Currently, only Perkins Loans have any provisions for partial loan cancellation (i.e. there are no current provisions for Health Professions Loans or University Loans). All requests for payment postponement and/or partial cancellation must be signed by an authorized official of the employer.
Partial cancellations are granted on an annual basis for one completed 12-month period of full-time work/service. No cancellation may be allowed for less than a full 12 months of completed work/service although the work/service may be performed for more than one employer/agency. If work/service is performed for multiple employers/agencies, the borrower must provided certified documentation from each employer/agency for the period worked/served.
Although cancellation may only be granted after 12-months of full-time work/service have already been completed. A borrower should notify Loan Repayment Services as soon as full-time qualifying work/service has been secured to request a postponement of payment. A postponement of payment is issued at the beginning of the 12-month period of full-time work/service in anticipation of the cancellation request at the end of the 12-month period. During postponement, the borrower is not billed for payments and the account is considered current. In most cases, cessation of qualifying work/service before completion of a 12-month period means that the borrower will be responsible for any payments which have accrued since the date of the last payment received or the ending date of the last partial cancellation which was granted. Therefore, it is extremely important for the borrower to notify Loan Repayment Services of any changes in work/service.
At the end of a completed 12-month period of full-time qualify work/service which is properly documented, the borrower may receive a cancellation of a percentage of the original amount of principal borrowed plus accrued interest. The percentage cancelled each year and the number of years of cancellation that are allowed depends on the type of cancellation. See the section of this page entitled Descriptions of Eligible Work/Service for this information.
General Policies for Partial Cancellation
- In order to receive a postponement or partial cancellation, the borrower's account must be current to the beginning date of qualifying work/service.
- The borrower must apply for partial cancellation of his or her loan by obtaining the appropriate cancellation form from the Loan Management Section.
- The form must be submitted on time.
- The borrower must provide any documentation the school requests to show that he/she qualifies for cancellation.
- No portion of any loan may be cancelled for services the borrower performed before the date the loan was disbursed, or during the same period he or she received the loan.
- Defaulted loan amounts are not eligible for cancellation unless the only reason for the default was the borrower's failure to file a cancellation request on a timely basis. However, if the school has accelerated the account by the time the borrower files the necessary cancellation request forms, only eligible service performed prior to the date of acceleration can be considered for cancellation. A borrower is not entitled to cancellation for any eligible service performed after the date of acceleration.
- No repayment made during a period for which a borrower qualified for a cancellation may be refunded, unless the borrower made the payment because of institutional error.