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Perkins Loan Cancellation OptionsTABLE OF CONTENTS
You will need to provide a completed form to request any of the cancellation options listed. A form is printed on the back of all billing and grace ending notices that are sent to you, and at www.esci.net. Not all cancellations are available for all time periods on all loans. You must file a completed form with all the required documentation to be eligible for cancellation. Different cancellations require different documents and they have been noted on each type. We will contact you when we receive the form and respond with what action was taken and when a new form is due to be filed. If you continue to receive bills or past due notices, but you think your cancellation should have been processed, contact this office right away. Either there was an error made, or the form was not received, or there was something missing. Either your form or your payment is due by the due date. Late forms report to the credit bureau the same as a payment made late. All exit paperwork must be completed and returned to this office before any cancellations or postponements will be processed. The cancellation process is two-part. The first step is the postponement (deferment), applied at the beginning of your twelve months of eligible employment. It tells us that you are currently working in an eligible field and plan to stay there for at least twelve months. This defers all payments, interest does not accrue, and a good report continues to be sent to the credit bureau. At the end of twelve months, you will be sent another form to file verifying that you completed a year of eligible employment. On that same form, if you are continuing in the same job, you will have it verified that you plan to continue for the upcoming twelve months. From that one form, we will cancel a portion of your loan for the twelve months just ending and postpone for the upcoming twelve months. Cancellation can only be done after employment has been completed every twelve months. If you do not complete a year of eligible employment, you must contact this office. We will convert the postponement to a deferment ending with your last day of employment, then add a six-month grace period to that date. The payments that were postponed during that time are now deferred, no interest has accrued, and you have the six-month post-deferment grace. You must be sure to file your form every year to continue this benefit. HEAD START POSTPONEMENT/CANCELLATION Full-time staff members in the educational part of pre-school program carried out under the Head Start Act qualify for cancellation on their Federal Perkins Loans. This applies to all money borrowed under this fund since October 1980. A Full-Time Staff Member is Defined as: Someone who is regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program. This would mean that you do not have to be employed as a teacher, but must be a part of educational staff. For example, a classroom aide would qualify but a secretary would not. You must be employed a full academic year, or its equivalent and your salary cannot be more than that of a comparable employee working in the local educational agency. To Receive the Postponement/Cancellation: Fill out and sign your form, have an authorized official of the Head Start Program certify the information provided concerning your employment, and return the form to this office for processing. General Process: The postponement form is done at the beginning of your year and certifies that you are employed at Head Start in a qualifying position and plan to work the full year. We then code your account so no bills are sent or due, and your loans report as deferred to the credit bureau. The cancellation form is done at the end of your academic year and certifies that you have completed a year of eligible employment. When processed, a portion of your loan is cancelled -- principal and interest. If you continue in eligible employment, the process starts over. If You Fail to Complete Your Year of Employment: There are two ways this is handled depending on when you borrowed your loan. If you borrowed prior to 7/92, you will owe immediately all the payments came due during the postponement. If you borrowed after 7/92, your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period. Rates of Cancellation: 15 percent of the original principal balance of the loan, plus the interest, per year. If you continue to qualify for this cancellation and file proper forms, your loan will be cancelled in full after seven years of eligible employment. TEACHER POSTPONEMENT/CANCELLATION Full-time, full-year employment in many different fields of teaching qualifies for cancellation of your Perkins Loan. THE WORD TEACHER DOES NOT HAVE TO BE A PART OF YOUR JOB TITLE TO QUALIFY FOR TEACHER POSTPONEMENT/CANCELLATION. According to the Department of education, a TEACHER IS:
Examples of positions that may qualify that are many times over-looked as qualifying teachers include, but are not limited to: coaches, guidance counselors, learning lab staff, librarians, resource teachers, library aides. Teachers aides, assistant teachers, and paraprofessionals may qualify under certain conditions. Examples of staff that would NOT BE ELIGIBLE would be business officers, campus store clerks, secretaries, medical staff, custodial staff, cafeteria staff because they do not provide direct and personal service for the student's educational development. You must be directly employed by the school system. That requirement may be met by meeting one of the following criteria: 1 - A facility recognized or licensed by the state to provide elementary or secondary education, OR 2 - An agency licensed by the state to provide education as mandated by state law. If you
are employed as a physical, occupational, or recreational therapist
or speech pathologist/audiologist, psychiatrist or psychologist,
you may qualify but must meet special criteria. You must be licensed,
certified, or registered in the profession by the state agency and
you must be providing services as part of the educational curriculum.
This will require you providing a copy of your license, certificate,
registration, or endorsement, and an official job description or
letter from a school official verifying your work as part of the
educational curriculum.
General Process: The postponement is the first step in the cancellation process. It stops all billings and keeps your account from going past due until the end of this twelve-month period. The cancellation is the second and final step in the process. By requesting cancellation, you are telling us you have now completed the year of service and are now eligible to have a portion of your loan forgiven (cancelled). If You Fail to Complete Your Year of Employment: Your postponement is then considered a deferment. You will need to send verification of your last date of employment, and we will use that as your deferment end date. There is a six-month grace period following this deferment in which no interest accrues and no payments are due. Rates of Cancellation: 15% of the original principal balance, plus interest for the first and second year, 20% for the third and fourth years, and 30% for the fifth year. If you continue in eligible employment and file all your forms, your loan would be cancelled in full at the end of five years. LAW ENFORCEMENT/CORRECTIONAL OFFICER Full-time, full year employment in law enforcement or corrections qualifies some Federal Perkins Loan borrowers for cancellation of their loan. Qualifying Employment: The agency:
Your position:
Persons whose responsibilities are supportive (typing, filing, custodial, foodservice, accounting, maintenance, etc.) are not eligible regardless of where these duties are performed. The DOE has determined that a public defender does not qualify under this cancellation benefit. To Receive Postponment/Cancellation: Fill out and sign your form, have an official certify your employment information, and return the form to this office with a copy of your official job description. A determination of whether or not you qualify will be made in this office after the receipt of your completed form. General process: The postponement form is done at the beginning of a 12 month period and certifies that you are employed in a qualifying position and plan to continue there a full year. We then code your account so no bills are sent and no payments are due. This coding also reports your loans as deferred to the credit bureau. The cancellation form is done at the end of that twelve-month period and certifies that you have completed a full year of eligible employment and are now eligible to have a portion of your loan cancelled. When processed, a portion of your loan balance is cancelled -- principal and interest. If you continue in eligible employment, the process starts over. If You Fail to Complete Your Year of Employment: There are two ways this is handled depending on when you borrowed your loan. If you borrowed prior to 7/92, you will owe immediately all the payments came due during the postponement. If you borrowed after 7/92, your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period. Rates of cancellation: 15 percent of the original principal balance, plus interest for the first and second years, 20 percent for the third and fourth years, and 30 percent for the fifth year. If you continue in eligible employment and file all your forms, your loan would be cancelled in full at the end of five years. NURSE OR MEDICAL TECHNICIAN POSTPONEMENT/CANCELLATION Full-time, full-year employment as a nurse or medical technician qualifies some Federal Perkins Loan borrowers for cancellation of their loan. A Nurse is Defined as: An LPN, an RN, or other individual who is licensed by the appropriate state agency to provide nursing services. A Medical Technician is Defined as: An allied health professional (working in fields such as therapy, dental hygiene, medical technology, or nutrition) who is certified, registered, or licensed by the appropriate state agency in the state in which he or she provides health care services. An allied health professional is someone who assists, facilitates, or complements the work of physicians and other specialists in the health care system. You must be a full-time, full-year employee. However, you may fulfill that requirement with part-time work at more than one facility as long as your hours equal full-time employment. The intent of this benefit is to include health care professionals even though they work in a facility that would not qualify as a health care facility (such as a school) or who might be working in a private facility. Full-Time Employment is Defined as:
To Receive the Postponement/Cancellation: Fill out and sign your form, have an official certify your employment information, and return the form to this office with a copy of your official job description. You will also need to provide a copy of your registration, certification, or licensing and your board dates. A determination of whether or not you qualify will be made in this office after the receipt of your completed form. General Process: The postponement form is done at the beginning of a 12 month period and certifies that you are employed in a qualifying position and plan to continue there a full year. We then code your account so no bills are sent and no payments are due. This coding also reports your loans as deferred to the credit bureau. The cancellation form is done at the end of that twelve-month period and certifies that you have completed a full year of eligible employment, and are now eligible to have a portion of your loan cancelled. When processed, a portion of your loan balance is cancelled -- principal and interest. If you continue in eligible employment, the process starts over. If You Fail to Complete Your Year of Employment: Your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period. Rates of Cancellation: 15 percent of the original principal balance, plus interest for the first and second years, 20 percent for the third and fourth years, and 30 percent for the fifth year. If you continue in eligible employment and file all your forms, your loan would be cancelled in full at the end of five years. CHILD OR FAMILY SERVICE AGENCY EMPLOYEE Full-time, full-year employment in a public or private nonprofit child or family service agency providing service working with high-risk children from low-income communities qualifies some Federal Perkins Loan borrowers for cancellation of their loan. Qualifying Employment: The agency: 1 - Must be a public or private nonprofit child or family service agency 2 - Must provide or supervise the provision of services to high-risk children who are from low-income communities and the families of such children. The DOE has determined that an elementary school or secondary school system or a hospital is not an eligible employing agency. Your position: 1 - You must be a full-time, full-year employee of the agency. You must be providing services only to high-risk children (as defined below). You may also be providing services to adults, but these adults must be members of the families of the children for whom services are provided. The services provided to adults must be secondary to the services provided to the high-risk children. High-Risk Children: Individuals under 21 who are low-income and at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in placements outside their home, OR are involved in the juvenile justice system. Low-Income Communities: Communities in which there is a high concentration of children eligible to be counted under Title I of the Elementary and Secondary Education Act of 1965 as amended. To Receive Postponment/Cancellation: Fill out and sign your form, have an official certify your employment information, and return the form to this office with a copy of your official job description. A determination of whether or not you qualify will be made in this office after the receipt of your completed form. We will also require verification that your agency meets the criteria above. This can be satisfied through a letter on letterhead from the certifying official. If you have a brochure or other pre-printed material that clearly states this information, that can also be used. General Process: The postponement form is done at the beginning of a 12 month period and certifies that you are employed in a qualifying position and plan to continue there a full year. We then code your account so no bills are sent and no payments are due. This coding also reports your loans as deferred to the credit bureau. The cancellation form is done at the end of that twelve-month period and certifies that you have completed a full year of eligible employment, and are now eligible to have a portion of your loan cancelled. When processed, a portion of your loan balance is cancelled -- principal and interest. If you continue in eligible employment, the process starts over. If You Fail to Complete Your Year of Employment: Your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period. Rates of Cancellation: 15 percent of the original principal balance, plus interest for the first and second year, 20 percent for the third and fourth years, and 30 percent for the fifth year. If you continue in eligible employment and file all your forms, your loan would be cancelled in full at the end of five years. PROVIDER OF EARLY INTERVENTION SERVICES Full-time, full-year employment as a qualified professional provider of early intervention services qualifies some Federal Perkins Loan borrowers for cancellation of their loan. Early intervention services are those services as defined in the Individuals with Disabilities Education Act that are provided to infants and toddlers (birth to 2 years inclusive) with disabilities. (Section 672 of the Act) The Services Must be:
7 - Must be provided in conformity with an individualized family service plan adopted in accordance with the Individuals With Disabilities Education Act. To Receive Postponement/Cancellation: Fill out and sign your form, have an official certify your employment information, and return the form to this office with a copy of your official job description. You will also need to provide information verifying your employer meets the requirements as listed above. A determination of whether or not you qualify will be made in this office after the receipt of your completed form. General Process: The postponement form is done at the beginning of a 12 month period and certifies that you are employed in a qualifying position and plan to continue there a full year. We then code your account so no bills are sent and no payments are due. This coding also reports your loans as deferred to the credit bureau. The cancellation form is done at the end of that twelve-month period and certifies that you have completed a full year of eligible employment, and are now eligible to have a portion of your loan cancelled. When processed, a portion of your loan balance is cancelled -- principal and interest. If you continue in eligible employment, the process starts over. If You Fail to Complete Your Year of Employment: Your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period. Rates of Cancellation: 15 percent of the original principal balance, plus interest for the first and second years, 20 percent for the third and fourth years, and 30 percent for the fifth year. If you continue in eligible employment and file all your forms, your loan would be cancelled in full at the end of five years. |
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Office of Business Operations • 1148 Campbell • University of Northern
Iowa
Cedar Falls, Iowa 50614-0008
Phone: 319-273-2162• Fax: 319-273-3009
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Date Updated: September 20, 2005 |
