Cancellation Information

Definitions

General Information

You must apply for cancellation by completing the cancellation form. The borrower must provide documentation the school requests to show he or she qualified for cancellation. No portion of any loan may be canceled for service the borrower performed before the date the loan was disbursed, or during the same period in which the loan was received.

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 request forms, only eligible services 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 by the borrower during a period for which the borrower qualified for cancellation may be refunded, unless the borrower made the payment because of an institutional error.

Cancellation Rates - The cancellation rates per year follow unless noted otherwise:

  • 15% for each of the first and second years of service
  • 20% for each of the third and fourth years of service
  • 30% for the fifth year of service

Deferment and cancellation may only be granted after the required forms are filed with Gonzaga University. All payments are due and payable until such time as deferment or cancellation forms are received by Gonzaga's Institutional Loan Office and approved by the Department of Education.

National and Community Service Act of 1990

Schools may not grant cancellation of a Perkins Loan or National Direct Student Loan (NDSL) to a borrower who has received an education benefit under Subtitle D of Title I of the National and Community Service Act of 1990.

Teaching Cancellations

Schools may cancel up to 100% of a Perkins Loan if the borrower has served full-time in a public or non-profit elementary school system as a:

  • teacher in a school serving students from low-income families;
  • special-education teacher, including teachers of infants, toddlers, children, or youth with disabilities; or
  • teacher in the fields of mathematics, science, foreign languages, or bilingual education or in any other field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.

Teacher Cancellation

Eligibility for teacher cancellation is based on the duties presented in an official position description, not on the position title. To receive a cancellation, you must be teaching full time in a public or other nonprofit elementary or secondary school system and must be directly employed by the school system. There is no provision for canceling Perkins Loans or NDSLs for teaching in post-secondary schools.

 
Who is a Teacher? A teacher is a person who provides students direct classroom teaching, or classroom-type teaching in a non-classroom setting, or educational services directly related to classroom teaching (for example, school librarian or guidance counselor).
What Qualifies as Teaching Full-time for a Full Academic Year? You must teach full time for a full academic year or its equivalent. There is no requirement that you must teach a given number of hours a day to qualify as a full-time teacher; the employing school is responsible for making that decision. An “academic year or its equivalent” for teacher cancellation purposes is defined as one complete school year or two half years that are (1) from different school years, excluding summer sessions; (2) complete, and (3) consecutive. The two half years also must generally fall within a 12-month period.
What if the Borrower Teaches Part-Time at Multiple Schools? You can receive cancellation if you are simultaneously teaching part time in two or more schools if an official at one of the schools where you taught certifies that you taught full time for a full academic year.
What if the Borrower Teaches in a Private School? You may receive teacher cancellation for services performed in a private academy if the private academy has established its nonprofit status with the Internal Revenue Service (IRS), and if the academy is providing elementary and/or secondary education according to state law.
What if the Borrower Teaches in a Preschool or Pre-kindergarten Program? You may receive teacher cancellation only if the state considers such a program to be a part of its elementary education program. A low-income-school-directory designation that includes pre-kindergarten or kindergarten does not suffice for a state determination of program eligibility.

Cancellation for Teaching in Low-Income Schools. A cancellation based on teaching in a school serving students from low-income families may be granted only if you taught in an eligible school as determined by the state education agency. To be considered a “low-income school,” the school must be in a school district that qualified for federal funds in the year for which the cancellation is sought. Also, more than 30 percent of the school’s enrollment must be made up of children from low-income families. To find out if the school that employs you is classified as a low-income school visit: https://www.tcli.ed.gov/CBSWebApp/tcli/TCLIPubSchoolSearch.jsp

Cancellation for Teaching in Special Education

A person who provides one of the following services does not qualify as a teacher unless 1) that person is licensed, certified, or registered by the appropriate state education agency for that area in which he or she is providing related special educational services and 2) the services provided by the individual are part of the educational curriculum for handicapped children:

  • speech and language pathology and audiology;
  • physical therapy;
  • occupational therapy;
  • psychological and counseling services; or
  • recreational therapy.

Cancellation for Teaching in a Field of Expertise

For you to be considered as teaching in a field of expertise, the majority of classes taught must be in your field of expertise.

If you teach science, mathematics, foreign language, or bilingual education you qualify for cancellation even if the state has not designated the subject area in which you teach as a shortage area.

Nurse or Medical Technician Cancellation

The terms nurse and medical technician are defined under Definitions.

Child or Family Services Cancellation

To receive loan cancellation for being employed at a child or family services agency, you must be providing services only to high-risk children who are from low-income communities. You may also be providing services to adults, but these adults must be members of the families of the children for whom services are provided. The services provided to adults must be secondary to the services provided to the high-risk children. The Department has determined that an elementary or secondary school system or a hospital is not an eligible employing agency.

Early Intervention Cancellation

For you to be considered as a full-time professional provider of early intervention services, you must be employed in a public or nonprofit program under public supervision.

Law Enforcement or Corrections Officer Cancellation

To establish the eligibility of a borrower for the law enforcement or corrections officer cancellation provision, the school must determine that (1) your employing agency is eligible and that (2) your position is essential to the agency's primary mission.

  1. A local, state, or federal agency is an eligible employing agency if it is publicly funded and its activities pertain to crime prevention, control, or reduction or to the enforcement of the criminal law. Such activities include, but are not limited to, police efforts to prevent, control, or reduce crime or to apprehend criminals; activities of courts and related agencies having criminal jurisdiction; activities of corrections, probation, or parole authorities; and problems relating to the prevention, control, or reduction of juvenile delinquency or narcotic addiction.

    Agencies that are primarily responsible for enforcement of civil, regulatory, or administrative laws are ineligible.

  2. For your position to be considered essential to the agency's primary mission, you must be a full-time employee of an eligible agency and a sworn officer or person whose principal responsibilities are unique to the criminal justice system and are essential in the performance of the agency's primary mission. The agency must be able to document the employee's functions.

    Individuals whose official responsibilities are supportive, such as those that involve typing, filing, accounting, office procedures, purchasing, stock control, food service, transportation, or building, equipment or grounds maintenance are not eligible for the law enforcement or correction officer loan cancellation regardless of where these functions are performed. Also, a borrower employed as a public defender does not qualify for cancellation benefits under this provision.

Head Start Cancellation

A full-time staff member is someone who is regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program. The program must operate for a full academic year, or its equivalent, and your salary may not be more than that of a comparable employee working in the local educational agency. An authorized official of the Head Start Program must sign the cancellation form to certify the service.

The cancellation rate is 15% of the original principal loan amount--plus the interest that accrued during the year--for each complete school year.

Military Service Cancellation

You are also entitled to cancellation of up to 50% of a Perkins Loan or NDSL for service in the U.S. Armed Forces in an area of hostilities or an area of imminent danger that qualifies for special pay under Section 310 of Title 37 of the U.S. Code. The cancellation rate for every complete year of qualifying service is 12.5% of the original principal loan amount plus any interest that accrued during the year.

To qualify for military cancellation, a borrower must be serving a period of full-time active duty in the armed forces (that is, the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard). A member of the National Guard or the Reserves serving a period of full-time active duty in the armed forces is also eligible to receive a military deferment. For a Perkins Loan or NDSL cancellation, the service in the armed forces must be in an area of hostilities or an area of imminent danger that qualifies for special pay under Section 310 of Title 37 of the U.S. Code. For Defense Loan cancellation, the service does not have to be in an area of hostilities or area of imminent danger. Your Commanding Officer must certify the borrower's service dates.

The cancellation rate of 12.5% of the original principal loan amount is for each complete year of service; service for less than a complete year or any fraction of a year beyond a complete year does not qualify.

Volunteer Service Cancellation

You are entitled to cancel up to 70% of a Perkins Loan or NDSL for service as a Peace Corps volunteer or volunteer under the Domestic Volunteer Service Act (ACTION program). An authorized official of the Peace Corps or ACTION program must sign the cancellation form to certify the service. Schools apply cancellation for volunteer service in the following increments:

  • 15% of the original principal loan amount--plus any interest that accrued during the year--for each of the first and second 12-month periods of service and
  • 20% of the original principal loan amount--plus any interest that accrued during the year--for each of the third and fourth 12-month periods of service.