Federal Perkins Loan cancellation is related to eligible volunteer service or eligible employment and the timeframe that the position existed. Under specific circumstances, discharge of your Perkins Loan may apply.
Cancelling Perkins Loan Teacher Contract
Eligibility Requirements
There are certain instances where you may qualify for a 100% cancellation of your Federal Perkins Loan. This includes serving full-time in a non-profit or public secondary or elementary school system as one of the following:
A teacher in foreign languages, mathematics, bilingual education, science, or another expertise as outlined by a state education agency to have a shortage of qualified teachers in that location.
A teacher in a school that specializes in working with low-income family students.
Any special education teacher including those who work with disabilities, youth, children, toddlers, or infants.
Teacher cancellation eligibility is not based on the position title but the official position description. You need to be directly employed by the school system to receive a cancellation. There isn’t a provision for those teaching in postsecondary schools to cancel Federal Perkins Loans.
If you are employed in a teaching service that qualifies for cancellation, you may additionally qualify for deferment. Check with your college’s Perkins Loan servicer or contact your college directly for more deferment application information.
Who Is Defined a Teacher?
Guidance counselors, school librarians and anyone who offers elementary or secondary school students direct services that correlate to classroom teaching meet the definition of a teacher.
It is not required that you are licensed or certified to obtain cancellation benefits. Your employing school needs to consider you a full-time professional however for tenure, salary, retirement benefits, etc. to qualify. If you are a researcher, administrator, curriculum specialist, or supervisor, you are not considered a teacher unless you offer personal and direct educational services to the student body.
What Is the Length of Teaching?
You will be eligible to have part of your loan canceled for every full academic year or its equivalent. To qualify as a full-time teacher, there is no requirement stating that you need to teach a certain amount of hours each day to qualify as a full-time teacher. Your employing school has the responsibility to determine these factors.
The definition of an “academic year or its equivalent,” when it comes to cancellation is defined as one full school year or two half-years over different school years. Note that the 2 half-years need to be consecutive and complete to be eligible. They also need to occur within a 12-month period and exclude summer sessions.
Private School Teaching
If the private school has established its non-profit status with the Internal Revenue Service, and if the school offers secondary or elementary education following state law, your loan may be canceled for performing services in a private school.
Prekindergarten or Preschool Program Teaching
If the state considers your program to be part of its’ elementary education curriculum, your loan for prekindergarten or preschool may be canceled. Note that a designation for a low-income-school-directory designation that includes kindergarten or prekindergarten will not meet a state determination regarding the eligibility of the program.
Part-time at Multiple Schools Teaching
If you are teaching on a part-time basis in 2 or more schools and if an official at one location where you were teaching can certify that you taught full-time for a complete academic year, you may be eligible to have your loan cancelled.
Low-income School Teaching
Schools dedicated to working with students from low-income families will only grant a cancellation if you taught in an eligible school as determined by the state education agency. To be classified as a “low-income school,” the facility needs to be located in a school district that qualified for federal Title I funds in the year that the cancellation is being sought. Over thirty percent of the school’s enrollment needs to be made up of kids enrolled in the Title I program to qualify.
Every year the ED or U.S. Department of Education publishes a list of low-income secondary and elementary schools. Check the online database to discover if a school falls under the low-income classification for the year you have been working as a teacher. Questions regarding the omission or inclusion of a certain school need to be sent to the state education agency contact in the state where the school is situated and not the U.S. Department of Education.
All secondary and elementary schools operated by the BIE or Bureau of Indian Education or those operating on Indian reservations by tribal groups under contract with the BIE qualify as schools that serve low-income students.
NOTE: If you have had a portion of your loan canceled for teaching at a low-income elementary or secondary school in one year, you can continue to have portions of your loan canceled for teaching at that school even if it is not listed as a low-income school in later years. The institution that maintains your Perkins Loan, in some circumstances, may allow retroactive cancellation if you can demonstrate that you were eligible for cancellation in a previous year. The institution might refuse to refund payments made during such a retroactive timeframe.
Educational Service Agency Teaching
Individuals teaching at an educational service agency may have their teaching service qualify for cancellation if the timeframe of qualifying service begins on or after August 14, 2008.
Special Education Teaching
An official at the non-profit or public secondary or elementary school must certify that you are a full-time special education teacher of children, infants, youth with disabilities, or toddlers on the cancellation/deferment form. They can also declare this information via an official letter on the school’s letterhead or seal.
If you provide one of the services listed below, you qualify as a teacher only if you are licensed, certified, or registered by the appropriate state education agency for that area in which you are providing related special educational services, and the services you provide are part of the educational curriculum for handicapped children.
If you are certified, licensed or registered by the proper state education agency for the area that you provide special education services and the services provided are part of the educational curriculum for special needs children, you qualify as a teacher if you offer one of the services below:
Qualifying Teacher Services
- Physical Therapy
- Counseling and Psychological Services
- Recreational Therapy
- Occupational Therapy
- Speech and Language Audiology and Pathology
Designated Subject Shortage Area Teaching
If there is a teacher shortage in your subject expertise, a cancellation may qualify based on full-time teaching. Every year, any subject shortages in secondary and elementary state schools are determined by the state education agency. Speak with your local state education agency or school system to determine if your subject-matter area is within this designation.
If you specialize in bilingual education or teach full-time math, science, or foreign language, you will qualify for cancellation even if the state doesn’t classify these subjects as a shortage area. The majority of classes need to be in that field of expertise for the borrower to be considered as teaching in a field of expertise to qualify.
How Much Can Be Cancelled for Teaching Service?
If you are eligible for cancellation under any of the categories listed above, up to 100 percent of the loan may be canceled for teaching service, in the following increments:
Under the eligibility of the above-listed categories, you may be eligible for up to 100 % cancellation for teaching service in the increments listed below:
- 15% canceled per year for the 1st and 2nd years of service
- 20% canceled for the 3rd and 4th years
- 30% canceled for the 5th year
Note that every amount canceled per year includes the interest accumulated during the year as well.
Additional Volunteer Service or Employment That Qualifies for Cancelling Perkins Loan
Beyond teaching, the service or employment listed below may qualify you for a partial or full Perkins Loan cancellation. This will depend on the kind of loan you have along with the loan’s date.
- Firefighter
- Public Defender
- Military Service
- Law Enforcement Officer
- Early Childhood Education Provider
- Medical Technician or Nurse
- Faculty Member at a Tribal University or College
- Speech Pathologist with Master’s Degree at Title I School
- Librarian with Master’s Degree at Title I School
- Employee at a Child or Family Services Agency
- Volunteer Service (AmeriCorps, Peace Corps or VISTA)
- Professional Provider of Early Intervention Disability Services
Perkins Loan Discharge
Your Perkins Loan may be discharged under specific conditions. Once your loan is discharged, it means that you are no longer obligated to pay it back. The conditions listed below that may lead to discharge include the following:
- Total and Permanent Disability
- Death
- Spouse of a 9/11 events victim
- Bankruptcy
- School Closure
