The Federal Perkins loan cancellation program is a loan assistance program that helps eligible students by canceling up to 100% of their Perkins Loans. The cancellation amount varies based on the length of time the student has been in school and whether they teach or perform research for a low-income school. If you are an undergraduate or graduate student, read this article to learn about eligibility requirements and how to apply for cancellation!
What is Federal Perkins loan cancellation?
The Federal Perkins loans are funded through the government, and schools participating in this program offer low-interest rates on these types of loans. The length of time for repayment varies based on whether you teach or perform research at a low-income school but ranges from five to ten years after graduation (with some more options if you work within certain professions). Depending upon your service requirements, there may even be opportunities available where you would cancel all outstanding debt.
If you have completed an undergraduate or graduate degree, read this article to learn about eligibility requirements and how to apply for cancellation today!
If I have a Perkins loan and I am interested in public service loans
Special benefits may be available to student loan holders who have a public service occupation. The benefits are known as Perkins loan cancellations. After one full year of service, you may cancel a portion of your loan.
However, if you consolidate a Perkins loan into a federal direct consolidation loan, you will no longer be eligible for federal loan forgiveness. Therefore, you should know your options before choosing a consolidation loan.
Public Service Loan Forgiveness (PSLF)
If you work in a public service job, you may be able to have your student loans forgiven after making 120 on-time payments. These can include direct federal loans, or Perkins Loans consolidated into the Direct Loan program. Although if this is the case, they will not be considered eligible for PSLF unless re-consolidated back into a Perkins loan.
There are some caveats to having your debt forgiven: only payments made after October of 2007 count towards forgiveness, and only full years are counted as well, so your monthly minimum must be constantly met.
Keep in mind that consolidating your Perkins loans out of the direct consolidation loan program disqualifies all benefits under PSLF due to non-inclusion with Federal Student Aid programs. Therefore, if you have a Perkins loan, you should know your options before choosing consolidation.
Federal Perkins loan (full or partial) cancellation is available for the following jobs (full time):
Partial cancellation grants all or some of the discharged amount waived for every year you taught full-time in an elementary or secondary school serving students from low-income families in certain instances:
- Teacher at any school or other fields designated as teacher
- Special education teacher
- An employee of a public or nonprofit child- or family services agency providing services to high-risk children and their families from low-income communities
- Medical technician
- Law enforcement or corrections officer
- Active-duty servicemember in the U.S. Armed Forces
- Teacher in a designated elementary or secondary school serving students from low-income families
Special benefits may be available to student loan holders who have a public service occupation. The benefits are known as Perkins loan cancellation. After one full year of service, a particular portion of the loan may be canceled.
If you consolidate a Perkins loan into a federal direct consolidation loan, you will no longer be eligible for federal loan forgiveness. Therefore, you should know your options before choosing a consolidation loan.
Federal direct loans vs. Perkins loans
It is important to note that if you have Federal Direct Loans or a combination of federal direct and Perkins student loans, consolidation will not change your repayment requirements. For example, suppose you consolidated only your Perkins loans into the national direct consolidation loan program. In that case, all benefits under Public Service Loan Forgiveness are no longer available to you as they do not form part of Federal Student Aid programs anymore.
Therefore, students with this debt load must understand their options before choosing a new repayment plan. Depending on how much time has passed since graduating from college/university, one can apply for these funds by speaking with the school’s financial aid office or filling out this form.
For more information about federal Perkins loan cancellation, it is essential to speak with your financial aid officer at the school you are attending or contact a free student loan specialist today!
How do I get forgiveness for my Perkins loan?
If you think you could be eligible for Perkins Loan Cancellation, speak with your financial aid officer about your options and how much time has passed since graduating from college/university. If there were any breaks in enrollment during those years determines eligibility for cancellation. You can apply by speaking with the school’s financial aid office.
Why would I benefit from Perkins’s Loan Forgiveness?
Federal Perkins Loans are low-interest alternative loans to students who do not qualify for federal student aid. Perkins Loans have a fixed rate of five percent, which can be beneficial if you struggle with your current debt repayment plan.
How much time has passed since graduating from college/university determines eligibility for cancellation, and one must speak with the school’s financial aid office or fill out this form to apply! Individuals must understand their options before choosing a new repayment plan.
If I consolidated only my Perkins loan in the national direct consolidation loan program, it would no longer be eligible for federal forgiveness as it does not fall under Federal Student Aid programs anymore due to non-inclusion. You should contact your school’s financial aid officer directly about your Perkins loan repayment assistance program or speak with a free student loan specialist today!
Perkins Loan Cancellation and Discharge
If you work in a public service occupation, you may be eligible for federal Perkins Loan Cancellation and Discharge. This program forgives or cancels your outstanding student loan balance if specific criteria are met. You must have been employed by an organization considered a low-income institution of higher learning at least part-time to qualify for Cancellation under this program. If you teach full-time and perform research at these institutions, then the Public Service Forgiveness Program will also forgive up to 100% of your remaining Federal Perkins Loans!
Who Was Eligible for Perkins Loans?
Before September 30, 2017, undergraduate and graduate students are eligible for the Perkins loan if they demonstrate exceptional financial hardship. As with other federal financial aid forms, students needed to first fill out the Free Application for Federal Student Aid, or FAFSA.
Perkins Loans were capped at $5,500 per year for undergraduates with a cumulative limit of $27,500. Graduate students were allowed to borrow $8,000 per year and a total limit of $60,000, including any undergraduate Perkins loan debt.
Other employment or volunteer service that qualifies for Perkins Loan Cancellation can include any of the following:
-Emergency management or disaster relief service.
-Military service in a hostile fire/imminent danger pay area (for loans received on or after August 14, 2008).
-Public safety officer employed by federal, state, or local government whose official responsibilities are to provide police protection, maintain public order, and respond to emergencies where life is threatened for an indefinite period.
How do I apply?
You can contact the financial aid office at your school to request an application form -which will be available online -or print one here. You should receive a confirmation when they’ve received your application after submitting it within 30 days of filing. If approved, 100% of Perkins Loans are discharged: this means no monthly payments! It may take up to 120 days until all loans are paid in full but know you won’t owe anything even if it takes longer.
It is important to note that if you have Federal Direct Loans or a combination of federal direct and Perkins student loans, consolidation will not change your repayment requirements. If you consolidated only your Perkins loans into the national direct consolidation loan program, you would lose all your benefits under Public Service Loan Forgiveness.
Why Did the Federal Perkins Loan Program Expire?
In a nutshell, the Federal Perkins Loan Program was created in 1958 to provide low-interest loans for students with exceptional financial needs who would otherwise be unable or unwilling to borrow at market interest rates. The program has been very successful and currently provides more than $100 million annually towards college costs for thousands of students across the nation.
Unfortunately, Perkins Loans have been losing money for the government in recent years, and as a result, Congress decided to allow the program to expire back in 2015. The Federal Perkins Loan Program was scheduled to end on September 30 of 2017, per an agreement reached by lawmakers with President Obama’s administration -but that deadline has since passed without any extension from Congress.
The Department of Education is still processing loans submitted before September 30, but all new applications are being declined until further notice.
This means that unless you had already received your loan disbursement before June 30 (the date when new applicants were no longer accepted), then you will not be eligible for Perkins Student Loan Cancellation under this program.
Here are some of the best student loan refinance options available at EdFed.