Perkins Loan Cancellation Estimator
Cancellation Projection
| Year | % Cancelled | Amount | Status |
|---|
What Is a Perkins Loan?
The Federal Perkins Loan Program was a low-interest federal student loan for students with financial need. The program ended in 2018, so no new loans are issued. However, many borrowers still have active Perkins Loans.
One key benefit makes Perkins Loans different from other federal loans:
They offer structured cancellation based on public service.
Even better, cancellation includes interest accrued during the year of qualifying service, not just principal.
What Is Perkins Loan Cancellation?
Perkins Loan cancellation is not the same as Public Service Loan Forgiveness (PSLF). Instead of waiting 10 years for full forgiveness, Perkins loans follow a year-by-year cancellation schedule.
If you work in an eligible public service role, a percentage of your original loan balance is cancelled after each full year of service.
Eligible professions include:
- Teachers (especially in low-income schools or shortage areas)
- Nurses and medical technicians
- Law enforcement officers
- Firefighters
- Military service members
- Peace Corps volunteers
- AmeriCorps VISTA members
Your profession determines which cancellation track applies to you.
How the Perkins Loan Cancellation Schedule Works
The calculator uses two possible schedules based on your profession.
1. Standard 100% Cancellation Track
This applies to most eligible professions such as teachers, nurses, police, firefighters, and military.
Cancellation Schedule:
| Year of Service | Percentage Cancelled |
|---|---|
| Year 1 | 15% |
| Year 2 | 15% |
| Year 3 | 20% |
| Year 4 | 20% |
| Year 5 | 30% |
| Total | 100% |
After five full consecutive years, your entire eligible balance can be cancelled.
2. 70% Cancellation Track (Peace Corps & VISTA)
This applies to service through programs like:
- Peace Corps
- AmeriCorps VISTA
Cancellation Schedule:
| Year of Service | Percentage Cancelled |
|---|---|
| Year 1 | 15% |
| Year 2 | 15% |
| Year 3 | 20% |
| Year 4 | 20% |
| Total | 70% |
This track caps at 70%, meaning a portion of the loan remains.
How the Perkins Loan Cancellation Calculator Works
The calculator uses a simple formula based on:
Cancelled Amount = Original Balance × Cancellation Percentage
It adds up the percentages for each completed full year of service.
Inputs Required
- Loan Balance at Start of Service
Your principal balance when you began qualifying employment. - Full Years of Service Completed
Must be full and consecutive academic or calendar years. - Eligible Profession Track
- Standard (100%)
- VISTA/Peace Corps (70%)
Example Calculation
Let’s say:
- Loan balance: $10,000
- Profession: Teacher (Standard track)
- Years completed: 3
Cancellation would be:
- Year 1: 15% = $1,500
- Year 2: 15% = $1,500
- Year 3: 20% = $2,000
Total cancelled: $5,000
Remaining balance: $5,000
The calculator also shows:
- Total percentage cancelled
- Remaining principal
- A detailed year-by-year schedule
- Your next milestone year
This helps you see how close you are to full cancellation.
Important Rules to Remember
1. Service must be consecutive
If you break service, the schedule may reset.
2. You must apply each year
Cancellation is not automatic. You must submit paperwork annually.
3. Apply through your school
Perkins Loans are administered by the school that issued them or its servicer.
4. Interest benefit
Unlike many other programs, Perkins cancellation includes interest accrued during each year of service.
Why a Perkins Loan Cancellation Calculator Is Useful
Many borrowers do not realize how structured the cancellation schedule is. A calculator helps you:
- Estimate how much you’ve already earned in cancellation
- Plan how many more years you need
- Understand the value of staying in qualifying service
- Compare remaining balance scenarios
It turns a confusing government schedule into clear numbers.
Common Questions
Is Perkins cancellation taxable?
Historically, Perkins Loan cancellation for qualifying service has not been treated as taxable income, but tax rules can change. Always confirm with a tax professional.
Can I combine this with PSLF?
Perkins Loans are separate. If consolidated into a Direct Loan, you may lose Perkins cancellation benefits. Consider your options carefully before consolidating.
What if I’ve already made payments?
Cancellation is based on your eligible balance at the start of service. Payments may reduce what can be cancelled.