What Cancellations are available on a Federal Perkins Student Loan?

Cancellation benefits allow you to cancel a portion of your principal balance for each complete year of service in an eligible shortage area.  These areas include teaching, nursing, medical technology, law enforcement, social services, Peace Corp and the military.  Partial cancellation of your loan is made for each complete year of employment for up to 100% of your loan for most cancellation types.

The cancellation process works in conjunction with the deferment process.  Your employer certifies on a deferment form that you are expected to work for an eligible employer in an eligible capacity for the upcoming year.  Your loan is placed into a deferment while you complete the year of employment service.  During the deferment period no interest accrues and no payments are required.  At the end of the year, your employer certifies that you did complete the year of service on a cancellation form and a partial cancellation is processed on your loan based upon how many years of cancellation service you have performed.

Cancellation Eligibility Criteria

Teaching in Elementary or Secondary Schools servicing Low-Income Students (5 years of service for 100% cancellation)

  • You must be a full-time teacher, directly employed by the school system, in a public or other nonprofit elementary or secondary school that the U.S. Department of Education has designated as a low-income school.  The directory can be found at: http://studentaid.ed.gov/PORTALSWebApp/students/english/cancelperk.jsp?tab=repaying
  • You must teach for a complete academic year or its equivalent
  • A teacher is a person who provides to students, direct classroom teaching, or educational services directly related to clasroom teaching such as a school librarian or guidance counselor
  • A supervisor, administrator, researcher, or curriculum specialist is not a teacher
  • All Bureau of Indian Affairs (BIA) elementary and secondar schools qualify.

Teaching Special Education (5 years of service for 100% cancellation)

  •  You must be employed as a full-time special education teacher of infants and toddlers from birth to age 2, children or youth from ages 3 through 21 with disabilities who require special education and related services because they have disabilities as defined in section 602(a)(1) of the Individuals with Disabilities Education Act.

Teaching in Fields of Expertise (5 years of service for 100% cancellation)

  • You must be employed full-time teaching in mathematics, science, foreign languages, bilingual education or any other field of expertise where the state education agency determines that there is a shortage of qualified teachers
  • The majority of classes taught must be in the area of expertise.

Head Start Pre-School Program (15% of the original loan for each year of service)

  • You must be employed as a full-time staff member in a position that is required to carry out the educational part of the Head Start pre-school program under section 222(a)(I) of the Economic Opportunity Act of 1964-5.
  •  You must complete an academic year or its equivalent.

  •  Your salary cannot exceed the salary of a comparable employee working in the local school district

Nurse or Medical Technician (5 years for 100% cancellation)

  •  You must be employed as a full-time nurse or medical technician who provides health care services.
  • Medical technicians must be allied health professionals working in a field such as therapy, dental hygiene, medical technology, or nutrition, who are certified, registered or licensed by an appropriate state agency
  • An allied health professional is someone who assists, facilitates, or compliments the work of physicians and other specialist in the health care system.
  •  A nurse is a licensed practical nurse, a registered nurse, or other individual who is licensed by an appropriate state agency.

 Law Enforcement (5 years for 100% cancellation)

  • You must be employed in full-time service as a sworn law enforcement officer or corrections officer or a person whose principal responsibilities are unique to the criminal justice system in a local, state or federal law enforcement or correction agency.
  • Eligible agencies are publicly funded units where the principal activities pertain to crime prevention, control, reduction, or the enforcement of the criminal law.
  • The activities include but are not limited to police efforts, activities of the courts having criminal jurisdiction and related agencies, activities of corrections, probation or parole authorities, and problems relating to the prevention, control or reduction of juvenile delinquency or narcotic addition.
  • Employment as a public defender does not qualify for cancellation as well as agencies that are primarily responsible for enforcement of civil, regulatory, or administrative laws are ineligible.

Peace Corps Volunteer or Volunteer under the Domestic Volunteer Service Act (4 years of service for 70% cancellation)

  • You must be a Peace Corp volunteer or volunteer under the Domestic Volunteer Service Act of 1973 (ACTION).
  • You must not, as part of your duties, give religious instruction, conduct worship service, engage in religious proselytizing, or engage in fundraising to support religious activities.

Child or Family Service Agency (5 years for 100% cancellation)

  • You must be a full-time employee in a public or private nonprofit child or family service agency, providing, or supervising the provision of services to only high-risk children and their families who are from low-income communities.
  • High-risk children are individuals under the age of 21 who are low-income or at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in placements outside of their homes, or are involved in the juvenile justice system.
  • Low-income communities are communities in which there is a high concentration of children between the ages of 5 and 17 who are eligible to be counted under Title I of the Elementary and Secondary Education Act of 1964, as amended.
  • Elementary or secondary school systems or hospitals are not eligible employing agencies.

Early Intervention  (5 years for 100% cancellation)

  • You must be employed as a full-time qualified professional provider of early intervention services as defined in section 672(2) of the Individuals with Disabilities Education act, in a public or non-profit program under public supervision.
  • You must provide service to infants and toddlers from birth to age 2, inclusive, who need early intervention services for specified reasons, as defined in section 672(1) of the Individuals with Disabilities Education Act, and who require special education and related services because of their disability.

Military Service (4 years for 50% cancellation)

  • You must be serving a period of full-time active duty in the armed forces (U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard, National Guard, Reserves) in an area of hostility or an area of imminent danger that qualifies for special pay under Section 310 of Title 37 of the U.S. Code.
  • An "area of hostility” does not include special pay for such things as flight pay or service overseas in areas where additional pay is given for dependent's living allowances