What is a Loan Cancellation?

Federal student loans and by extension, the Federal Perkins Loan, can be cancelled in certain circumstances. Cancellations are available if your work for a certain period in a public service job, which includes military service members. Another category is for borrowers with serious disabilities or after a borrower passes away so that the debt is not passed on to the borrower’s estate. You must apply for loan cancellation and applications are subject to review. 

Perkins Loan Teacher Cancellation 

Who is considered a teacher? 

A teacher is someone (including for example, a school librarian or guidance counselor) who provides elementary and secondary school students with direct services directly related to classroom teaching. You do not need to be certified or licensed to receive cancellation benefits. However, your employing school must consider you to be a full-time professional for the purpose of salary, tenure, retirement benefits, etc. If you are a supervisor, administrator, researcher, or curriculum specialist, you are not considered a teacher unless you primarily provide direct and personal educational services to students.  

How long must I teach? 

For each full academic year (or its equivalent) of full-time teaching service, you are eligible to have a portion of your loan canceled. There is no requirement that you must teach a given number of hours a day to qualify as a full-time teacher; the employing school is responsible for making that decision. 

An “academic year or its equivalent” for cancellation purposes is defined as one complete school year or two half-years that are from different school years. The two half-years must be complete and consecutive, excluding summer sessions, and must generally fall within a 12-month period. 

Teaching Part-time at Multiple Schools 

You can have your loan canceled if you are simultaneously teaching part-time in two or more schools if an official at one of the schools where you taught certifies that you taught full-time for a full academic year. 

Teaching at a Private School 

Your loan can be canceled for services performed in a private school if the private school has established its nonprofit status with the Internal Revenue Service, and if the school is providing elementary and/or secondary education according to state law. 

Teaching at a Preschool or Prekindergarten Program 

Your loan can be canceled only if the state considers such a program to be a part of its elementary education program. A low-income-school-directory designation that includes prekindergarten or kindergarten does not suffice for a state determination of program eligibility. 

Teaching at Low-income Schools 

A cancellation based on teaching in a school serving students from low-income families will be granted only if you taught in an eligible school as determined by the state education agency. To be considered a “low-income school,” the school must be in a school district that qualified for federal Title I funds in the year for which the cancellation is sought. Also, more than 30 percent of the school’s enrollment must be made up of children in the Title I program. 

Each year, the U.S. Department of Education (ED) publishes a list of low-income elementary and secondary schools. To find out if a school is classified as a low-income school, check our online database for the year(s) you have been employed as a teacher. Questions about the inclusion or omission of a particular school must be directed to the state education agency contact in the state where the school is located and not to ED. 

All elementary and secondary schools operated by the Bureau of Indian Education (BIE)—or operated on Indian reservations by Indian tribal groups under contract with BIE—qualify as schools serving 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. Under certain circumstances, the institution that holds your Perkins Loan may permit retroactive cancellation if you can demonstrate that you qualified for cancellation in a prior year. However, the institution may not refund payments made during such a retroactive period. 

Teaching at an Educational Service Agency 

If you teach at an educational service agency, your teaching service may qualify for cancellation if the period of qualifying service includes Aug. 14, 2008, or begins on or after that date. 

Teaching Special Education 

You must have an official at the public or other nonprofit elementary or secondary school certify that you are a full-time special education teacher of infants, toddlers, children, or youth with disabilities either on the deferment/cancellation form or on an official letter from the school bearing the school's seal or letterhead. 

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. 

The services are

  • speech and language pathology and audiology, 
  • physical therapy, 
  • occupational therapy, 
  • psychological and counseling services, and 
  • recreational therapy. 

Teaching in a Designated Subject Shortage Area 

This cancellation is based on full-time teaching if there is a shortage of teachers in your subject area. Each year the state education agency determines any subject shortage areas in the elementary and secondary schools within the state. Check with your local school system or state education agency to find out if your subject-matter area has been so designated. If you teach full-time in science, mathematics, foreign language, or bilingual education, you qualify for cancellation even if the state has not designated one of these subject areas as a shortage area. For a borrower to be considered as teaching in a field of expertise, the majority of classes taught must be in that field of expertise. 

Other Employment or Volunteer Service that Qualifies for Perkins Loan Cancellation 

In addition to teaching, the following employment or service may qualify you for a full or partial Perkins Loan cancellation depending on the type of loan you have and the date of the loan: 

  • Early childhood education provider 
  • Employee at a child or family services agency 
  • Faculty member at a tribal college or university 
  • Firefighter 
  • Law enforcement officer 
  • Librarian with master’s degree at Title I school 
  • Military service 
  • Nurse or medical technician 
  • Professional provider of early intervention (disability) services 
  • Public defender 
  • Speech pathologist with master’s degree at Title I school 
  • Volunteer service (AmeriCorps VISTA or Peace Corps) 

If you still have questions or need additional assistance, please submit a ticket