Cancellations

Cancellations

Under certain conditions a borrower may have all or part of his or her loan canceled. Cancellation means that a portion or all of the principal will never have to be repaid by the borrower. Note that interest does not accrue on the loan during the period that a borrower is performing service to qualify for cancellation benefits-the borrower must request deferment for pre-cancellation to defer the principal and interest payments.

Although cancellation provisions vary based on when a loan was disbursed, the following procedures apply to any loans: 

  • 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 provide certified documentation from each employer/agency for the period worked/served. 
  • Although cancellation may only be granted after completing 12-months of full-time work/service, a borrower should notify ACS or NNU as soon as full-time qualifying work/service has been secured to request a deferment of payment. A deferment 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 deferment, the borrower is not billed for payments.
  • At the end of a completed 12-month period of full-time qualifying work/service, the borrower must again provide certified documentation as proof of completion. Once proper documentation has been received by ACS or NNU, the borrower may receive a cancellation of a percentage of the original amount of principal borrowed plus any accrued interest. The percentage canceled each year and the number of years of cancellation that is allowed depends on the type of cancellation. See the section pertaining to your particular cancellation for cancellation rates. 
  • Requests for cancellation must be completed annually on the appropriate cancellation form. The borrower must provide any documentation the school requests to show that he or she qualifies for cancellation. 
  • No portion of the loan may be canceled for services performed before the loan was disbursed or during the enrollment period covered by the loan. 
  • Payment made during the period the borrower qualifies for cancellation will not be refunded. Therefore, it is the borrower's responsibility to file forms in a timely manner. 
  • A LATE CHARGE will be assessed and the loan account may be REPORTED AS A DELINQUENT ACCOUNT TO THE NATIONAL CREDIT BUREAUS if the deferment for pre-cancellation or the cancellation request are not received in a timely manner.
  • Defaulted loans 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. If the borrower is otherwise eligible for the cancellation, the school has the discretion to grant the cancellation to the borrower, but is not required to. 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. 
  • Schools may not grant a cancellation to a borrower who has received a national service education award for volunteer service with Americorps (Subtitle D of Title I of the National and Community Service Act of 1990).  

Download Request for Cancellation

Cancellation Types

The following types of cancellations are available to borrowers with Federal Perkins loans. To determine whether or not you meet the eligibility requirements, or to download a cancellation form, click here.

  • Teacher Cancellation-loans made on or after 7/1/72
  • Head Start
  • Teaching/Employment Cancellations
  • Law Enforcement
  • Military Service
  • Volunteer Service
  • Total/Permanent Disability
  • Death
  • 9/11 Survivors
  • Firefighter
  • Public Defender
  • Librarian
  • Tribal College/University Faculty
  • Pre-K Service Provider
  • Speech Pathologist
  • VA approved Total/Permanent Disability