Grace Period: Repayment of your student loan does not begin until nine (9) months after you have ceased being at least a half-time student (6 credits or less). During this grace period, you are not required to make payment and interest will not accrue on your loan.
Deferments: You may apply for a deferment for the following reasons:
- Student Deferment: A borrower is eligible for a deferment if they are enrolled as a full or half-time (6 credit or more) student at an accredited institution of higher learning in the United States, or at a comparable institution outside the United States. A deferment form must be completed at the beginning of each term.
- Fellowships: A borrower is eligible for a deferment if they are enrolled and attending an approved graduate fellowship program excluding a medical internship or residency program.
- Unemployment: A borrower is eligible for a deferment if they are seeking and unable to find full-time employment, but not in excess of three years.
- Military: A borrower may be eligible for a deferment if they are a member of the U.S. Army, Navy, Air Force, Marines, Coast Guard or a member of the National Guard or the Reserves serving a period of full-time active duty in the armed forces.
- Economic Hardship: A borrower is eligible for a deferment if they are suffering from an economic hardship, but not in excess of three years. A borrower may qualify for an economic hardship if they provide the school with documentation showing that they have been granted an economic hardship deferment under the William D. Ford Federal Direct Loan Program or Federal Family Education Loan Program for the period of time for which they are requesting an economic hardship for their Federal Perkins Loan. If the borrower is a volunteer in the Peace Corps, they are eligible for an economic hardship deferment for their full term service; however, the deferment may not exceed three years or the remaining period of the borrower’s economic hardship eligibility.
Cancellations: You may be eligible for cancellation benefits. Borrowers must make a properly documented written request. For each completed year of service, a portion of the loan will be canceled at the following rates: 15% of the original principal loan amount for each of the first and second years; 20% of the original principal loan amount for each of the third and fourth years; and 30% of the original principal loan amount for the fifth year. The qualifying services for cancellation are:
- Teaching: If you are a full time teacher in a public or other nonprofit elementary or secondary school, designated by the Secretary in accordance with the provisions of section 465(a)(2) of the Act as a school with high concentration of students from low-income families. An official directory of designated low-income schools is published annually by the Secretary. – A full time special education teacher in a public or nonprofit elementary or secondary school system. – A full time teacher, in a public or other nonprofit elementary or secondary school system, who teaches mathematics, science, foreign languages, bilingual education, or any other field of expertise that is determined by the State Department of Education to have a shortage of qualified teachers in that State.
- Early Intervention Services: If you are a full time qualified professional provider of early intervention services in a public or other nonprofit program under supervision by a lead agency as authorized by section 632(5) of the Individuals with Disabilities Education Act. Early intervention services are provided to infants and toddlers with disabilities.
- Law Enforcement or Corrections Officer: If you are a full time law enforcement officer for an eligible local, State, or Federal law enforcement agency; or a full time corrections officer for an eligible local, State, or Federal corrections agency.
- Nurse or Medical Technician: If you are a full time nurse providing health care services; or a full time medical technician providing health care services.
- Child or Family Service Agency: If you are a full time employee of an eligible public or private non-profit child or family service agency who is providing or supervising the provision of services to high-risk children who are from low-income communities and the families of such children.
Head Start Cancellation: Upon making a properly documented written request to the School, you may be entitled to have up to 100% of the original principal loan amount canceled for qualifying service performed after you receive the loan as: a full time staff member in the educational component of a Head Start program which is operated for a period comparable to a full school year and which pays a salary comparable to an employee of a local educational agency, you may qualify for a Head Start cancellation. For each completed year of service under the Head Start Cancellation provision, the loan will be canceled at the rate of 15% of the original loan amount.
Military Service Cancellation: A school must cancel up to 100% of the outstanding balance of a Perkins loan for a full year of active duty service in the U.S. armed forces in an area of hostilities or an area of imminent danger that qualifies for special pay. The “U.S. armed forces” are the United States Army, Navy, Air Force, Marine Corps, or Coast Guard.
The borrower’s commanding officer must certify the borrower’s service dates. Active duty service for less than a complete year or a fraction of a year beyond a complete year does not qualify. A complete year of service is 12 consecutive months.
Areas that qualify for hostile fire/imminent danger pay are listed on the Web. Note that the borrower does not have to serve the full 12 months of active duty service in such an area to qualify for the cancellation. If a borrower is on active duty in such an area for any part of a month, that month counts towards the borrower’s eligibility for a military cancellation.
The cancellation rate is the standard progression for up to 100% cancellation: 15% for the first and second year of qualifying service, 20% for the third and fourth year of qualifying service, and 30% for the fifth year of qualifying service.
Volunteer Service Cancellation: Upon making a properly documented written request to the School, you may be entitled to have up to 70% of the original principal loan amount of the loan canceled for qualifying service performed after you receive the loan as: a volunteer under the Peace Corps Act; a volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs). For each completed year of service under the Volunteer Service Cancellation provision, a portion of the loan will be canceled at the following rates: 15% of the original principal loan amount for each of the first and second 12 month periods of service; and 20% of the original principal loan amount for each of the third and fourth 12 month periods of service.
Discharges: Your obligation to repay this loan may be partially or totally discharged for the following reasons:
- Death: In the event of your death, the School will discharge the total amount owed on this loan
- Total and Permanent Disability: If you become totally and permanently disabled after you receive the loan, the School will discharge the total amount owed on the loan. If your disability discharge claim is approved by the School on or after July 1, 2002, the loan will be assigned to the United States Department of Education, which will discharge the total amount owed on the loan if it determines that you are eligible for a total and permanent disability discharge.
- School Closure: Under certain conditions, your total liability will be discharged, including refunding any amounts you already paid on the loan, if you were unable to complete the program in which you were enrolled because the school closed.
- Bankruptcy: Under certain conditions, your loan may be discharged in bankruptcy. In order to discharge the loan in bankruptcy, you must prove undue hardship in an adversary proceeding before the bankruptcy court.
Student Loan Ombudsman: If you dispute the terms of your Federal Perkins Loan in writing to your school, and your school and you are unable to resolve the dispute, you may seek the assistance of the Department of Education’s Student Loan Ombudsman. The Student Loan Ombudsman will review and attempt to informally resolve the dispute.