Perkins Loan Forgiveness: How Does it Work?
When you take out a loan, the expectation is that you'll pay back all the money you've borrowed (plus interest, of course). It usually takes pretty catastrophic circumstances for a federsl student loan to be canceled, like your school shutting down before you can get your degree.
The Perkins loan program is different, in a good way - it offers loan forgiveness/cancellation in a wide variety of other, happier circumstances. In an effort to encourage graduates to pursue certain public service careers, the loan program offers loan forgiveness, or cancellation, to borrowers in certain professions. If you have a Perkins loan and enter one of the fields I outline below, you could have up to 100% of your loan canceled. Read on to learn more about cancellation eligibility & the loan cancellation process!
How Does Perkins Loan Cancellation Work?
If you decide you'd like to work in public service after you graduate from college, you can apply to get your Perkins loans canceled at a specific rate on an annual basis. The exact public service jobs eligible for cancellation will be discussed in the next section. If you work at a particular job for a long enough period, you could get up to 100% of your loans cancelled.
The chart below outlines the annual rates of loan cancellation for almost all eligible borrowers; you'll notice that 5 years of working = 100% loan cancellation. You'll note in the next section, however, that not all professions qualify borrowers for 5 full years of loan cancellation rates. Annual cancellation rates for VISTA/Peace Corps volunteers are slightly different: 15% for the first and second years, and 20% for the third and fourth years, for a total of 70% maximum cancellation.