What Other Employment Types Qualifies for Cancellation?

If borrowers meet the eligibility requirements, then they can enjoy partial or full cancellation of their debt. As mentioned before, a debtor will receive some Perkins loan forgiveness for each year of full-time service. For the first and second years, this amount is a 15% reduction, which increases to 20% in the next two years. Finally, in the fifth year, a debtor receives a 30% cancellation. The cancellation percentage also includes the interest payment that accumulates during the year.

Teachers are not the only public service providers who can take advantage of this Perkins loan forgiveness program. Firefighters, military service personnel, nurses, law enforcement officers, volunteer service providers, etc. can qualify for the program. However, their eligibility depends on the type of loan and its date. All employment categories can get up to 100% cancellation, except for volunteers who can receive only up to 70% reduction. Moreover, the period for full elimination varies depending on the job type. Teachers, attorneys, librarians, firefighters, or nurses need to provide five years of qualifying service to get full cancellation. In contrast, staff members in prekindergarten or Head Start program cancellation need to work for seven years to eliminate all their debts.

Perkins Loans Discharge

A borrower is not obliged to repay the debt due to exceptional cases, such as disability or death. This advantage is due to the Perkins loan discharge program. If debtors become eligible for the loan discharge , they do not need to pay back a penny. However, there should exist special conditions. In case of bankruptcy, death, service-related or total/partial disability, and closing school, borrowers’ debts will be written off. Also, if the debtor’s spouse is the victim of the 9/11 events, then the discharge program eliminates the debt. The eligibility criteria for each discharge program varies.

Closed School Discharge

This type of Perkins loan forgiveness program aims to help students who cannot graduate because their schools are closed. Borrowers can get 100% elimination of their Perkins loans, if their school had closed before completing their degrees. More specifically, if debtors are enrolled or on leave at the time of school closure, they can become eligible. In case of withdrawal, the school must close during the 120 days.

A borrower meeting these conditions should contact the loan servicer to start the discharge process. However, they need to continue repaying the loan until they get the discharge. Once discharged, debtors will enjoy extreme benefits. First, there exists no obligation to pay back the loan. Second, the student receives a refund for the prior payments. Third, the credit history related to this loan is erased from the report of the debtor. Besides, borrowers can automatically be eligible for the discharge. If, after the closure, the debtor does not apply for the new school during the three years, then the debt will be erased automatically.

Debtors should keep in mind that if they transfer the credit hours from closing school to a new one to complete the degree, they will not qualify for the discharge program.

Discharge for Disability

Total or permanent disability can also be an eligible condition for Perkins loan forgiveness. Debtors need to fill the TPD application and send it to Nelnet, together with the necessary documentation for proving disability. Nelnet is the servicer which aids the Department of Education in TPD discharge programs.

Three types of documents can be qualifying proofs for disability. The first document is from the U.S Department of Veterans Affairs. Such documentation is useful when a borrower has a service-related disability. It shows that the applicant has a total disability because of the service, limiting his/her employment rating. Borrowers can also get a document from the Social Security Administration. In this case, they need to submit a copy of their notice of awards or Benefit Planning Query. The ease of this process is that the Department of Education works closely with the VA and the SSA. They regularly collect information about debtors with disabilities.