Perkins Loan Forgiveness

There are many forgiveness benefits available to Federal Perkins Loan borrowers who perform certain kinds of public service or are employed in particular occupations, such as:

  • Peace Corps and Action Program (including VISTA) volunteers
  • Teachers in Low-Income Serving Schools, Teachers of Special Education, Teachers of Math, Science, Foreign Language, and Bilingual Education, and Teachers in Other Designated Shortage Areas
  • Early Childhood Education Providers (Head Start or other Pre-kindergarten and Childcare program licensed by a State)
  • Certain Employees of Public or Non-Profit Private Child or Family Service Agencies
  • Faculty Members at a Tribal College or University
  • Librarians and Speech Pathologists with a Master’s Degree
  • Qualified Professional Providers of Early Intervention Services
  • Members of the U.S. Armed Forces serving in areas of hostility
  • Nurses and Medical Technicians
  • Law Enforcement and Correction Officers
  • Federal Public Defenders and Employees of Community Defender Organizations
  • Federal, State, and Local Firefighters

Loan forgiveness in the Perkins Loan program is referred to as loan “cancellation”.

Who is Eligible for Perkins Loan Cancellation?

Borrowers with an outstanding balance on a Perkins loan who meet the eligibility criteria can receive a cancellation regardless of when the loan was made for service provided on or after October 7, 1998 even if the borrower’s promissory note does not list the cancellation type. For newer cancellation types, however, the qualifying service or employment must include August 14, 2008 (the date the cancellation type first became available in the law) or begin on or after that date.

How Much Loan Cancellation Can I Expect to Receive?

Except for a couple of the public service Perkins cancellations, a borrower can expect to receive cancellation of up to a maximum of 100% of the Perkins Loan over a four or five-year period.

How Much of My Loan is Cancelled After Each Year of Qualifying Public Service or Employment?

A percentage of the loan is cancelled after completion of each year of qualifying service. The rate for most cancellation types is 15% of the loan amount (plus any interest that accrues on that amount during the year) for the first and second years of qualifying service, 20% of the loan amount (plus accrued interest) for the third and fourth years of qualifying service, and 30% of the loan amount (plus accrued interest) for the fifth year of qualifying service?

How Do I Apply for a Perkins Loan Cancellation if I Believe I’m Eligible?

There is no standard application form for Perkins Loan Public Service and Employment-Based cancellations. If you believe you are eligible, you should contact the school you attended when you received the Perkins Loan or, if the school directs you, the school’s designated Perkins Loan servicer. Many schools or their Perkins Loan servicers have developed forms that you may use to request and document your eligibility. You will be required to submit a written request for the cancellation and any required documentation of your eligibility in the manner and by the date the school specifies. The school determines your eligibility and there is no appeal process to the Department of Education.

Do I Still Need to Make Payments During My Qualifying Service or Employment?

No. If you request the cancellation and document your eligibility to the satisfaction of the school, the school is required to grant you a pre-cancellation deferment of repayment until you can document completion of each year of service and the applicable loan percentage is cancelled. Be aware that the school is prohibited from refunding you any payments you may have made while performing service you want recognized for cancellation. So, to receive the maximum amount of cancellation to which you may be entitled, it’s important that you contact the school immediately if you believe you are eligible.

What is the maximum cancellation and cancellation rates for the various cancellation types?

Peace Corps and Action Program (including Vista) Volunteers

  • Up to 70%; 15% for first and second 12-month period of service and 20% for third and fourth 12-month period of service

Teachers in Low-Income Serving Schools; Teachers of Special Education; Teachers of Math, Science, Foreign Languages, Bilingual Education, and other designated shortage areas

  • Up to 100% for loans made prior to July 23, 1992 for service performed on or after October 7, 1998; for each completed academic year or its equivalent of full-time teaching – 15% of original loan principal (OLP) plus accrued interest (AI) for first and second years, 20% of OLP plus AI for third and fourth years, and 30% of OLP plus AI for fifth year
  • Up to 100% for teaching service that includes August 14, 2008, or begins on or after that date – for each completed academic year or its equivalent of full-time teaching – 15% of OLP plus AI for first and second years; 20% of OLP plus AI for third and fourth years, and 30% of OLP plus AI for the fifth year

Early Childhood Education Providers (Full-time staff of Head Start and other Pre-Kindergarten and Childcare Programs licensed by the State)

  • Up to 100% for Head Start staff; for each completed academic year or its equivalent – 15% of OLB plus AI

Employees of Public or Non-Profit Private Child or Family Service Agencies Working Exclusively and Directly with High Risk Children from Low-Income Communities and their families

  • Up to 100% of outstanding loan balance (OLB); for each completed 12-consecutive month period of full-time work – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% of OLB plus AI for the fifth year

Faculty at Tribal Colleges and Universities

  • Up to 100% for each completed 12-consecutive month period of full-time work that includes August 14, 2008 or begins on or after that date – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% for the fifth year

Librarians and Speech Pathologists with a Master’s Degree working in low-income schools

  • Up to 100% for each completed 12-consecutive month period of full-time work that includes August 14, 2008 or begins on or after that date – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% for the fifth year

Qualified Professional Providers of Early Intervention Services in a public or non-profit private program under public supervision as authorized under the Individuals with Disabilities Act (IDEA)

  • Up to 100% for each completed 12-consecutive month period of full-time work performed on or after October 7, 1998 – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% for the fifth year

Members of the U.S. Armed Forces serving in an area of hostile fire that qualifies for imminent danger pay as identified by the U.S. Department of Defense

  • Up to 50% for borrowers on active duty service that ended before August 14, 2008 –  12½% for each complete year of qualifying service, and
  • Up to 100% for borrowers on active duty service that includes August 14, 2008 or begins on or after that date – 15% of OLB plus AI for the first and second complete years of qualifying service, 20% of OLB PLUS AI for the third and fourth complete years, and 30% of OLB plus AI for the fifth complete year

Nurses (Registered Nurses, Licensed Practical Nurses, and others licensed by the State to provide nursing services)

  • Up to 100% for each completed 12-consecutive month period of full-time work – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth year, and 30% of OLB plus AI for the fifth year

Medical Technicians (allied health professionals who assist physicians and other health care specialists and who are certified, registered or licensed by the State)

  • Up to 100% for each completed 12-consecutive month period of full-time work – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% of OLB plus AI for the fifth year

Sworn Law Enforcement and Corrections Officers serving in a publicly-funded Federal, State, or Local agency or facility

  • Up to 100% for each completed 12-consecutive month period of full-time work – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% OLB plus AI for the fifth year

Federal Public Defenders and Employees of Community Defender Organizations

  • Up to 100% for each completed 12-consecutive month period of full-time work that includes August 14, 2008 or begins on or after that date – 15% of OLB plus AI for the first and second years, 20% of OLB plus AI for the third and fourth years, and 30% of OLB plus AI for the fifth year

 Firefighters in Federal, State, or local fire departments and districts

  • Up to 100% for each completed 12-consecutive month period of full-time work that includes August 14, 2008 or begins on or after that date- 15% of OLB plus AI for the first and second years; 20% for the third and fourth years, and 30% for the fifth year

Are Federal Perkins Loan cancellation amounts considered income for purposes of Federal income tax?

No. The law specifies that Perkins public service and employment-based cancellation amounts are not considered income for tax purposes.