Teacher Cancellation

Schools may cancel up to 100% of a Federal Perkins Loan if the borrower has served full time in a public or nonprofit elementary or secondary school system as a:

  • teacher in a school serving students from low-income families (see below)
  • special-education teacher, including teacher of infants, toddlers, children, or youth with disabilities; or
  • teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.

Eligibility for teacher cancellation is based on the duties presented in an official position description, not on the position title. To receive a cancellation, the borrower must be directly employed by the school system. There is no provision for canceling Perkins Loans for teaching in postsecondary schools.

The cancellation rate for each completed year of service is as follows:

  • 15% of the original principal loan amount plus accrued interest for the first and second years of service.
  • 20% of the original principal loan amount plus accrued interest for the third and fourth years of service.
  • 30% of the original principal loan amount plus accrued interest for the fifth year of service.

Maximum Amount Canceled – Up to 100%

Teaching in a Low-Income School

Cancellation for teaching in a school serving students from low-income families may be granted only if the borrower taught in an eligible school that is listed in the Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. The Department compiles and publishes this directory of low-income schools annually after consulting with each state’s educational agency. For the online directory, follow this link to the Department of Education.

Subsequent Year Provision: If you receive partial cancellation one year for service in a school which is listed in the Directory, but the next year this same school is not listed, you are still eligible to receive partial cancellation for teaching at this same school based on your prior year qualification.

All elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) are considered to qualify as schools serving low-income families for the purpose of teacher cancellations. Elementary and secondary schools operated on reservations by Indian tribal groups under contract with the BIA are also considered to qualify for this purpose.

Download Request for Cancellation