Deferment & Cancellation - Federal Perkins, Defense and National Direct Student Loan (NDSL)

If you have a Federal Perkins Loan, a Defense loan or a National Direct Student Loan (NDSL) you may be eligible to temporarily defer payment on the loan or to cancel part or all of it.

Important: The information in this Web site is intended to be general in nature and to address the most common types of deferment and cancellation. Not every type of deferment or cancellation is described in this Web site. In some cases, eligibility for deferment and/or cancellation depends on the type of loan and/or the date on which the loan was borrowed. There are also specific definitions of certain eligibility criteria. The deferment conditions described on the Web site apply to all Perkins/NDSL/Defense loans, regardless of when the loan was made; there are additional deferments under the Perkins Loan Program, but they only apply to Perkins/NDSL/Defense loans made before July 1, 1993.

The Federal regulations governing administration of the Defense loan, NDSL and Federal Perkins Loan programs (specifically 34 CFR 674 Subpart B and Subpart D) provide more detailed information on deferment and cancellation. However, please feel free to submit a deferment or cancellation request to your loan holder; you will be notified if further information is needed or if you do not qualify.

Deferment

What is deferment?

During a period of deferment, you are not required to make payments toward your loan. Interest does not accrue during periods of deferment.

Do I qualify for deferment?

Depending on the type of loan you have, and when that loan was borrowed, you may be eligible to defer repayment of your loan if you are:

How do I apply for deferment?

There is no standard application form for deferment. If your loan holder is not the U.S. Department of Education (the Department), please contact your loan holder for instructions.

The following instructions apply only if the Department is your loan holder.

To apply, simply send a written request to the Department. Along with your request, please include any documentation specified for that condition in the deferment table below (after reviewing your request, the Department may require that you submit additional information). In your request, please specify:

  • The condition that makes you eligible for deferment (from the deferment table below)
  • The date that condition began and the date it is expected to end (if you don't know when it is expected to end, state that the condition is "indefinite").

Please include the following signed statement in your deferment request:

"I agree to notify the Department immediately if my status changes. The information I have provided is true and accurate to the best of my knowledge."

Here is a sample deferment request.

If you are applying for deferment on the basis of service that qualifies you for cancellation, please read this.

How long may I defer payment on my loan?

There is no limit to how long you can defer payment on your loan while you are enrolled:

  • At least half-time in an eligible institution, or
  • In a graduate or post-graduate fellowship program, or
  • In a rehabilitation program for disabled individuals

You may only defer payment for up to a total of three years on the basis that you are:

  • Seeking but unable to find full-time employment
  • Experiencing economic hardship

You may defer payment while you are performing service that qualifies you for cancellation.

Deferment Types

Eligibility Condition What to Include With Your Deferment Request
In School - You must be enrolled in an eligible institution at least half-time. An enrollment verification form (which your school can provide to you)
Graduate or Post-Graduate Fellowship A certification that you have been accepted or are engaged in full-time study in an eligible graduate or post-graduate fellowship program
Rehabilitation Training Program for Disabled Individuals A certification from an eligible rehabilitation agency that you are either receiving or are scheduled to receive rehabilitation training services from the agency
Unemployed - You must be seeking but unable to find full-time employment Evidence that you are not employed full-time (e.g., unemployment benefits, evidence of part-time employment),

and

Evidence that you have been denied full-time employment (e.g., a rejection letter from a prospective employer)
Economic Hardship A completed Statement of Financial Status,

or

Documentation showing that you have been granted an economic hardship deferment under either the Federal Family Education Loan Program or the William D. Ford Direct Loan Program,

or

Documentation showing that you are receiving payment under a Federal or state public assistance program
Service which may qualify you for cancellation See the Cancellation Types table

Cancellation

What is cancellation?

Cancellation rewards individuals who perform certain types of public service or are employed in certain occupations. For each complete year of service, a percentage of the loan may be canceled. The total percentage of the loan that can be canceled depends on the type of service performed—in some cases 100% of a loan may be canceled. You cannot receive a refund of money you paid toward a loan even if you were eligible, or eventually become eligible, to cancel that portion of the loan.

Do I qualify for cancellation?

Depending on the type of loan you have, and when that loan was borrowed, you may be eligible to cancel part of or all of your loan if you have served as a:

If a loan defaults and has been accelerated, an individual loses his or her eligibility for cancellation for services performed on or after the date of acceleration.

How do I apply for cancellation?

There is no standard application form for cancellation. If your loan holder is not the U.S. Department of Education (the Department), please contact your loan holder for instructions.

The following instructions apply only if the Department is your loan holder.

To apply for cancellation, simply send a written request to the Department at the end of each year of your service. Note: you may apply for deferment of your loan at the beginning of each year of your service; by doing so, you will not be required to make payments while performing the qualifying service.

Along with your request, please include any documentation specified for that condition in the cancellation table below (after reviewing your request, the Department may require that you submit additional information). In your request, please specify:

  • the condition that makes you eligible for cancellation or deferment (from the cancellation table below)
  • the dates on which your service began and ended

Please include the following signed statement in your cancellation request:

"The information I have provided is true and accurate to the best of my knowledge."

Please include the following signed statement in your deferment request:

"I agree to notify the Department immediately if my status changes. The information I have provided is true and accurate to the best of my knowledge."

Here is a sample cancellation deferment request.

Cancellation Types

(You may also defer your loan while performing the qualifying service)

Eligibility Condition What to Include With Your Cancellation or Deferment Request
Peace Corps or ACTION Program Any official document issued by the agency, including a signed letter on official letterhead, that indicates your dates of volunteer service
Teacher
To be eligible, you must be teaching in
A statement on school letterhead, signed by the principal of your school, indicating your dates of service
Military
You must be a member of the U.S. Army, Navy, Air Force, Marine Corps or Coast Guard and you must be serving in an area of hostilities that qualifies for special pay.
A copy of recent orders or a signed statement on official letterhead from your commanding officer indicating your dates of service
Nurse or Medical Technician Any official document, including a letter on official letterhead, issued by your employer that indicates your position and dates of service
Law Enforcement or Corrections Officer
You must be employed full-time in a local, State, or Federal law enforcement or corrections agency, and you must be either a sworn law enforcement or corrections officer or a person whose principal responsibilities are unique to the criminal justice system.
Any official document, including a letter on official letterhead, issued by your employer that indicates your position and dates of service
Head Start
You must be regularly employed by a Head Start Program in a full-time professional capacity to carry out the educational part of the Head Start Program.
Any official document, including a letter on official letterhead, issued by your employer that indicates your position and dates of service
Child or Family Services
You must be an employee of a child or family services agency, and you must be providing services directly and exclusively to high-risk children from low-income communities
Any official document, including a letter on official letterhead, issued by your employer that indicates your position and dates of service
Professional provider of early intervention services
You must be a full-time provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as authorized by the Individuals with Disabilities Act
Any official document, including a letter on official letterhead, issued by your employer that indicates your position and dates of service

Loan Holder:

If you found this Web site address on a notice from the U.S. Department of Education (the Department), your loan-holder's address is

US DEPARTMENT OF EDUCATION
PO BOX 5609
GREENVILLE TX 75403-5609

If you do not know who your loan holder is you may find out by calling the Department at 1-800-621-3115.

Sample Deferment Request

I request deferment because I am enrolled in an eligible school at least half-time. My enrollment began on September 1, 2002 and is expected to continue until May 30, 2004. I have enclosed a copy of an enrollment verification form, provided to me by my school. I agree to notify the Department immediately if my status changes. The information I have provided is true and accurate to the best of my knowledge. Signed, John Hancock, SSN 999-99-9999

Sample Cancellation Deferment Request

Cancellation:

I request cancellation of my Perkins/NDSL loan(s) held by the U.S. Department of Education (the Department) on the basis of my service as a teacher in a designated low-income school from January 1, 2002 through December 31, 2002. I have enclosed a letter on official school letterhead signed by my principal that confirms my position and dates of service. The information I have provided is true and accurate to the best of my knowledge. Signed, John Hancock, SSN 999-99-9999

Deferment:

I request deferment of my Perkins/NDSL loan(s) held by the U.S. Department of Education on the basis of my service as a teacher in a designated low-income school from January 1, 2002 through December 31, 2002. I have enclosed a letter on official school letterhead signed by my principal that confirms my position and expected dates of service. I agree to notify the Department immediately if my status changes. The information I have provided is true and accurate to the best of my knowledge. Signed, John Hancock, SSN 999-99-9999