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Ben Luthi is a personal finance and travel writer who loves helping people learn how to live life more fully. His work has appeared in several publications, including U.S. News & World Report, USA Today, Yahoo! Finance and more.
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Aylea Wilkins
Aylea Wilkins has been at Bankrate since 2019, editing content in student, personal and home equity loans and auto, home and life insurance before taking on editing content in a variety of other categories. She has nearly a decade of editorial experience with a primary focus on helping people confidently make financial and purchasing decisions by providing clear and unbiased information.
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Before it ended in 2017, the Federal Perkins Loan Program offered low-interest student loans to undergraduate and graduate students with financial need. While it no longer accepts new applications, some borrowers still have outstanding loan balances from this program.
If you received a Perkins Loan, you might be eligible to have it forgiven – as long as you work in certain public service fields, such as education or law enforcement, and apply for forgiveness through your school or student loan servicer.
While no new Perkins Loans are being made, borrowers who still have these loans may qualify to get up to 100 percent of their debt forgiven if they meet certain criteria. The amount of forgiveness you qualify for and the rate at which cancellation occurs depends on your career choice and how long you stay in that job, but all qualifying occupations fall in the public service sector.
With some exceptions, forgiveness generally occurs over five years in increments rather than all at once. Here’s the schedule for most eligible jobs:
Note that Perkins Loan cancellation is not taxable, so you don’t have to worry about a significant tax bill for the year you receive forgiveness.
Perkins Loan cancellation is available for borrowers who took out loans in the program and work in one of the following public service fields:
Because the Perkins student loan program is school-based, if you believe you’re eligible for Perkins Loan cancellation, you’ll need to contact the school that made the loan originally or the student loan servicer that handles your loan account for the college.
Your school or student loan servicer will have the forms required for your particular type of cancellation and can answer any questions you may have about the process. You’ll need to provide proof that you’ve worked in a qualifying job during the period for which you’re applying. Also, keep in mind that most forms of Perkins Loan forgiveness require full-time work, so you may be ineligible if you’ve been working on a part-time basis.
If you’re not eligible for Perkins Loan cancellation because you don’t meet the employment requirements, there are some alternatives you can pursue.
For starters, think about whether you could eventually qualify for forgiveness based on your career path. For example, if you’ve been working part time in an eligible job and plan to switch to full time, you may be able to start the clock on Perkins Loan forgiveness, and it’ll make sense to keep your debt where it is.
If Perkins Loan discharge is out of the question, here are some potential options to consider pursuing:
As you consider each of these options, think about your current financial situation and your goals with your Perkins Loan debt. To refinance your loans, you’ll generally need a high credit score and annual income or at least have a co-signer who has these attributes.
But before you consider consolidating or refinancing your Perkins Loans, both of which will rule out future Perkins Loan forgiveness, do your due diligence with the federal programs available. Refinancing will cut you off from Perkins Loan cancellation entirely, even if you eventually meet the employment requirements.
For over half a century, the Federal Perkins Loan Program provided financial aid to college students with exceptional needs. If you have an outstanding balance on one of these loans and work in the public service sector, you may qualify for Perkins Loan forgiveness. To confirm your eligibility or apply for forgiveness, contact your school or loan servicer.
Ben Luthi is a personal finance and travel writer who loves helping people learn how to live life more fully. His work has appeared in several publications, including U.S. News & World Report, USA Today, Yahoo! Finance and more.
Aylea Wilkins has been at Bankrate since 2019, editing content in student, personal and home equity loans and auto, home and life insurance before taking on editing content in a variety of other categories. She has nearly a decade of editorial experience with a primary focus on helping people confidently make financial and purchasing decisions by providing clear and unbiased information.
