Teacher Cancellation Benefits
Under the Federal Perkins Student Loan Program, borrowers
performing teaching services might be eligible for cancellation
credit that might be applied toward payments of Loan Principal
and Accrued Interest.
A teacher is defined as one who is a Professional Employee
of a school or school system working on a Full-Time Basis and
is devoted to providing classroom instruction or related
services in Support Of The Educational Program.
Cancellation benefits are offered for Teaching Service
performed with Handicapped Students. The teaching service must
be performed in classes where the majority of the students are
handicapped and must be in an institution providing Elementary
or Secondary Education as determined by state law. Cancellation
benefits are offered to those Teachers Or Staff Members serving
in public or non-profit private elementary or secondary schools
having High Concentrations Of Students From Low-Income
To be eligible for cancellation benefits, however, the
school in which teaching service is performed must be included
in the listing of schools having High concentrations of
Students From Low-Income Families, which is published in the
Federal Register. (The Federal Register is a document compiled
each year by the federal government from Lists Submitted By The
Individual States, of schools designated by those states to
have a high concentration of students from low-income families.
Each state, however, is given a quota of schools to be listed
and not all schools having high concentrations of students from
low-income families will be listed. Only those schools listed
in the federal register can or will be considered for special
Service performed as detailed above qualifies the borrower
15% cancellation of funds disbursed for each of the first
two years of teaching service.
20% cancellation of funds disbursed for both the third and
fourth years of teaching service.
30% cancellation of funds disbursed for the fifth year of
Up to 100% of the Student Loan Funds disbursed can be
cancelled under this provision.
Service performed as a full-time staff member in a
pre-school program carried under section 222(a)(1) of the
Economic Opportunity Act of 1964 as amended that is operated
for a period that is comparable to a full school year also
qualifies for benefits. Employment must be in a full-time
professional capacity to complete the educational part of the
program; the salary must not exceed the salary of a comparable
employee of the local education agency. Such service is
eligible for cancellation at the rate of 15% of the eligible
funds for each year of service.