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PERKINS STUDENT LOAN
CANCELLATIONS
Under certain conditions, a borrower may have all or part of his
or her Perkins
loan canceled. Cancellation means that a portion or all of the principal
borrowed plus accrued interest will never have to be repaid by the borrower.
PARTIAL
CANCELLATION
General Information
Partial Cancellations
are granted on an annual basis for one completed 12 month period of full-time work or
service. Cancellations cannot be granted for less than a full 12 months of completed
work or service although the work or service may be performed for more than one employer
or agency. If the work or service is performed for multiple employers or agencies, the
borrower must provide certified documentation from each employer or agency for the period
worked or served.
At the end of the completed 12-month period of full-time work or
service, which is properly documented, the borrower may receive a cancellation of a
percentage of the original amount of the principal borrowed plus accrued interest. The
percentage canceled each year and the number of years of cancellation that are allowed
depends on the type of cancellation. (see chart below)
CANCELLATION RATES
| Military |
12.5% per year for 4 years maximum. Maximum
cancellation of 50% of original loan. |
| Peace Corps/VISTA |
15% for 1st and 2nd year 20%
for 3rd and 4th year
Maximum cancellation of 70% of original loan. |
| Head Start |
15% for 1st through 6th
year 10% for 7th year
Maximum cancellation of 100% of original loan |
| All Others |
15% for 1st and 2nd year 20%
for 3rd and 4th year
30% for 5th year
Maximum cancellation of 100% of original loan |
Eligibility Guidelines
In order to receive a postponement or partial cancellation, the borrower’s account
must be current to the beginning date of the qualifying work or service.
The borrower must apply for partial cancellation for his or her loan by submitting a postponement
/deferment form at the beginning of the 12 month period and a cancellation form at
the end of the 12 month period of work or service.
The borrower must provide any documentation the school requests to show that he or she
qualifies for the partial cancellation.
No portion of any loan may be canceled for services the borrower performed before the
date the loan was disbursed, or during the same period he or she received the loan.
Defaulted loan accounts are not eligible for cancellation unless the only reason for
the default was the borrower’s failure to file a cancellation request on a timely
basis.
No payments made during a period for which a borrower qualified for a cancellation may
be refunded, unless the borrower made the payment because of an institutional error.
QUALIFYING SERVICES
Peace Corps or ACTION Programs
This type of partial cancellation is for service as a Peace Corps
volunteer or a volunteer under the Domestic Volunteer Service Act (ACTION programs).
Service in volunteer programs other than Peace Corps or ACTION is not eligible for this
type of partial cancellation.
Child or Family Services
This type of partial cancellation is for service as a full-time employee
of an eligible public or private nonprofit child or family service agency who is providing
or supervising the provision of services to high-risk children who are from low-income
communities and the families of such children. The main focus of the service must be the
children. The borrower cannot be providing services to
adults unless the adults are simply family members of the children
for whom the services are being provided.
High-Risk Children: 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 their homes, or are
involved in the juvenile justice system.
Low-income community: A
community in which there is a high concentration of children eligible to be counted under
Chapter 1 of Title I of the Elementary and Secondary Education Act of 1965, as amended.
Early Intervention Services
This type of partial cancellation is for service as a full-time
qualified professional provider of early intervention services in a public or other
nonprofit program under public supervision. Early intervention services are those services
defined in section 672 (2) of the Individuals with Disabilities Education Act that are
provided to infants and toddlers with disabilities.
Qualified professional provider of early intervention services:
A provider of services, as defined in section 672 (2) of the Individuals
with Disabilities Education Act, are developmental services that -- are provided under
public supervision;
This type of partial cancellation is for service as a full-time qualified
professional provider of early intervention services in a public or
other nonprofit program under public supervision. Early intervention services are those
services defined in section 672 (2) of the Individuals with Disabilities Education Act
that are provided to infants and toddlers with disabilities.
Qualified professional provider of early intervention services:
A provider of services, as defined in section 672 (2) of the Individuals with
Disabilities Education Act, are developmental services that --
- are provided under public supervision;
are provided at no cost except where federal and state law provides for a system of
payments by families, including a schedule of sliding fees. are designed to meet a
handicapped infant’s or toddler’s developmental needs in any one or more of the
following areas:
- physical development
cognitive development
language and speech development
psycho social development, or
self-help skills;
- meet the standards of the state, including the requirements of this part;
include:
family training, counseling, and home visits,
special instruction,
speech pathology and audiology,
occupational therapy,
physical therapy,
psychological services,
case management services,
medical services only for diagnostic or evaluation purposes, early identification,
screening, and assessment services, health services necessary to enable the infant or
toddler to benefit from the other early intervention services;
are provided by qualified personnel, including:
- special educators
speech and language pathologists and audiologists
occupational therapists
physical therapists
psychologists
social workers
nurses
nutritionists
- are provided in conformity with an individualized family service plan adopted in
accordance with Section 677 of the Individual with Disabilities Act.
This type of partial cancellation is for service as a full-time staff
member of a Head Start program. A full-time staff member is defined as someone who is
regularly employed in a full-time professional capacity to carry out the educational part
of a Head Start program. The program must operate for a full academic year, or its
equivalent, and the borrower’s salary may not be more than that of a comparable
employee working in the local educational agency.
- Law Enforcement or Corrections Officer
To be eligible for this type of partial cancellation, it must be determined by that the
borrower’s employing agency is eligible and that the borrower’s position
is essential to the agency’s primary mission.
Eligible employing agency :Eligible employing agency: A local, state, or federal agency is an eligible
employing agency if it is public-funded and its activities pertain to crime prevention,
control or reduction, or to the enforcement of the criminal law. Such activities
include, but are not limited to, police efforts to prevent, control, or reduce crime or to
apprehend criminals; activities of 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
addiction. Agencies that are primarily responsible for enforcement of civil, regulatory,
or administrative laws are not eligible.
Eligible Positions: In order for the borrower’s position to be
considered essential to the agency’s primary mission, he/she must be a full-time
employee of an eligible agency and a sworn officer or person whose principal
responsibilities are unique to the criminal justice system and are essential in the
performance of the agency’s primary mission. The agency must be able to document the
employee’s functions. NOTE: Persons whose official responsibilities are supportive,
such as those that involve typing, filing, accounting, office procedures, purchasing,
stock control, food service, or building, equipment or grounds maintenance are not
eligible for the law enforcement or corrections officer loan cancellation regardless
of where these functions are performed. Also, a borrower employed as a public defender
does not qualify for cancellation benefits under this provision.
- Nurse or Medical Technician
To be eligible for this type of partial cancellation, the borrower must
be a full-time nurse or medical technician providing health care services.
Nurse: A licensed practical nurse, a registered nurse, or other
individual who is licensed by the appropriate state agency to provide nursing services.
Medical Technician: A health professional providing specialized medical
services who is certified, registered, or licensed by the appropriate state agency in the
state in which he or she provides the services. The medical services provided by members
of the Allied Health Professions, as well as the
medical services provided by physical
therapists, speech and language pathologists, and audiologists are included in this
definition.
Allied Health Professions: The American Medical Association defines an
allied health professional as one engaged in the following types of services:
Anesthesiology Assistant Athletic Trainer
Blood Bank Technology Cardiovascular Technologist Cytotechnology
Diagnostic Medical Sonography Electroneurodiagnostic Technology Emergency Medical Services
Medical Assisting
Medical Illustration
Medical Laboratory Technology
Health Information Management
Nuclear Medicine Technology
Occupational Therapy
Ophthalmic Medical Technology
Perfusion
Physical Assistant Practice
Radiologic Technology
Additional medical services included in the partial cancellation for Medical Technician
are:
Audiologist
Physical Therapist
Speech and Language Pathologist
Military Service in an "Area of Hostility"
To be eligible for this type of partial cancellation, the
borrower must serve for a complete 12-month period in the U.S. Armed Forces 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.
For each completed 12-month period that a borrower receives partial
cancellation for service in the military, he/she is considered to have also used one year
of military deferment.
Teacher
There are several situations which qualify a borrower for partial
cancellation for teaching services. In all situations, however, there are some basic
qualifications a borrower must meet. Listed below are the basic qualifications and then
the specific situations which qualify. Please read the Basic Information and
Qualifications, and the Specific Qualifications to see if your position and your
loan qualify.
- Basic Information and Qualifications for Teacher Cancellation
Teacher cancellation is based on the duties presented in an official position
description, not on the position title.
The borrower must be teaching in a public or other nonprofit
elementary
or secondary school system in a state, as recognized by State statute.
Elementary education may include educational programs below grade 1 if State law includes
these programs as part of the State’s elementary educational system. There are no
cancellation provisions for teaching in postsecondary schools.
The borrower must be directly employed by the school system.
A teacher is defined as a full-time professional who provides
direct and personal services to students for their educational development through
direct classroom teaching
classroom-type teaching in a non-classroom setting; or educational services to students
directly related to classroom teaching such as school librarians or school guidance
counselors
There is no requirement that a teacher must teach a given number of hours a day in
order to qualify as a full-time teacher. The essential criterion for a full-time teacher
is whether the employing institution considers the individual as full-time for the
purposes of salary, tenure, academic rank, etc.
- A supervisor, administrator, researcher, or curriculum specialist is not a
teacher unless he or she primarily provides direct and personal educational
services to students.
- To receive partial cancellation, the borrower must teach for a complete
academic year or two semesters which are complete and consecutive and that
generally fall within a 12-month period.
- Teacher who is not certified or licensed: It is not necessary for a teacher to be
certified or licensed to receive cancellation benefits. However, the employing institution
must consider the individual to be a full-time professional for the purposes of salary,
tenure, retirement benefits, etc.
- Teacher’s aide: In order to be eligible, a teacher’s aide must meet the
definition of a "full-time teacher", must have a baccalaureate degree, and be a
professional recognized by the State as a full-time employee rendering direct and personal
services in carrying out the instructional program of an elementary or secondary school.
- Social Worker: A social worker, working full-time in a school setting, providing
direct and personal services to students could be eligible for teacher cancellation if the
services performed relate to the student’s interaction with his/her school
environment.
- School Psychologist: A psychologist working
full-time in a school setting is eligible for "handicapped" or "special
education" cancellation if a majority of the students counseled meet the statutory
definition.
- If a borrower is prevented, due to illness or pregnancy, from fulfilling his/her
obligation to complete the academic year, cancellation may be allowed if the borrower has
completed the first half of the academic year and begun teaching the second half
and the hiring authority considers the borrower, for
purposes of salary increment, tenure, and retirement, to have fulfilled his/her contract
for the academic year.
- Situations which DO NOT
Qualify
Volunteer Teacher
Member of a Cooperative Education Service Teaching services overseas, including schools
operated by the Armed Forces of the United States, schools operated overseas by the State
Department, and overseas mission schools.
SPECIFIC QUALIFICATIONS
- Full-time Teacher in a "Low Income" School
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications
plus
be teaching in a school that is listed in the Directory of Designated Low-Income Schools
which is released annually by the Federal government. The Directory is not currently
accessible from the web so a borrower may contact the Student Loan Office (920) 424-1336
or his/her employer to check the directory.
Subsequent Year Provision: Formerly, Federal regulations required that a school
be listed in the Directory each year in order for a borrower to receive partial
cancellation. The 1992 Federal Amendment altered this requirement. If you receive partial
cancellation one year for service in a school which is listed in the Directory, but the
next year this same school is not listed, you are now still eligible to receive
partial cancellation at this same school based on your prior year qualification.
- Full-time Special Education Teacher
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications plus the majority
of the students being taught must be infants, toddlers, children, or youth with
disabilities as defined in section 672(2) of the Individuals with Disabilities Act.
Infants and toddlers with disabilities: Infants and toddlers from birth to age 2,
inclusive, who need early intervention services for the following specified reasons as
defined in section 672 (1) of the Individuals with Disabilities Education Act:
- they are experiencing developmental delays, as measured by appropriate diagnostic
instruments and procedures in one or more of the following areas: cognitive development,
physical development, language and speech development, psycho social development, or
self-help skills; or
- they have a diagnosed physical or mental condition which has a high probability of
resulting in developmental delay.
The term infants and toddlers with disabilities may also include, at a
state’s discretion, individuals from birth to age 2, inclusive who are at risk of
having substantial developmental delays if early intervention services are not provided.
Children and youth with disabilities: Children and youth from ages 3 through 21,
inclusive, 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. Section 602(a)(1) defines "handicapped children" as children who
are mentally retarded, hard of hearing, deaf, speech or language impaired, visually
handicapped, seriously emotionally disturbed, orthopedically impaired, or other health
impaired children or children with specific learning disabilities who by reason thereof
require special education and related services.
- Full-time Teacher in a Shortage Area "Field of
Expertise"
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications plus be teaching in the
fields of mathematics, science, foreign languages, or bilingual education or in any other
"field of expertise" that is determined by a state education agency to have a
shortage of qualified teachers in that state. The majority of the classes being taught must
be in the borrower’s field of expertise.
- Full-time Teacher in a "Low Income" School
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications plus
be teaching in a school that is listed in the Directory of Designated Low-Income Schools
which is released annually by the Federal government. The Directory is not currently
accessible from the web so a borrower may contact the Student Loan Office (920) 424-1336
or his/her employer to check the directory.
Subsequent Year Provision: Formerly, Federal regulations required that a school
be listed in the Directory each year in order for a borrower to receive partial
cancellation. The 1992 Federal Amendment altered this requirement. If you receive partial
cancellation one year for service in a school which is listed in the Directory, but the
next year this same school is not listed, you are now still eligible to receive
partial cancellation at this same school based on your prior year qualification.
- Full-time Special Education Teacher
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications plus the majority
of the students being taught must be infants, toddlers, children, or youth with
disabilities as defined in section 672(2) of the Individuals with Disabilities Act.
Infants and toddlers with disabilities: Infants and toddlers from birth to age 2,
inclusive, who need early intervention services for the following specified reasons as
defined in section 672 (1) of the Individuals with Disabilities Education Act:
- they are experiencing developmental delays, as measured by appropriate diagnostic
instruments and procedures in one or more of the following areas: cognitive development,
physical development, language and speech development, psycho social development, or
self-help skills; or
- they have a diagnosed physical or mental condition which has a high probability of
resulting in developmental delay.
The term infants and toddlers with disabilities may also include, at a
state’s discretion, individuals from birth to age 2, inclusive who are at risk of
having substantial developmental delays if early intervention services are not provided.
Children and youth with disabilities: Children and youth from ages 3 through 21,
inclusive, 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. Section 602(a)(1) defines "handicapped children" as children who
are mentally retarded, hard of hearing, deaf, speech or language impaired, visually
handicapped, seriously emotionally disturbed, orthopedically impaired, or other health
impaired children or children with specific learning disabilities who by reason thereof
require special education and related services.
- Full-time Teacher in a Shortage Area "Field of
Expertise"
To be considered for this type of partial cancellation, the borrower must meet all
criteria listed under Basic Information and Qualifications plus be teaching in the
fields of mathematics, science, foreign languages, or bilingual education or in any other
"field of expertise" that is determined by a state education agency to have a
shortage of qualified teachers in that state. The majority of the classes being taught must
be in the borrower’s field of expertise.
- Bankruptcy Total Cancellation
Perkins Loans can not be discharged in
bankruptcy unless the borrower claims, and is granted, undue hardship by the bankruptcy
court.
In the event of the borrower’s death, the entire remaining balance of the student
loans will be canceled. The family should provide a death certificate or some other
documentation to certify the death.
- Disability Total Cancellation
The entire remaining balance of the student loans may be canceled at the
request of a borrower if the lending institution determines that the borrower has become permanently
and totally disabled. Permanent and total disability is defined as the inability
to work and earn money or attend school because of a medially determined impairment, if
that impairment is expected to continue for an indefinite period or to result in death.
Receipt of Social Security disability benefits does not automatically qualify a
borrower for permanent and total disability cancellation.
Date
this page was last updated
May 26, 2000
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