Federal Perkins Loan Cancellation: A detailed review

Federal Perkins Loans were discontinued by the government. Learn all the facts related to Federal Perkins Loans, the eligibility requirement for its cancellation and Perkins loan discharge

Updated by Chinmoy Dutta on 17th July 2020

Student loan cancellation sounds too good to be true but if you are a Federal Perkins Loan holder, you might get your whole loan canceled or discharged. The Federal Perkins Loan used to be an attractive option for undergraduate and graduate students who were in exceptional financial need to pay for their school tuition. But the Federal Perkins Loan was discontinued from September 30, 2017. The total amount of the subsidized loan that borrowers could take out as an undergraduate was $27,500 and as a graduate, they could get an additional $32,500. Unlike other Federal Loans, Perkin loans always carry a 5% interest rate and do not have fees.

Federal Student Loan cancellation is a very limited option but it is the most complete way to deal with student loan debt. Student loan cancellation is available for both federal and private loans.

One more thing to keep in mind for the Federal Perkins Loan cancellation is that it is not for everyone because not all of them are eligible for forgiveness. The important facts to keep in mind are:

  • The loan must have been taken before the program expired on September 30, 2017

  • The request for forgiveness must be submitted to your school or your school’s servicer

  • The repayment of Perkins loan must continue until your request is processed

Table of contents

Why did the Federal Perkins Loan program expire?

It was due to budgetary issues that the Federal government started to phase out the Perkins Loan in 2015. However, it was later extended until 2017 so that a better and permanent solution would be created. Those who were in favor of letting the Perkins loan program expire were hoping to simplify and centralize federal student loans while those in favor of keeping it wanted to preserve low-cost options for neediest borrowers. Finally, Congress failed to renew the Perkins Loan program in its official demise on September 30, 2017. The final loan disbursements were allowed through June 30, 2018. Federal Student Loans Guide helps you understand the various key factors before you make any decision regarding your student loans. The application process and eligibility criteria can save a good deal of your time. Knowing the types of suitable loan can help you take advantage of the relief program each offers you in times of crisis. Choosing the right repayment options will help you make an informed decision to manage your expenses in the future.  

Eligibility Criteria for Federal Perkins Loan cancellation

The major eligibility requirements to get your Federal Perkins Loan canceled or discharged is you must work full time in an eligible public service role. Occupations that are eligible are listed below:

  • Teachers (includes special education teachers, librarians, school counselors). A teacher is anyone who provides students direct services related to classroom teaching

  • An employee at a child or family services agency

  • Early childhood education provider

  • A faculty member at tribal college or university

  • Law enforcement officer

  • Firefighter

  • Nurse

  • Military service of any kind

  • Public defender

  • Speech pathologist

  • Volunteer service at the Peace Corps

The Federal Perkins Loan might also be canceled due to circumstances such as:

  • Bankruptcy, if the bankruptcy court rules repayment of the loan would cause hardship to the borrower

  • School closure, i.e. if your school got closed before you could complete your degree

  • Total and permanent disability

  • Death

Amount of Perkins Loan that can be canceled

The amount of the loan that can be canceled is determined by the type of public service job you have. In most cases, borrowers are eligible for a 100% cancellation of Perkins Loan. The tabulated data shown below summarises the Perkin Loan cancellation percentage


Amount eligible for cancellation

• Teacher

• Nurse

• Early Intervention services provider

• Child or Family services agency employee

• Law enforcement or corrections officer

Up to 100% for five years of service

Occupations listed must have provided service after August 14, 2008, to be eligible:

• Firefighter

• A faculty member at a tribal college or university

• Speech Pathologist with Master's degree working at Title 1 school

• Librarian with a Master's degree working at a Title 1 school

• Attorney who is a federal, public or community defender

• Military service in US Armed Forces in a hostile fire or imminent danger

Up to 100% for five years of service

• Military service in US Armed Forces in a hostile fire or imminent danger whose active duty was before August 14, 2008

Up to 50% for four years (@ 12.5% p.a.) of eligible service for borrowers whose active duty ended before August 14, 2008

• Peace Corps volunteers

Up to 70% for four years of service at a rate of 15% for the first and the second year and 20% for third and fourth years

Worried about your College Tuition? Find the best student loans suited for you.

Getting a Perkins Loan forgiven

Perkins loan forgiveness is applicable through your school as the loan was distributed by the college. You can call the Financial aid office directly to ask for the Perkins Loan cancellation application.

After receiving approval for Perkins Loan cancellation

Perkins Loan forgiveness happens incrementally over a period of time. Most cancellation periods are of 5 years, which can be broken down as follows:

  • 15% of the original principal loan amount is canceled for each of the first and the second year

  • 20%  of the original principal loan amount for each of the third and fourth years

  • 30%  of the original principal loan amount for the fifth year

Each amount is inclusive of the interest that gets accrued during that period. Each year you need to file your annual cancellation paperwork just as you did when you first applied.

Getting Perkins Loan discharged

Just like Perkins loan forgiveness, Perkins Loan’s discharge is also applicable through your school. Discharge takes place under the following situations:

  • Bankruptcy

  • School closure

  • Death

  • Permanent Disability

Under these conditions, the amount of loan discharged is 100%.


Since the Federal Perkins Loan has expired, there are other funding options for students who demonstrated the financial need. They can fill out the FAFSA (Free Application for Federal Student Aid) to know which student loan programs they can qualify for.

Additional student loans, if you have any, apart from the Perkins Loan cannot be canceled. It is advised to consolidate other student loans into a single loan that has a better interest rate for the repayment period. Federal Student loan servicers provide other benefits such as Student Loan forgiveness under the Public Service Loan Forgiveness (PSLF) program which one can seek after. Student loan forgiveness is different from student loan cancellation and should be understood clearly.