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Borrowers with Perkins student loans may be eligible for forgiveness. Although the Federal Perkins Loan Program was discontinued in 2017, forgiveness (officially known as cancellation) is still an option for qualifying individuals who are repaying these loans.
Read on to learn the details about Perkins Loan forgiveness, the eligibility requirements, and how to apply.
Key Points
• Perkins Loan forgiveness may partially or fully cancel Perkins student loan debt for those who work full-time in public service.
• Qualifying roles include certain teaching, law enforcement, and health care jobs, each with specific requirements.
• Perkins forgiveness is granted incrementally, typically 15% in the first two years, 20% in the third and fourth years, and 30% in the fifth year.
• To apply for forgiveness, contact your school or loan servicer for application forms and detailed instructions.
• Those not eligible for Perkins forgiveness may consider alternatives such as Federal Direct Loan Consolidation, income-driven repayment plans, or refinancing student loans.
How Does Perkins Loan Forgiveness Work?
Through Perkins Loan forgiveness, your Perkins Loan debt could be partially or fully canceled. You may qualify for forgiveness by working full-time in a public service job, such as military service, law enforcement, or education.
Once a Perkins Loan borrower applies and is approved for student loan forgiveness, they will no longer be required to repay some or all of their loans. However, federal Perkins Loan forgiveness doesn’t happen all at once. Instead, forgiveness happens in percentage increments that increase over time (see more on that below).
What Are Perkins Loans?
Perkins Loans are subsidized low-interest federal student loans for undergraduate and graduate students who have exceptional financial need. Under the Perkins Loan program, undergraduate students could borrow $5,500 per year with a cumulative maximum of $27,500, while graduate or professional students could take out $8,000 annually with a cumulative maximum of $60,000.
Perkins Loans have a fixed student loan interest rate of 5.00%. Because the loans are subsidized, the government covers the interest that accrues on Perkins Loans while borrowers are in school. Repayment for Perkins Loans begins nine months after a student graduates, leaves school, or drops below half-time status.
As noted, the Perkins Loan program ended in 2017, when Congress did not renew it. The federal government allowed final Perkins Loan disbursements through June 30, 2018.
Who Qualifies for Perkins Loan Forgiveness?
You may be eligible for Perkins Loan forgiveness if you work full-time in a public service role. Jobs that may qualify a borrower for Perkins Loan forgiveness include:
• Elementary or secondary teacher in a low-income district or service agency in a teacher-shortage area
• Special education teacher at a public or nonprofit school
• Preschool or prekindergarten teacher
• Law enforcement officer or correctional officer
• First responder
• Attorney for a federal public or community defender organization
• AmeriCorps, VISTA, or Peace Corps volunteer
• Member of the U.S. Armed Forces
• Health care worker, such as a nurse or medical technician
For each job, there are a number of requirements that need to be met to qualify for federal Perkins Loan forgiveness, including the number of years you must work in that profession.
Borrowers who are not eligible for Perkins student loan forgiveness might be able to have their Perkins student loans discharged in certain circumstances, such as:
• Your school closed while you were attending it
• Bankruptcy
• Total and permanent disability
• Death
If any of these circumstances apply to your situation, contact your school’s financial aid office or loan servicer about getting a loan discharge.
How to Apply for Perkins Loan Forgiveness
To apply for Perkins student loan forgiveness, contact the school that originally issued your Perkins Loans or your loan servicer to get the application forms. Your school or loan servicer can also give you specific instructions on how to apply.
As part of the application process, be aware that you will need to show proof that you work in a qualifying public service job.
What Happens if You’re Approved for Perkins Loan Forgiveness?
If you’re approved for Perkins Loan forgiveness, you will likely receive forgiveness for your loans in increasing percentages. For example, if you are eligible for 100% forgiveness, your debt will typically be forgiven in these years and increments:
• First and second years of qualifying employment: 15% of the loan amount
• Third and fourth years of of qualifying employment: 20% of the loan amount
• Fifth year of qualifying employment: Final 30% of the loan amount
Recommended: Are Forgiven Student Loans Taxed?
What to Do if You Don’t Qualify for Perkins Loan Forgiveness
If you aren’t eligible for Perkins student loan forgiveness, there are other options that can help you manage or lower your student loan payments.
Federal Direct Consolidation Loan
With a Direct Consolidation Loan, you can combine one or more federal student loans, including Perkins Loans, into a new loan to lower your monthly payment amount and access federal forgiveness programs, including Public Service Loan Forgiveness. After consolidation, you’ll have one loan with a fixed interest rate, which may be easier to manage.
Income-Driven Repayment Plans
Income-driven repayment (IDR) plans base your federal loan payments on your discretionary income and family size. This often results in a lower monthly loan payment. Under an IDR plan, you could qualify for forgiveness of your remaining debt after 20 or 25 years.
Perkins Loans are not eligible for IDR plans, but if you consolidate them with a Direct Consolidation Loan, you can enroll in an IDR plan.
Student Loan Refinancing
Refinancing student loans allows you to replace your old loans with a new private loan, ideally one that has a lower interest rate and more favorable terms.
Borrowers interested in refinancing student loans to save money should compare lenders and offers to choose the best one for their situation. Also, be aware that refinancing federal loans makes them ineligible for federal benefits such as income-driven repayment.
A student loan refinancing calculator can help you decide whether refinancing makes financial sense for you. You may pay more interest over the life of the loan if you refinance with an extended term.
Recommended: Student Loan Refinancing Guide
The Takeaway
Borrowers with Perkins Loans may qualify for forgiveness if they are employed full-time in a qualifying public service job. They might get up to 100% of their loan amount canceled.
Those who are not eligible for Perkins Loan forgiveness may be able to have their Perkins Loans fully discharged in certain situations, such as bankruptcy or if their school closed before they could earn their degree.
However, these aren’t the only options to help borrowers tackle student loan debt. You can also explore methods that could help lower your monthly loan payments, such as an income-driven repayment plan, a Federal Direct Consolidation Loan, or student loan refinancing.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Are Perkins Loans still available?
The Perkins Loan program ended on Sept. 30, 2017, and final disbursements were made by June 30, 2018. If you have questions about disbursements related to your Perkins Loan, contact either the school or the school’s loan servicer.
What kinds of jobs or public service roles help with Perkins Loan cancellation?
Teachers and people in certain education-related jobs, such as a school speech and language pathologist, along with first responders, military personnel, and health care workers, among others, may qualify for Perkins Loan forgiveness. AmeriCorps VISTA or Peace Corps volunteers may also be eligible.
My college shut down before I graduated. What happens with my Perkins Loan?
You may be eligible for discharge of your Perkins Loan in this scenario. Contact the school’s Perkins Loan servicer for details on how to apply for discharge of your loan.
About the author
Melissa Brock
Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.
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