • If you were a full-time special education teacher for a public or nonprofit elementary or secondary school system that taught infants, toddlers, children, or youth with disabilities.

After meeting the above requirements, an individual should contact their college’s Perkins Loan Servicer to apply for deferment while performing their teaching duties. 

Teaching Requirements

There is no set duration as to how long an individual must teach to receive the cancellation of their loan. Your loan may have a portion canceled for each year completed of teaching. Some of the more common methods of Perkins Loan Forgiveness include: 

  • Teaching part-time in multiple schools if an official can certify that you taught full-time for a full academic year.
  • Teaching at a private school with its nonprofit status established with the Internal Revenue Service. The school must also provide elementary and secondary education services as outlined by the state’s law.
  • Preschool and pre-kindergarten can be eligible if the state considers them part of their elementary education program. 
  • Low-income school teaching is included in the Department of Education’s yearly elementary and secondary school list. The DOE has a database where you can search your years of service to verify if the school was classified as a low-income school during your time of employment.

How much of my loan can be canceled? 

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Those eligible for loan cancellation may be wondering how much of their loan they’ll be responsible for based on the time they spend teaching. According to the FSA, this is how the loan cancelation breakdown works (as of March 2022): 

  • For years 1 & 2 of service: 15% of the loan + interest accrued for that year can be canceled
  • For years 3 & 4 of service: 20% of the loan +  interest accrued for that year can be canceled
  • For year 5: 30% of the loan + interest can be canceled for the year

Terms tend to change from year to year. Please continue to check the FSA.gov site for the most up-to-date information.

Other ways for Perkins Cancellation

Other forms of employment and volunteer service have their own individual calculations of loan cancellation for years of commitment. These alternatives include:

  • Early childhood educational provider
  • An employee of a child or family services agency
  • An employee of a tribal college or university
  • Firefighter
  • Law enforcement officer
  • Librarian of Title I school with a master’s degree
  • Military service
  • A nurse or medical technician
  • Professional provider of disability services
  • Public defender
  • Speech pathologist of Title I school with a master’s degree
  • AmeriCorps VISTA or Peace Corps volunteer service

Under certain circumstances, there are also some discharge options for those that qualify under the following criteria:

  • Bankruptcy
  • Death
  • School closure
  • Service-connected disabilities for Veterans
  • Spouse of a victim of the 9/11 events
  • Total and permanent disability

Conclusion

Even though this resource is no longer available for students, many out there have received and may still be paying off balances and interest for these loans. The information we have provided above outlines the qualifying steps and options to research to determine if your loan is eligible for cancellation.