Perkins Loan Cancellation And Forgiveness: How Does It Work? 

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This Should Perk Up Your Ears: Your Perkins Loan Could Be Canceled If You’re Working In Public Service

The Perkins loan program officially ended on September 30, 2017, but your obligation to pay off that debt still seems endless. Perkins loans were student loans for undergraduate and graduate students who demonstrated financial need; the loans charged a mere 5% interest and offered a full 10 years to pay them off.

If you’re working in public service, however, you might be able to have your Perkins loans canceled. Bear in mind that like many other student loan forgiveness programs, obtaining Perkins loan forgiveness could take time and effort — but it could also take some stress off your bank account. To qualify for a Perkins loan discharge or cancellation, you’ll need at least one year of professional experience, or one academic year for teachers, before applying. Here are some loan forgiveness options based on type of service and the amount of loan that could be forgiven.

Up To 100% Forgiveness

The most comprehensive in terms of job options is for up to 100% loan cancellation for five years of service. The amount forgiven is granted in increments: 15% for the first and second years, 20% for the third and fourth years, and 30% for the fifth year.

Included Professions:

Teacher at a low-income school or a teacher for one of the following subjects: mathematics, science, foreign languages, bilingual, special education, or another subject facing a shortage of qualified teachers in your state

Child or family services agency employee

Faculty member at a tribal college or university

Firefighter

Law enforcement or corrections officer

Librarian with a master’s degree working at a Title I-eligible elementary or secondary school or at a public library that serves Title I-eligible schools

Nurse or medical technician

Professional provider of early intervention disability services

Public defender

Speech pathologist with a master’s degree working at a Title I-eligible elementary or secondary school

For service that began on or after August 14, 2008

If you’re an educator at a pre-K or licensed childcare program (for service that began on or after August 14, 2008) or a Head Start program, it will take seven years to forgive the loan, which is granted in the following increments: 15% for the first six years, 10% for the seventh year.

Up To 70% Forgiveness

AmeriCorps VISTA or Peace Corps volunteers can get up to 70% of their loans forgiven for four years of service. The amount forgiven is granted in increments: 15% for the first and second years, 20% for the third and fourth years.

Forgiveness For Military Service

Those who serve in the U.S. armed forces in a hostile fire or imminent danger pay area qualify for Perkins loan cancellation according to the following classifications:

Up to 50% for four years for borrowers whose active duty service ended before August 14, 2008

Up to 100% for five years for borrowers whose active duty service includes or began on or after August 14, 2008

100% Discharge

Both discharge and forgiveness wipe out your student loan, but discharge is due to circumstances while forgiveness is dependent upon your line of work. The following conditions are eligible for 100% discharge:

The school closed before the borrower could complete the program of study (applies to loans received on or after January 1, 1986)

The borrower is totally and permanently disabled

The borrower died

The borrower filed for bankruptcy, but only if the bankruptcy court rules that repayment would cause undue hardship

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Sandra Murphy

Sandra Murphy

Holds a master's degree in professional writing and has more than 15 years of experience writing for national and international entities.

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