Full-time Teacher in a "Low Income" School
This type of partial cancellation applies to borrowers teaching in a school serving a high concentration of low-income families*.
To be considered for this type of partial cancellation, the borrower must meet all criteria listed under General Information plus be teaching in a school that is listed in the Directory of Designated Low-Income Schools which is released annually by the Federal government. The Directory is not currently accessible from the web. For Information on whether a specific school qualifies contact the Loan Servicing Department at (800)433-6844 .
Subsequent Year Provision: Formerly, Federal regulations required that a school be listed in the Directory each year in order for a borrower to receive partial cancellation. The 1992 Federal Amendments alter this requirement. If you receive partial cancellation one year for service in a school which is listed in the Directory, but the next year this same school is not listed, you are now still eligible to receive partial cancellation at this same school based on your prior year qualification.
|Federal Perkins Student Loan
|100% of original principal loan amount plus any interest that may have accrued during the year
|1st & 2nd Year %
|15% of original principal loan amount plus any interest that may have accrued during the year
|3rd & 4th Year %
|20% of original principal loan amount plus any interest that may have accrued during the year
|5th Year %
|30% of original principal loan amount plus any interest that may have accrued during the year
Defined by the Secretary of Education as a school with more than 30% of its enrollment counted in the funding formula of Title I of the Elementary and Secondary Education Act of 1965, as amended. The school must be a public or other nonprofit private elementary or secondary school that is located in a school district of a local educational agency that is eligible for assistance under Title I of the Elementary and Secondary Education Act of 1965, as amended. All elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on reservations by Indian tribal groups under contract with the BIA qualify as schools serving low-income students.
All schools must have been in existence for one previous year before they may be listed regardless of the percentage of Title I students. If a school was previously in existence but now under a different name and having the exact same student population as before, the school will be considered.
Questions pertaining to the eligibility of an elementary or secondary school to be listed in the Directory should be directed to the appropriate State agency. If you do not know the State agency you should contact, you may contact Loan Repayment Services to assist you in this determination.