Perkins Student Loan Cancellation

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  • Perkins Student Loan Cancellation
Author: Joseph Reinke, CFA

Many of the individuals who have received help from FitBUX with their student loan repayment plan have been shocked to find out they qualify to have their Perkins Student Loans forgiven. That is right! If you work in certain fields you never have to make a payment on them. This article provides details on how to have your Perkins Student Loans forgiven.

What is Cancellation?

Cancellation means that you won’t need to repay a portion or all of the principal plus accrued interest if you are engaged in a qualifying service. Unlike forgiveness via an Income Driven Repayment (IDR) plan, the amount forgiven is not treated as taxable income.


  • Perkins Loan cancellation is available to Nurses, Medical Technicians, Physician Assistants, Occupational Therapists, and Physical Therapists, among others, who practice in their chosen field of study.
  • To be eligible, you must be employed in a qualified occupational setting and work full time.
  • In addition, you must be certified, registered, or licensed by the state agency within the state where you provide this service.
  • you must work full-time for 12 consecutive months before any cancellation is provided and the loan must be in repayment.

Notes: Perkins loans that are consolidated are not eligible. Also, no payments made during a period for which a borrower qualified for a cancellation may be refunded unless the borrower made the payment because of an institutional error.

Cancellation Schedule

A certain percentage of the original principal loan amount plus accrued interest is forgiven following a year of full-time employment while providing a qualifying service. If you continue in eligible employment and file all forms, your loan will be canceled in full at the end of the five years as follows:

1st Yr15%
2nd Yr15%
3rd Yr20%
4th Yr20%
5th Yr30%

Timeline and process

To apply for cancellation of your loan you must submit a “Request for Cancellation Benefit or Deferment Prior to Cancellation” form which you can request directly from your school or your loan servicer. Note that the cancellation is a two-step process because the cancellation cannot be granted if you have not completed the 12 month service period first.

  • The request for deferment while service is being performed should be submitted at the beginning of the 12 month period to defer your payments.
  • A second form should be submitted upon completion of the 12 month period to receive the partial cancellation for the service previously performed.
  • After your first year, you may use a single form to cover both the benefit year that has passed for cancellation and to cover the upcoming year of service for deferment.

Required Documentation

You will need to provide the following each year when filling out your paperwork

  1. Copy of your medical license
  2. Copy of your official job description
  3. Official Seal or Stamp – To be placed on the cancellation form under section IV – Certification of Employment (If the organization doesn’t have item #3 they should proceed with item #4).
  4. Organization Official Letterhead – With the following information:
  5. Place of employment
  6. Status of employment (e.g., full-time)
  7. Confirmation that you work with them
  8. Brief description of job duties
  9. Employment start date
  10. If you have changed employers during the year, you MUST submit two cancellation forms (one for each employer). There should be no break periods between changing to a different employer.

By Edmund Lau, CFA

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Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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