The Federal Perkins Loan Program provided low-interest loans to students with exceptional financial need until it ended in 2017. Although no new Perkins Loans have been issued since then, many borrowers still hold outstanding loans that can qualify for cancellation if they meet specific public service requirements.
What Is a Federal Perkins Loan?
A Federal Perkins Loan was a campus-based loan funded jointly by the federal government and the participating institution. Unlike Direct Loans, Perkins Loans were managed primarily by schools or a designated servicer, meaning the cancellation process often involves directly working with your school.
Understanding Perkins Loan Cancellation
Perkins Loan Cancellation, sometimes called loan discharge or forgiveness, reduces your loan balance incrementally based on your qualifying public service. Eligible borrowers receive a percentage of their loan canceled annually while employed full-time in qualifying roles.
Qualifying for Perkins Loan Cancellation
Eligibility is tightly linked to your job type and employer. The Department of Education specifies public service jobs that qualify, generally focusing on roles critical to public welfare. Common qualifying fields include:
- Teaching: Full-time teaching in elementary or secondary public or nonprofit schools, including special education, low-income schools, and early childhood education programs.
- Law Enforcement: Full-time roles such as police officer, correctional officer, or detective with public or nonprofit agencies.
- Public Service: Employment in federal, state, or local government agencies, 501(c)(3) nonprofit organizations, or the military.
- Child and Family Services: Roles in foster care, adoption assistance, or Head Start programs.
- Public Health: Nurses, doctors, or health professionals serving in underserved areas.
- Library Services: Work at public or nonprofit libraries.
- Early Intervention: Providing services to disabled children in early intervention programs.
- Firefighting: Full-time firefighting for public or nonprofit employers.
Your employment must generally be full-time and your service must be certified by your employer.
Cancellation Amounts and Tiers
Cancellation rates vary but commonly follow this schedule by year:
| Years of Service | Annual Percentage Canceled | Cumulative Total Canceled |
|---|---|---|
| 1st year | 15% | 15% |
| 2nd year | 15% | 30% |
| 3rd year | 15% | 45% |
| 4th year | 15% | 60% |
| 5th year | 10% | 70% |
Individual loan terms and federal guidelines may adjust these percentages. Usually, you receive a portion of forgiveness each year rather than waiting until all years are completed.
How to Apply for Cancellation
- Identify your loan servicer—often your school or their agent.
- Confirm that your employment qualifies with your servicer and consult Department of Education guidelines.
- Obtain and complete the official cancellation application from your servicer.
- Collect documentation such as employer certification and proof of full-time employment.
- Submit your completed application and documentation on time to your servicer.
- Upon approval, your servicer will adjust your loan balance accordingly.
If your Perkins Loan has been sold or transferred, coordinate with the current holder.
Important Distinctions
Perkins Loan Cancellation differs from Public Service Loan Forgiveness (PSLF) which applies to Direct Loans. If your Perkins Loan was consolidated into a Direct Consolidation Loan, it ceases to be eligible for cancellation but may qualify for PSLF instead.
Real-World Examples
- Teacher Sarah worked in a low-income rural school for five years. She qualified for 70% loan cancellation after submitting her application with proof of employment.
- Officer Mark served four years as a full-time police officer and received substantial loan forgiveness through the program.
Tips for Borrowers
- Start applying as soon as you qualify to benefit from yearly cancellations.
- Keep detailed employment and pay records.
- Communicate with your employer and loan servicer regularly.
Common Questions
- What if my school closed? You may qualify for special discharge; contact your loan servicer or the Department of Education.
- Does part-time work count? Cancellation generally requires full-time employment or its equivalent.
- What about salary limits? There are no income restrictions for eligibility.
For more details, visit the official Federal Student Aid website. This resource provides comprehensive guidance and the latest updates on Perkins Loan policies and federal student aid options.