Practice is called Loan Forgiveness
Under certain circumstances, the federal will cancel all or a part of an academic loan. This practice is named Loan Forgiveness. To qualify, you must:
Perform volunteer work
Perform military service
Teach or practice medicine in certain sorts of communities
Meet other criteria specified by the forgiveness program
Volunteer Work – These volunteer organizations offer loan forgiveness: AmeriCorps, Peace Corps , Volunteers in commission to America (VISTA)
Military – Students who are within the Army National Guard could also be eligible for his or her Student Loan Repayment Program. See the section on Military Aid for details.)
Teaching – Students who become full-time teachers in an elementary or lyceum that serves students from low-income families can have some of their Direct or PLUS loans forgiven under The National Defense Education Act. The American Federation of Teachers maintains an inventory of other loan forgiveness programs for teachers.
See the US Department of Education’s pages on Teacher Loan Forgiveness program and their database of low-income schools eligible for teacher loan cancellation. The TCLI Directory lists low-income elementary schools, secondary schools and academic service agencies (ESAs) that are eligible schools or ESAs for purposes of the William D. Ford Federal loan (Direct Loan) and Federal Family Education Loan (FFEL) teacher loan forgiveness program, Federal Perkins Loan/National Direct Student Loan teacher cancellation, and therefore the Teacher Education Assistance for school and better Education (TEACH) Grant Program.
Legal and Medical Studies – Many law schools forgive the loans of scholars who serve publicly interest or non-profit positions. For more information, contact Equal Justice Works. The American Bar Association (ABA) also features a summary of Loan Repayment Assistance Programs (LRAP),(LRAP) and State Loan Repayment Assistance Programs.
The federal government canceled the program because of budgetary issues. The purpose of the Perkins loan program was to provide an outstanding financial need for students. Even though the Perkins loans program was available for about one percent of all students who borrowed, it helped thousands of students to get out of debt.
Now, according to the National Association of Student Financial Administrators, 528,000 benefited from the program in the 2014-15 academic year. The average amount was $2,198.
In 2015, the purpose of the Federal Perkins Loan Program Extension Act was to eliminate the Perkins loan in two years. The idea was that Congress would overhaul the whole student loan system before they ended it. But somehow, they allowed the Perkins Loan program to expire in 2017. Currently, lawmakers are working to make a replacement.
The repayment options for Perkins loans are not the same as other federal student loans, such as Direct Loan or FFEL programs. You’re not even qualified for any income-driven repayment opportunities. That means when you fall below the half-time enrollment nine months before you get your bill, you’ll get at least a $40 monthly payment.
Let’s recap on the repayment plans to get a better understanding.
Your loan will be in a grace period for nine months after you fall below the half-time enrollment. But, the school you enrolled in can extend the repayment up to ten years, especially if you are a low-income individual. A low-income individual is someone whose income falls below 150 percent of the poverty line.
There’s, however, good news. If you want to use the income-driven repayment plan, you can consolidate your Perkins loan into a Direct Loan. The student loan consolidation can be beneficial if your loan forgiveness is under the Public Service Loan Forgiveness program.