Reviewed program guide

Perkins Loan Cancellation

Federal Perkins Loans can be cancelled a year at a time for qualifying service such as teaching, nursing, law enforcement, early childhood work, and military service. The request usually goes to the school that made the loan, not to a single federal application.

Perkins Loan cancellation works differently from the other federal programs on this site. There is no government-wide application. If your school still holds the loan, you request cancellation from that school, using its own form and its own deadline, and that school makes the decision, a job it cannot hand off to anyone else. Only where the loan was transferred to the U.S. Department of Education does a federal servicer form exist, and there is a separate one for each category of service. Cancellation is earned one completed year at a time, so this is something you file each year rather than once at the end. Older National Direct Student Loans and pre-1972 Defense loans fall under the same rules, with their own limits.

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At a glance

Overview

Perkins Loan cancellation works differently from the other federal programs on this site. There is no government-wide application. If your school still holds the loan, you request cancellation from that school, using its own form and its own deadline, and that school makes the decision, a job it cannot hand off to anyone else. Only where the loan was transferred to the U.S. Department of Education does a federal servicer form exist, and there is a separate one for each category of service. Cancellation is earned one completed year at a time, so this is something you file each year rather than once at the end. Older National Direct Student Loans and pre-1972 Defense loans fall under the same rules, with their own limits.

01

Who it may help

This may fit if you hold a Perkins Loan, an older National Direct Student Loan, or a Defense loan, and you have worked full time in a covered role: teaching in a designated low-income school or a shortage field, nursing or medical technician work, law enforcement or corrections, public defender or prosecutor work, Head Start and other early childhood staffing, firefighting, librarian or speech-language pathology work at a qualifying agency, Tribal college faculty work, military service in a hostile-fire area, or Peace Corps and AmeriCorps VISTA volunteer service. The definitions are narrower than the category names suggest; law enforcement, for instance, generally means a sworn officer or a job whose core duties are unique to the criminal justice system. Screening can organize preliminary facts and records, but screening cannot determine qualification or select a final path.

02

How it works

The first step is finding out who holds the loan, because that decides everything else. For a school-held loan you ask that school's financial aid or business office for its cancellation form, then submit it with whatever proof the school requires, often an authorized official's signature and the employer's seal or stamp plus a certified description of your job duties. For a loan assigned to the Department of Education, you use the service-category request form published by its Perkins servicer and mail it in. Either way, you need certification of full-time service covering each complete year you claim, and each year is requested separately as you finish it. Administrative support can help organize forms, records, and communications; it does not replace the decision-maker's review.

03

Documents and next steps

Start by identifying the holder, which is either your school's financial aid or business office or the Department of Education's Perkins servicer if the loan was assigned. Then gather your promissory note or loan statements, employment verification for each complete year you are claiming, a description of your duties that your employer will certify, and for teaching claims, evidence that the school or educational service agency was designated low-income for the year in question. If your school has closed, the Federal Student Aid Information Center can point you to whoever holds the loan now. Keep a copy of every year you file, because the cancellation percentages build on each other year by year. The next step is to compare the records with the cited official source and any current instructions issued by the responsible agency, court, creditor, or other decision-maker.

Read this carefully

Important considerations

Get advice before you consolidate. Rolling a Perkins Loan into a Direct Consolidation Loan is the only route to Public Service Loan Forgiveness for that debt, and doing it permanently ends Perkins cancellation on that loan. Nothing already repaid comes back: the rules bar refunding payments made during a period you could have had cancelled, and bar cancellation for service performed before the loan was made. For someone already in qualifying service the trade can be severe, because the value of what you give up varies by category. In several categories the schedule reaches the whole loan after five qualifying years; volunteer service stops at 70 percent; early childhood work cancels at a flat annual rate that takes roughly seven years; and some older military service and Defense-loan teaching stop at half the loan. Attorney judgment is separate from administrative help and is required for individualized legal strategy or advice.

Common questions

Frequently asked questions

These answers provide general information. Your facts and records determine what may apply.

Should I consolidate my Perkins Loan so it counts toward Public Service Loan Forgiveness?

Get advice before you do, because it is a one-way door. Consolidating a Perkins Loan into a Direct Consolidation Loan is the only route to public service forgiveness for that debt, and the consolidation application itself states that you will no longer be eligible for Perkins cancellation based on your years of service. There is no undo, and no refund of what you already repaid during years you could have had cancelled. Whether the trade makes sense depends on figures personal to you: which cancellation category you are in and what it caps at, how many qualifying years you have already earned, how many more you expect to complete, your balance, and how close you are to ten years of public service. For someone already deep into qualifying Perkins service, consolidating can be the worse result. Treat it as a decision to review with an attorney, not a step to take on your own.

How much of the loan is cancelled each year?

For most service categories the schedule is 15 percent of the original principal, plus the interest that accrued that year, for each of the first two complete years; 20 percent for each of the next two; and 30 percent for the fifth, reaching the whole loan after five qualifying years. The schedule is not universal, though. Head Start and other early childhood service cancels at a flat annual rate, so full cancellation takes roughly seven years. Peace Corps and AmeriCorps VISTA service stops at 70 percent. Military service that ended before mid-August 2008, and ordinary teaching on an older Defense loan, stop at half the loan. Because credit is earned one completed year at a time, you file after each year rather than waiting until the end, and service performed before the loan was made never counts.

My school closed. Who do I apply to now?

Start with the Federal Student Aid Information Center, which can tell you who currently holds the loan. Perkins cancellation is normally handled by the institution that made the loan, using that school's own form and its own deadline, so identifying the holder is the first real step. When a school closes or transfers its portfolio, the loan is generally assigned to the U.S. Department of Education, and its Perkins servicer publishes a separate deferment and cancellation request form for each service category. The paperwork and the proof of employment differ between those two routes, so what you file cannot be answered until the holder is confirmed. A closed school may also raise a separate discharge question, which is a different program with different rules.

Official sources

Important disclosure

This page provides general information, not a qualification or legal determination. Screening and services cannot guarantee approval, forgiveness, discharge, settlement, timing, or any particular result. The responsible agency, court, creditor, or other decision-maker applies the controlling requirements.

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