Do you qualify for loan forgiveness or lower monthly payments?
CALL US TO FIND OUT! 800-820-8128

What Should You Know about Perkins Loan Cancellation?

Perkins Loan Cancellation

Carl Dewey Perkins, a Democrat from Kentucky, was a politician and member of the United States House of Representatives. The “Perkins Loan,” a federal student loan that bears his name, exemplifies Perkins’ legacy in support of education and the underprivileged.

Perkins Loans is low-interest student loans available to students with exceptional financial needs. The participating schools created and managed Perkins Loans, which were then repaid to the school. Unfortunately, at this time, no new Perkins loans have been issued. Therefore, the Ministry of Education announced the Perkins Loan Cancellation.

Perkins loans are government-backed loans made available by the school. Because they are subsidized, Perkins loans do not accrue interest until you begin repaying them. Once repayment begins, Perkins loans have a fixed interest rate of 5% and a 10-year repayment term.

Unlike most federal loans, Perkins loans were not made directly by the government. Instead, undergraduate and graduate students could make low-interest Perkins loans to people in need of money in an emergency. Perkins loans had a lifetime borrowing limit of

  • $27,500 for student loans
  • and a total of $60,000 for graduate loans (including student loans).

Students have not taken out new Perkins loans in over a year, as the last payments on Perkins loans were made on June 30, 2018. Perkins’ existing loans, on the other hand, have yet to be repaid.

Compared to other federal loan programs, Perkins loans have different loan disbursement and forgiveness options. As a result, it is critical to understand if you have a Perkins loan when developing a student loan debt repayment option

How to apply for Perkins Federal Loan?

Before filing a promissory note, all students must be approved for a Perkins Federal Loan by the Office of Financial Aid.

If you have been offered a Perkins federal loan and wish to accept it, you must take the following steps:

1: Enter the scholarship information into MyCoyote Student Center and accept the Perkins loan.

2: Finish the Master Note (MPN) *

3: Fulfill the Entry Interview Requirements

Steps 1-3 must be completed within 30 days of receiving the offer, or the offer will be canceled.

*Before filing a promissory note, all students must be approved for a Federal Perkins Loan by the Office of Financial Aid. If you want to decline your offer, you can do so through the MyCoyote Student Center.

Advantages of Perkins Loan 

One of the best features of the Perkins loan for those who qualified was that it was subsidized. It means that the federal government paid interest as long as you were enrolled in school. Furthermore, you had a nine-month grace period after graduation before you had to begin repaying the loan, as opposed to most other federal loans’ six-month grace period. In addition, when compared to other federal loans, the Perkins Loan has a more permissive loan write-off policy. If you work in the public sector, such as

  • a teacher
  • firefighter
  • law enforcement officer
  • or nurse

you may be able to have your loan forgiven entirely.

Credit limits 

Perkins loans are only available to students up to a certain amount per year. As an undergraduate student, you are not permitted to borrow more than $5,500 per year, for a total of $27,500. As a graduate student, you cannot borrow more than $8,000 per year. In addition, Perkins student and alumni loans cannot be used to borrow more than $60,000 total.

Perkins loans are backed by the government but distributed by individual colleges and universities. The maximum loan amount is determined by the amount of credit available at your school. That means that even if you qualify for Perkins loans, you are not guaranteed to borrow the maximum amount each year.

Why did the Perkins Federal Loan Program come to an end?

Perkins Loan Cancellation

Due to budget constraints, the federal government began phasing out the Perkins credit in 2015. Still, on September 30, 2017, the federal government closed the Perkins loan program to streamline its ever-expanding and inefficient college education funding system.

The Perkins Loans program, which serves the needs of low-income students, was terminated despite calls from Democratic and Republican senators to extend it until 2019. Republican Senator Lamar Alexander voted against this call in the Senate.

Over 500,000 students benefited from the Perkins loan, which cost $1.2 billion. It was set to expire in 2015, but Congress extended it for two years.

Perkins Loans are federal student loans for undergraduate and graduate students with exceptional financial needs. However, they are still subsidized, which means you will not pay or accrue interest while studying or during the nine-month grace period after graduation. 

In the 1950s, Perkins loans were known as National Defense Student Loans (NDSL). They were initially available only to needy students planning to study mathematics, engineering, or a modern foreign language or who wanted to teach.

Perkins loans are now available in more significant amounts with more lenient forgiveness requirements. In addition, they are available to all students in need, not just those studying in specific fields.

Those in favor of ending the Perkins loan program hoped to simplify and centralize federal student loans, while those in favor of keeping it alive were concerned about maintaining low-cost options for the most vulnerable borrowers.

Perkins Loan Cancellation details 

You may have options if you want your Perkins loan debts canceled, but only if you are not in student loan default. For most federal student loans, you are in default if you have not repaid your loans in full for at least 270 days. However, in the case of Perkins loans, “the loan holder may declare the loan defaulted if you fail to make any scheduled payment by the due date,” according to the Department of Education.

If you’re having difficulty repaying your Perkins loan, you may be eligible for a deferment or forbearance, which allows you to suspend or reduce your monthly payments temporarily.

You can choose to defer your loans if you are a borrower registered for at least part-time doctoral studies and are not in arrears. However, remember that interest rate will be paid on it during the grace periods because the state subsidizes the loan. If you consider this option, your school’s financial aid department will be your best resource.

Obtaining a loan 

For various reasons, your Perkins Loan Cancellation means you will no longer be required to repay it. These include death, total and permanent disability, the school closing before the student could complete the course if the loans were received on or after January 1, 1986, and, in rare cases, bankruptcy.

If you have worked full-time in a public or non-profit elementary or high school system as a teacher serving students from low-income families; as a special education teacher (including early special education, such as for infants and toddlers or children with disabilities); or as a teacher in mathematics, science, foreign languages, bilingual education, or any field determined by the state to suffer from shortages, you may be eligible for a 100 percent write-off of your Perkins loans.

There are many other special requirements for teachers to receive Perkins Loan Cancellation. Refusal to work or participate in volunteer activities. Several other professions and volunteer services qualify for Perkins Loan Cancellation. After five years of eligible service, many of them are eligible for a full refund.

Remember that cancellations are usually made on a sliding scale based on the total amount owed: 15% for the first year, 15% for the second year, 20% for the third year, 20% for the fourth year, and 30% for the fifth year.

There are 2 types of Perkins Loan Cancellation: full and partial.

Full Cancellation

In many cases, the original principal balance will be canceled by the calculations below:

15% for the first year, 15% for the second year, 20% for the third year, 20% for the fourth year, and 30% for the fifth year.

 Please remember that any interest you earn during the year will be transferred for each year you are eligible for a rebate.

Partial Cancellation

For AmeriCorps VISTA or Peace Corps volunteers, the Perkins Credit Cancellation Eligibility type will cancel up to 70% of the loan amount. The calculations are following:

15% for the first year, 15% for the second year, 20% for the third year, 20% for the fourth year.

On the plus side, if you are not yet eligible but will be soon, you can request a reprieve until cancellation. This is beneficial for recent graduates who do not have a minimum of 12 months of work experience in their field. This prevents them from making Perkins loan payments until they ask for student loan forgiveness.

For Whom is Perkins Loan Cancellation Available?

However, Perkins Loan Cancellation (also known as forgiveness) is only available to people who work in certain professions:

  • A teacher working full-time at secondary schools for underprivileged students;
  • A teacher working full-time at school in the areas where teachers are in low supply, such as some foreign languages, science, etc. ;
  • Teachers working full-time with people with limited abilities;
  • A governmental or non-profit child or family welfare agency employee works with at-risk children and families in disadvantaged areas.
  • A nurse and medical technician working full-time
  • People serving in the US army in hazardous areas

Options for Perkins loan forgiveness

Perkins Loan Cancellation

 Unlike most other federal loans, Perkins loans are not eligible for income-based repayment plans unless combined with other federal loans. 

 However, don’t rush to consolidate your Perkins loan. Most other federal student loans have fewer forgiveness options than Perkins loans. Instead of waiting ten years for loan forgiveness (as is the case with government service loan forgiveness), Perkins loans are forgiven gradually over five years; it makes student loan consolidation unprofitable.

How to Make an Application for Perkins Loan Cancellation

You can always cancel your Perkins loan if you cannot repay it because you did not file a Perkins Loan Cancellation request on time.

Keep in touch with your school or school loan department to ensure that forms are submitted on time. You’re at a loss for where to begin? Contact the financial aid office at your school.

In many cases, applications are processed on campus by the school.

If your school outsources its loans to a manager, you must locate them. Each maintenance specialist’s one-page claim form looks different, but they all ask for the same basic information.

Here are three Perkins Loan Cancellation Form examples:

  • Accounting Services at Heartland ECSI University
  • Educational Services provided by AEC
  • You may also be referred to a loan officer who will assist you in locating forms for your specific school.

Regardless of where you apply, make sure to use the form that corresponds to your specific occupation. In most cases, you will be required to provide proof that you are licensed or certified to work in your field. You will also require the signature of your employer.

There will also be forms for personal situations, such as attending a closed school before you graduate.

If you find yourself needing to apply for loan forgiveness due to a disability, you can do so at SLR.

The website, which operates through the Federal Student Aid, requests that you print and submit your form, along with supporting documents from your doctor or government agency to the Department of Education.

Other Financial Aid Options for Students

We want to inform you not only about Perkins Loan Cancellation but also about other options you may find to avoid the loan routine. 

Politicians who believed it was time for a more simplified and less confusing student loan repayments allowed the federal Perkins loan program to expire. While the Perkins Loan is no longer available, there are other funding options for students who demonstrate financial need. So fill out the FAFSA to determine what you qualify for.

The federal Pell Grant is one option for undergraduate students. Pell grants, unlike student loans, do not have to be repaid. The maximum reward varies from year to year; for 2019-2020, the maximum Pell grant is $6,195, and the minimum is $650.

The amount of Pell’s student grant is determined by his expected family contribution, or EFC, as calculated by the FAFSA; school fees; part-time or full-time student status; and the expected duration of his presence. All eligible students will receive the total amount to which they are entitled from participating schools.


The Supplemental Federal Education Grant, which is also available to undergraduate students experiencing financial hardship, is another option that does not have to be repaid. FSEOG is administered directly by your school’s financial aid office. The amount you are eligible for is calculated using information from your FAFSA.

FSEOG Scholarships range from $100 to $4,000 per year, with the amount of other financial aid you receive is one of the determining factors. Because not all schools participate in the FSEOG program and grant funds may run out, contact your school office as soon as possible to find out if they are. These are the main points that you should know about the Perkins Loan Cancellation. If you have any questions, contact us at Student Loan Resolved to get rid of the student loan debt.