Student loan forgiveness is a very rare scenario, especially amidst the current student loan crisis. That is unless you hold a Federal Perkins Loan. Students who have just graduated can get full Perkins Loan forgiveness in a few easy steps.
The Federal Perkins Loan program is no longer being offered to students. The loan program was canceled on September 30th, 2017. If you are a Perkins Loan holder from before the program expired, it was approved by your school based on existing financial needs.
If you currently hold a Perkins Loan, this article will let you know exactly how you can get Perkins Loan forgiveness in 5 easy steps.
Let’s jump right in.
Who is Eligible for Federal Perkins Loan Forgiveness?
The Perkins Loan was provided to students after approval from their school or affiliated educational institution. To get the Perkins Loan canceled, you have to be working full-time in an eligible public service department.
Here are the public service roles that are eligible for Perkins Loan forgiveness:
- Early childhood education and child care providers
- Child care program or family services agency employees
- Full-time teachers (including librarians, school counselors, and full-time special education teachers). According to the eligibility criteria, a teacher is defined as anyone who provides direct services related to teaching in a classroom setting.
- Law enforcement/corrections officers
- Tribal college or university faculty members
- Military service staff members (U.S. Armed Forces) of any kind
- Service volunteers for AmeriCorps VISTA or Peace Corps volunteers
- Speech Pathologists holding a Master’s degree from a Title 1 low-income school
- Public defenders
- Professional providers of early disability intervention services
- Medical technicians or nurses
Teachers have a few more eligibility stipulations for Perkins Loan forgiveness. They must be teaching at either a Title 1 school (for children from low-income families) or in a field of education that’s facing a teacher shortage within their state.
Private school teachers can also become eligible, but only if the IRS determines their school to be a nonprofit institution.
You also need to have completed at least 12 months of service in one of the eligible fields. For teachers, this means a full academic year.
You can check to see if you currently hold a Perkins Loan by visiting the National Student Loan Data System (NSLDS) website.
How Long Does Perkins Student Loan Forgiveness Take?
Perkins Loan forgiveness, like for other federal loans, doesn’t happen immediately—regardless of the total loan amount.
It happens incrementally over a period of time that can last up to five years, depending on how much a person borrowed.
Here’s a breakdown of the Perkins Loan cancellation term:
- 15% of the principal loan amount for the first and second year
- 20% of the principal amount for the third and fourth year
- 30% of the principal loan amount for the fifth year
The loan forgiveness amount mentioned above includes the interest that would have accrued over the time period of the loan.
As an eligible candidate for loan cancellation, you’ll have to file some annual loan forgiveness paperwork, just like how you did when applying for the loan.
Full Perkins Loan Forgiveness in 5 Steps
Unlike several other federal student loan options, a Perkins Loan is not operated by the U.S. Department of Education. Your loan services or school needs to complete a specific application, which is why not every applicant will have a streamlined loan cancellation process.
Follow the steps below to make sure you have a smooth Perkins Loan cancellation.
1. Check for Eligibility
Both the applicant and their current employer need to meet certain requirements.
Confirm with your employer to make sure they comply with the eligibility requirements. For example, a teacher may need to confirm their school’s Title 1 specifications.
Remember, since Perkins Loan forgiveness requires both you and your employer to be eligible, both parties will have to confirm eligibility with your loan servicer.
2. Look for Perkins Loan Details
Log into the NSLDS website and review your Perkins Loan profile. You can find the school that provided you with the loan, as well as your loan servicer, in the NSLDS database.
You can also download detailed reports of your Perkins Loan profile, which gives you a clear picture of your current loan status. This will let you create a stronger case to get your Perkins Loan canceled.
3. Contact your Loan Services or School
Once you have all the relevant loan details at your disposal, reach out to your school’s financial aid department and declare your intent to apply for loan forgiveness.
The financial aid department will let you know if you’re required to complete and submit an application with them or if they are already servicing Perkins Loan cancellation applications via the end-servicer.
4. Complete the Perkins Loan Forgiveness Application
Different loan services may have different applications. However, they all require the following information:
- Personal details and contact information
- Perkins Loan account number
- What (eligible) public service you’re currently in
- Employer details and eligibility certificate
- Employer certification to qualify you as an employee (with an official seal or signature)
- The starting and end date for the full service year you need loan cancellation for
- Your personal signature
Once you have approval for your starting year of service, your employment term doesn’t end. This means that you have to complete the aforementioned paperwork on an annual basis to have your Perkins Loans canceled in yearly increments.
5. Prepare and File Annual Cancellation Requests
As mentioned, you will need to complete the loan forgiveness application form every year, for the four to seven-year cancellation term.
Some loan servicers require that you submit an ‘Anticipation of Cancellation’ form at the beginning of the year, and a ‘Request for Cancellation’ at the end of the total loan cancellation period.
This option is available on the vast majority of loan servicer forms.
Make sure you double-check all of your personal and loan details when you’re completing the paperwork. Reach out to your school or loan servicer and maintain communication with them throughout the loan forgiveness period.
Common Mistakes in Perkins Loan Forgiveness Applications [And How to Avoid Them]
Here are some of the most common mistakes that people make when applying for Perkins Loan forgiveness.
- Mixing Up the Start and End Dates: Your loan forgiveness term will need to line up with the total time you’ve spent employed at an eligible public service institution. In addition, when you file the following year’s paperwork, the dates need to match up to the ones in the previous application. Make sure you avoid this at all costs, or you’ll be denied.
- Not Having Sufficient Employer Verification: Each Perkins Loan forgiveness form has an employer’s section that verifies your employment with them. In case the form requires an official seal and your office puts a stamp there, the servicer will deny the request. You may need to submit the application to the district office to request a proper seal.
- Mistaking the Loan Servicer with the Lending Institution: Every loan forgiveness application form asks who the original lender was. This is always your school and not the loan servicer. This is a common mistake that always leads to denial of forgiveness. In case you attended more than one school and are not sure about which one gave the loan, confirm this information via the reports from the NSLDS website.
- Filling the Same Form Despite the Loan Servicer Changing: Sometimes the school that gives you the loan will hand over most of the responsibility to the loan servicer. Or, your Perkins Loan may go from one loan servicer to another. If this happens, reach out to your current loan servicer and ask them for the new loan cancellation forms.
Overall, make sure there are no discrepancies in any of the forms you submit. Also, follow your loan servicer’s instructions to the letter to avoid being denied loan forgiveness.
Circumstances that Allow for Perkins Loan Discharge
The Perkins Loan can also be fully discharged in special circumstances, which include:
- Death of borrower
- Service-related disability for military veterans
- Spouse of a victim of the 9/11 incident
- Permanent disability
- School closure before completion of the study program
You can get 100% of your loan canceled if you meet these requirements. The application process for Perkins Loan discharge is similar to that of loan forgiveness. Reach out to your school for further information.
Should You Apply for Perkins Loan Forgiveness?
Yes, mainly because it’s easy to apply and get your loan cancellation approved.
Student loan repayment is one of the biggest financial burdens in any professional’s life. Student loan forgiveness brings you one step closer to freedom from loan payments, while also giving you a head start in a potentially rewarding career.
If you’re not employed in one of the eligible public service loan forgiveness institutions, it’s worth making a career shift to one, just to get rid of a Perkins Loan.
Check out these other student loan forgiveness programs and find out if you qualify for any additional loan forgiveness plans.[reviewform]