The Federal Government will cancel your student loan under certain circumstances. This process is called loan forgiveness and to qualify for the loan forgiveness or loan cancellation you must meet certain set criteria. In short you must do one of the following
- Perform volunteer or military service
- Be a full time Teacher to a certain type of audience
- Practice medicine or
- Meet other criteria as specified by the loan program.
The Federal Government tries to balance the loan programs it runs with many benefits and loan cancellation options are one that make a federal student loans very attractive. So if you are filling out a Perkins loan application, bear this in mind. Since the Perkins Loan is a federal governmet funded loan, it comes with the same opportunites to cancel. One of the main advantages of the Perkins Loan is the wide range of opportunities that are available for the cancellation of the Perkins Loan.
Here are all the possible options yo have to cancel your Perkins Loan
Become a full time teacher
You are permitted to cancel a portion of, or the entire loan for services of teaching if you become an eligible teacher. This type of cancellation was introduced under The National Defense Education Act. This program lets you deduct 15% of your loan for the first and second year of teaching service. This percentage is then increased to 20% for the third and fourth and finally the remaining 30% of you loan is forgiven during your fifth year of teaching service.
Head start cancellation of the Perkins Loan
This type of cancellation is considered when the school you are enrolled in, closes unexpectedly. This may also be when you are in an approved leave of absence during the academic year.
Loan cancellation due to military services
You are entitled to partial cancellations (up to 50%) if you are serving for the U.S. Army in an area designated as a hostile area or in an area of imminent danger. Serve in the Army National Gaurd and receive $10000 towards your student loan repayment.
Volunteer service loan cancellation program
You can cancel your loan partially (up to 70 %) if you are serving under the Peace Corps service. 15% of your student loan is forgiven for each year of service upto a maximum of 70% of the total loan amount. Serve 12 months in the Americorps and get $7400 in stipends and $4725 towards your loan cancellation. Finally volunteer with VISTA (Volunteers in Service to America) and receive $4725 for 1700 hours of service.
Cancellation due to Total and Permanent Disability
In this case your loan will be cancelled in full only if you become disabled completely, after receiving the loan. Permanent and Total disability is the incapability to work and earn money or to attend school due to an impairment that is expected to continue with no definite end or to result ultimately in bereavement.
Cancellation due to Death
A loan is also subjected to cancel in full, in case of death, without burdening your heirs to repay the loan debt.
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