How To Get Perkins Loans Forgiven or Discharged

Perkins Loans are low-interest federal subsidized loans that were made to students with exceptional financial need until the program was discontinued in 2017. According to the U.S. Department of Education, 1.2 million borrowers owe $3.7 billion in Perkins Loans as of June 2023. That’s less than 1% of the total federal student debt owed, but for Perkins Loan borrowers, this amount is significant. 

Who Qualifies for Perkins Loan Forgiveness?

Most Perkins Loan forgiveness is based on occupation and the number of years worked. To qualify, you must work in the public sector. If your school closes, you become disabled, or you file for bankruptcy, you may also qualify to have your Perkins Loan discharged. 

To remain eligible for Perkins Loans cancellation, don’t consolidate your Perkins Loan with other federal loans. Doing so will prohibit you from taking advantage of the federal Perkins Loan cancellation programs. The Federal Student Aid website StudentAid.gov has helpful information on the Perkins Loan program, but your school is probably your best resource for getting specific information on your eligibility for forgiveness.

Teaching Positions That Qualify for Perkins Loan Forgiveness

Many Perkins Loan forgiveness recipients are teachers or educational personnel. You may qualify based on the type of school you work at, the kinds of students you work with, or the subject matter you teach. 

Here are some examples of positions that qualify you for loan forgiveness:

• Full-time public or nonprofit elementary or secondary school teachers serving students from low-income families

• Special education teachers who work with infants, toddlers, children, or youth with disabilities

• Math, science, foreign language, or bilingual education teachers

• Teachers working in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state

• Faculty members at a tribal college or university

• Speech pathologists who have a master’s degree and work in a Title I-eligible elementary or secondary school

• Librarians with a master’s degree who work in a Title I-eligible elementary or secondary school or in a public library

Other Positions That Qualify for Perkins Loan Forgiveness

If you’re a Perkins Loan borrower and you work as one of the following public service professionals, you may also qualify for forgiveness:

• Nurses and medical technicians

• Firefighters

• Qualified professional providers of early intervention services

• Law enforcement or corrections officers

• Attorney employed in a federal public or community defender organization.

• Employee of a public or private nonprofit child- or family-services agency providing services to high-risk children and their families from low-income communities.

• Head Start staff member who works in the education component of the program

• Pre-K or childcare program staff member who works in an education component of the program (program must be licensed or regulated by a state agency)

• Members of the U.S. Armed Forces in a hostile fire or imminent danger pay area performing military service

• Volunteer service positions, such as AmeriCorps VISTA or Peace Corps 

How Does Perkins Loan Forgiveness Work?

If you work in a qualifying occupation, you may be eligible to have up to 100% of your Perkins Loans forgiven. The Perkins Loan forgiveness program works quite differently than Public Service Loan Forgiveness or other types of student loan forgiveness programs. 

To participate in Perkins Loan forgiveness, you’ll need to contact the school that issued your loan, since they are your loan servicer. You can put your loan in deferment while you’re teaching in a qualified position, meaning you won’t have to make a monthly payment.

Also, with Perkins Loan forgiveness, a certain percentage of your loans is canceled (forgiven) for each year of full-time service, up to five years*. 

• For the first and second years of service, 15% of your Perkins Loans can be canceled each year. 

• For your third and fourth years, 20% of your Perkins loans can be canceled each year. 

• For your fifth year, 30% of your Perkins Loans can be canceled. 

*Five years is the most common timeline, but some recipients will have a longer timeline, depending on their occupation.

Perkins Loan Forgiveness by Position and Time Required for Full Cancelation

There are many other public service jobs that may qualify you for the cancellation of your Perkins Loans. The table below is a list, along with the potential cancellation percentage and time required.

What’s Better: Perkins Loan Forgiveness or Public Student Loan Forgiveness?

If you qualify for Perkins Loan forgiveness, you may also be eligible for Public Service Loan Forgiveness (PSLF). You can’t take advantage of both programs at the same time, so you’ll need to decide which is more advantageous for you. 

Many borrowers find that the Perkins Loan forgiveness program allows them to get student loan forgiveness faster. Most Perkins Loan borrowers only have to work for five years in a qualifying job to get 100% of their Perkins Loans forgiven. By contrast, you’ll need to work 10 years and make 120 payments to get forgiveness under PSLF. You must also be enrolled in an income-driven repayment plan and verify your eligibility over the 10-year period.

Another advantage of Perkins Loan forgiveness is that you get a portion of your loan balance forgiven each year you work. With PSLF, you have to make student loan payments with no forgiveness until you meet the program's 10-year repayment requirement.

What Is a Perkins Loan Discharge?

Perkins loan discharge is different from forgiveness. Both can wipe out your loan balance, but each does so via a different route. Forgiveness is related to work and occupation, while discharge is related to certain life or school events.

You may qualify to have your federal Perkins Loans discharged if you file bankruptcy, the school you attended closed, or you became disabled. If the primary Perkins Loan borrower dies, their student loan debt will also be discharged.

Is Bankruptcy Right for You?

If you don’t qualify for Perkins Loan forgiveness, have tried other student loan repayment programs, and it feels like nothing is working while your debt keeps growing, you may want to look into filing bankruptcy.

To have your student loan debt erased in bankruptcy, you’ll need to take the extra step of filing an adversary proceeding to prove how your student loan debt is causing undue hardship. You may hear this referred to as the Brunner test.

Here are the three main things you’ll need to prove:

• Based on your current income, you can't maintain a minimal standard of living for you and your dependents while repaying your student loans, and 

• Your financial situation isn't likely to improve for a significant portion of the loan repayment period, and 

• You have made a good faith effort to repay your student loans. 

We know this sounds complicated, but discharging federal student loans in bankruptcy got easier in late 2022 when the Department of Justice released new guidance for bankruptcy courts on understanding the undue hardship standard. If you’re considering filing bankruptcy on your student loans, Upsolve may be able to help. Take our free, five-minute screener to see if you qualify.

Let's Summarize...

You may be able to have your Perkins Loan completely given in as little as five years if you work in a qualifying public sector job. If you don’t work in a qualifying profession, you can still discharge your Perkins Loan if you are permanently disabled or if your school closes before you complete your course of study. In some cases, your Perkins Loans can be discharged in bankruptcy.