Perkins loans were created for students with extreme financial need and, although they’re no longer available as of September 2017, many borrowers are looking for ways to have them forgiven or discharged. Perkins loan cancellation or discharge exists in a few ways, including Public Service forgiveness. Read on to find out more about Perkins Loan cancellation, including how to apply.
Perkins Loan Cancellation Options
Perkins Loan Cancellation For Teachers
If you were a full-time teacher in a public or nonprofit elementary or secondary school system working as a:
- Teacher in a school serving low-income families
- Special education teacher for infants, toddlers, children or youth with disabilities
- Teacher in math, science, foreign languages, bilingual education or other fields of expertise determined to be in a shortage for qualified teachers in that state
You may be eligible for Perkins Loan Cancellation. Your eligibility is based on what duties were described in the job description rather than in the job title. You must be directly employed by the school system and there’s no provision for canceling Federal Perkins Loans for teaching in postsecondary schools.
Perkins Loan Deferment
While teaching in a school that qualifies you for cancellation, you also qualify for a deferment. Contact your Perkins Loan servicer directly to find out how you can apply for deferment.
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Perkins Loan Cancellation and Discharge Charts
In the chart below, you’ll find the cancellation rate per completed academic year of full-time teaching, which includes the interest that accrued during each year of service:
- 15% of the original principal loan amount for each of the first and second years;
- 20% of the original principal loan amount for each of the third and fourth years; and
- 30% of the original principal loan amount for the fifth year.
|Cancellation Conditions||Amount Canceled|
|Teacher cancellation||Up to 100% for 5 years of service|
|Full-time nurse or medical technician cancellation||Up to 100% for 5 years of service|
|Full-time firefighter cancellation*||Up to 100% for 5 years of service|
|Full-time qualified professional provider of early intervention services for the disabled cancellation||Up to 100% for 5 years of service|
|Full-time faculty member at a tribal college or university cancellation*||Up to 100% for 5 years of service|
|Full-time speech pathologist with master’s degree working in a Title I-eligible elementary or secondary school cancellation*||Up to 100% for 5 years of service|
|Librarian with a master’s degree working in a Title I-eligible elementary or secondary school or in a public library serving Title I-eligible schools cancellation*||Up to 100% for 5 years of service|
|Full-time law enforcement or corrections officer cancellation||Up to 100% for 5 years of service|
|Full-time attorney employed in a federal public or community defender organization cancellation*||Up to 100% for 5 years of service|
|Full-time employee of a public or nonprofit child- or family-services agency providing services to high-risk children and their families from low-income communities cancellation||Up to 100% for 5 years of service|
|Full-time staff member in the education component of a Head Start program cancellation||Up to 100% for 7 years (at a rate of 15% per year for the first 6 years and 10 percent for the seventh year) of service|
|Full-time staff member in the education component of a prekindergarten or child care program that is licensed or regulated by a state cancellation*||Up to 100% for 7 years (at a rate of 15% per year for the first 6 years and 10% for the seventh year) of service|
|Military service in the U.S. armed forces in a hostile fire or imminent danger pay area cancellation||
Up to 50% for 4 years (at a rate of 12.5% per year) of eligible service for borrowers whose active duty service ended before Aug. 14, 2008
Up to 100% for 5 years of eligible service for borrowers whose active duty service includes or began on or after Aug. 14, 2008
|AmeriCorps VISTA or Peace Corps volunteer cancellation||Up to 70% for 4 years (at a rate of 15% for the first and second years and 20% for the third and fourth years) of service|
*For service that includes Aug. 14, 2008, or began on or after that date.
**As of October 7, 1998, all Perkins Loan borrowers are eligible for all cancellation benefits regardless or when the loan was made or the terms that were in the promissory note. This benefit is not retroactive to services performed before that date.
Who Qualifies as a Teacher?
A teacher provides elementary or secondary school students with direct services related to classroom teaching, including a school librarian or a guidance counselor. You don’t need to have a certification or a teaching license to receive cancellation benefits. You do, however, need to be considered a full-time professional for the purposes of salary, tenure, retirement benefits, etc. to qualify. If you work as an administrator, researcher, or other role that doesn’t directly provide educational services to students, then you don’t qualify.
How Many Years Do I Need to Teach to Qualify?
Each academic year that you teach earns you a portion of your loan cancellation. The “academic year or its equivalent” is defined either as a complete school year or as two half-years that are from different school years. The two half-years must be complete and consecutive and generally fall within a 12-month period in order to qualify.
You can also qualify if you were teaching part-time in two or more schools or if you have an official certify that you taught full-time for a full academic year.
Teaching at a Private School
Teaching at a private school doesn’t automatically mean you don’t qualify for Perkins Loan cancellation. If the private school has its nonprofit status established with the Internal Revenue Service and the school is providing elementary and secondary education according to state law, then you can have your loan canceled.
Teaching at a Preschool or Pre-K Program
If you teach at a preschool or pre-kindergarten program that is part of an elementary education program for the state, then you can qualify for Perkins loan cancellation. A low-income-school-directory designation that includes the pre-k or kindergarten program doesn’t not qualify as state determination of eligibility.
Teaching at Low-Income Schools
Schools are eligible as determined by the state education agency who will qualify the school as a “low-income school” or a Title 1 school. This is defined as a school that’s in a school district that qualified for federal Title I funds in the year that you’re seeking cancellation for your Federal Perkins loan. More than 30% of the school’s enrolled students must be in the Title I program.
You can search the U.S. Department of Education’s list of low-income schools at their online database. Do a search for the years that you were a teacher. You can direct questions about how schools were determined by addressing them to the state education agency contact. All schools operated by the Bureau of Indian Education or operated on Indian reservations by tribal groups who are working with BIE qualify as schools that serve low-incomes students.
If your low-income school is not listed as such in later years, you may still qualify to have portions of your loan canceled for teaching during those years. The institution that has your Perkins Loan may allow you to enact retroactive cancellation if you can prove that you qualified for cancellation during an earlier year. The school may not refund payments made during this retroactive period, though.
Teaching Special Education
An official needs to certify that you are a full-time special ed teacher on the deferment/cancellation form or in an official letter from the school. The list of services below qualifies you as a teacher only if you’re licensed, certified or registered by the state education agency in that area.
The services are speech and language pathology and audiology, physical therapy, occupational therapy, psychological and counseling services, and recreational therapy.
Teaching in a Designated Shortage Area
You can also qualify for cancellation if you teach in an area where there’s a shortage of teachers in your subject. The state education agency determines this each year and you need to check with your local school system to find if your subject matter area is designated as such. If you teach science, mathematics, foreign language, or bilingual education, then you qualify no matter what. The majority of your classes must be taught in the field of expertise.
Nationwide Listing of Teacher Shortage Areas
You can download the list of teacher shortage areas from this PDF: Teacher Shortage Areas Nationwide Listing.
How Much Can Be Cancelled for Teaching Service?
If you’re eligible for cancellation under any of the categories listed above, up to 100% of the loan may be canceled for teaching service in the following increments and including the interest accrued during that year:
- 15% canceled per year for the first and second years of service
- 20% canceled for the third and fourth years
- 30% canceled for the fifth year
Other Jobs or Volunteer Work That Qualify for Perkins Loan Cancellation
If you work in any of the following jobs, you may also qualify to cancel all or part of your Parking Loan:
- Police officer
- Librarian with a master’s degree at a Title I school
- Nurse of medical technician
- Provider of disability services
- Public defender
- Early childhood education provider
- Employee at a child or family services agency
- Military service
- Speech pathologist with a master’s degree at a Title I school
- American VISTA or Peace Corps volunteer
How to Get a Perkins Loan Forgiven
You need to go through your school to apply for Perkins Loan forgiveness because the loan was distributed to you by your college. Call your school’s financial aid office directly to ask for a Perkins loan cancellation application.
What Happens If You’re Approved for Perkins Loan Cancellation
Your loans are usually forgiven in increasing percentages each year that you work in public service. This means that you’ll receive 15% during the first two years that you work and then 20% in the third and fourth years. By the fifth year, the remaining balance is canceled. This includes all accrued loan interest during your years of service.
Perkins Loan Discharge Options
Something different from cancellation is discharging, which can happen when you go through the following situations:
- School closure
- Service-connected disability for veterans
- Spouse of a victim of 9/11
- Total and permanent disability
How Do I Apply for Perkins Loan Discharge?
The application needs to be made to the school that gave you the loan or to their Perkins Loan servicer. They will send you the forms and instructions to follow for your discharge.
Perkins Loan Discharge Chart
Receiving a loan discharge means you no longer need to repay your loan.
|Discharge Conditions||Amount Discharged|
|Discharge for bankruptcy — cancellation is possible only if the bankruptcy court rules that repayment would cause undue hardship||100%|
|Discharge for closed school before the student could complete program of study*||100%|
|Discharge for death||100%|
|Discharge for total and permanent disability||100%|
*Applies to loans received on or after January 1, 1986
I’m Not Eligible for Perkins Loan Cancellation or Discharge. Can I Consolidate My Loans to Become Eligible for Public Service Loan Forgiveness?
Yes. Only direct loans are eligible for Public Service Loan Forgiveness, so this option is a smart choice if you don’t qualify for Perkins Loan cancellation or discharge, but have several federal loans that you want to consolidate and then try to use to enroll in Public Service Loan Forgiveness. Check out our complete guide to student loan forgiveness for more details.
Student loan forgiveness is worth exploring, because you may find yourself able to forgive a lot of the loans you’ve been paying for months or years. Don’t face a seemingly impossible amount of debt without any way out when there are ways you can get some debt relief.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.