How To Get Perkins Loan Forgiveness – Forbes Advisor

Although the Perkins student loan program has ended, the Perkins loan forgiveness programs haven’t. If you have a Perkins loan, you may be eligible for forgiveness, or if you consolidate your loans, you may qualify for other federal forgiveness options.

The Federal Student Aid Data Center reported that 1.2 million people still have outstanding Perkins loans, owing a combined $3.7 million as of the end of March 2023. For these borrowers, loan relief is still available.

What Are Perkins Loans?

The Perkins loan program was designed for students with substantial financial need. These federal loans were subsidized, so the government covered the accrued interest while the borrower was in school.

The government discontinued the Perkins loan program in 2017; the last Perkins loans were issued in 2018.

Are Perkins Loans Eligible for Forgiveness?

Those with outstanding Perkins loans may be eligible for forgiveness or cancellation. There are three main programs specifically designed for Perkins borrowers:

Perkins Teacher Loan Cancellation

Under the Perkins loan cancellation program, eligible teachers can qualify for cancellation of up to 100% of their outstanding Perkins loans. To qualify, you must teach full-time in a public or nonprofit elementary or secondary school and meet one of the following requirements:

• You teach in a school serving students from low-income families
• You are a special education teacher
• You teach mathematics, science, foreign languages, bilingual education or in another field determined by your state to have a shortage of qualified teachers

A percentage of your Perkins loan balance is canceled for each year of service, and the cancellation amount also covers the interest accrued during each service year. Cumulatively, by your fifth year of service, 100% of your Perkins loan would be canceled.

• First year of service: 15% canceled
• Second year of service: 15% canceled
• Third year of service: 20% canceled
• Fourth year of service: 20% canceled
• Fifth year of service: 30% canceled

Other Employment and Volunteer Service Loan Forgiveness

Besides the Perkins loan cancellation program for teachers, there’s a loan forgiveness option for first responders, public service workers and some volunteers.

The loan forgiveness amount you’re eligible for and the required service length varies by profession or volunteer role. Still, only some individuals will qualify for 100% forgiveness of their outstanding Perkins loans.

Perkins Loan Discharge Under Specific Conditions

Under certain circumstances, you can qualify for a discharge of your Perkins loans. Up to 100% of your loans may be discharged in the following scenarios:

• You declared bankruptcy, and the court rules that requiring you to repay the loans would cause you an undue hardship
• Your college or university closed before you completed your program
• You become totally and permanently disabled
• The borrower passes away

How To Apply for Perkins Loan Forgiveness

To apply for Perkins loan forgiveness or cancellation, you must contact the college or university that issued the loan. In some cases, the school acts as the loan servicer or it may partner with a third-party loan servicer.

For example, Penn State University, New York University and the University of Mississippi collect payments on Perkins loans they issued. Other schools may contract servicers like UAS Connect, Educational Computer Systems, Inc. (ECSI) or the New Mexico Educational Assistance Foundation to collect payments.

The school or the loan servicer can tell you which forms and documents you need to submit for the type of forgiveness you’re pursuing.

Other Forgiveness Programs for Perkins Loan Borrowers

Borrowers that aren’t eligible for Perkins loan forgiveness or cancellation programs may qualify for loan forgiveness through two other federal loan forgiveness programs:

Income-Driven Repayment Discharge

Income-driven repayment (IDR) plans base your payments on a percentage of your discretionary income with a different loan term than the original term. The remainder is forgiven if you still have a balance at the end of the IDR loan term.

Perkins loans aren’t eligible for IDR plans. But if you consolidate your debt with a direct consolidation loan, you’ll get access to other payment plans, including IDR plans. Once the loan is consolidated, you can enroll in an IDR plan and begin working toward forgiveness.

Public Service Loan Forgiveness

Under the Public Service Loan Forgiveness rules, federal loan borrowers may qualify for loan forgiveness if employed full-time by a nonprofit organization or government office for 10 years or more and make 120 qualifying monthly payments under an IDR plan.

As with IDR plans, Perkins loans aren’t eligible for PSLF. But if you consolidate with a direct consolidation loan, you can become eligible for PSLF. If you enroll in an IDR plan, you can work toward meeting the requirements for PSLF and qualify for loan forgiveness of up to 100% of your remaining balance.

However, keep in mind that consolidating your loans to pursue PSLF will cause you to lose eligibility for Perkins loan cancellation, so make sure you aren’t eligible for that forgiveness option first.