How to Get a Perkins Loan Forgiveness

The Federal Perkins Student Loan Program is no longer active for new applicants, but if you have had old Perkins loans since your college days, you may be eligible for Perkins loan forgiveness. The option is available for borrowers who work in the civil service.

If you have Perkins student loans and think you might qualify for a rebate, here’s what you need to know.

What is a Federal Perkins Loan and how does Perkins Loan Forgiveness work?

Perkins Student Loans were low-interest student loans that schools could distribute to undergraduate and graduate students who were in financial need. Undergraduate students could borrow up to $27,500 and graduate students could borrow up to $32,500. The Perkins loan program ended on September 30, 2017, with final disbursements continuing through June 30, 2018.

Although no new Perkins loans are issued, student borrowers who still have Perkins student loans may be eligible to have up to 100% of their debt forgiven if they meet certain criteria. The amount of discount you are entitled to and the cancellation rate depend on your career choice and length of employment, but all eligible occupations fall within the civil service sector.

With few exceptions, forgiveness generally occurs over a five-year period in increments, rather than all at once. Here is the calendar of the most eligible jobs:

  • 15% of the original loan amount for each of the first and second years.
  • 20% of the original loan amount for each of the third and fourth years.
  • 30% of the original loan amount for the fifth year.

Note that Perkins loan forgiveness is not taxable, so you don’t have to worry about a large tax bill for the year in which you receive forgiveness.

Who is eligible for Perkins loan forgiveness?

Perkins Loan Forgiveness is available to borrowers who have taken out loans under the program and who work in one of the following areas of public service:

  • Teacher.
  • Nurse or medical technician.
  • Firefighter.
  • Qualified professional provider of early intervention services.
  • A member of the faculty of a tribal college or university.
  • Speech-language pathologist with a master’s degree working in a Title I eligible elementary or secondary school.
  • Librarian with a master’s degree working in a Title I eligible elementary or secondary school or in a public library.
  • Law enforcement officer or prison officer.
  • Lawyer employed in a federal public defense or community organization.
  • Employee of a public or private not-for-profit child or family services agency providing services to high-risk children and their families from low-income communities.
  • Staff member of the education component of a Head Start program.
  • A staff member of the education component of a state-licensed or regulated pre-kindergarten or child care program.
  • A member of the military service in the United States Armed Forces in an area of ​​hostile fire or imminent danger.
  • AmeriCorps VISTA or Peace Corps volunteer.

How to Apply for Perkins Loan Forgiveness

Because the Perkins student loan program is school-based, if you believe you may be eligible for Perkins loan forgiveness, you will need to contact the school that originally issued the loan or the student loan service that administers your college loan account.

Your school or student loan officer will have the forms required for your particular type of cancellation and can answer any questions you have about the process. You will need to provide proof that you have held qualifying employment during the period for which you are applying. Also keep in mind that most forms of Perkins loan forgiveness require full-time work, so you may not be eligible if you work part-time.

What to do if you don’t qualify for Perkins loan forgiveness

If you are not eligible for Perkins loan forgiveness because you do not meet the employment requirements, there are alternatives you can pursue.

To start, ask yourself if you might possibly qualify for a pardon based on your career path. For example, if you worked part-time at a qualifying job and are planning to switch to full-time, you might be able to start the clock on forgiving the Perkins loan, and it will make sense to keep your debt there. where is she.

If releasing the Perkins loan is out of the question, here are some potential options to consider:

  • Consolidate your credits: Perkins loans are not eligible for Public Service Loan Forgiveness (PSLF) or income-based repayment plans. But if you consolidate your loans through the direct consolidation loan program, you will be eligible for both. If you think you might qualify for PSLF or need a more affordable monthly payment, consolidation may do the trick.
  • Refinance your student loans: If you’re looking for ways to make your loan more affordable, it might be worth refinancing your student loans. Some private lenders may be able to offer you an interest rate below the standard rate of 5% on Perkins loans. Additionally, private refinance lenders may offer more flexible repayment options, giving you between five and 25 years to repay in some cases, which can give you more control over your repayment plan.

As you consider each of these options, think about your current financial situation and your goals with your Perkins loan debt. Keep in mind that to refinance your loans, you will generally need a high credit score and annual income, or at least have a co-signer who has these attributes.

But before you think about consolidating or refinancing your Perkins loans, both of which will exclude future Perkins loan forgiveness, do your due diligence with the federal programs available to you. Refinancing will cut you off from forgiving the Perkins loan entirely, even if you eventually meet the terms of employment.

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