Full-time staff members in the educational part of pre-school program carried out under the Head Start Act qualify for cancellation on their Federal Perkins Loans.
A FULL-TIME STAFF MEMBER IS DEFINED AS: Someone who is regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program. This would mean that you do not have to be employed as a teacher, but must be a part of educational staff. For example, a classroom aide would qualify but a secretary would not.
You must be employed a full academic year, or its equivalent and your salary cannot be more than that of a comparable employee working in the local educational agency.
TO RECEIVE THE POSTPONEMENT/CANCELLATION: Fill out and sign your form, have an authorized official of the Head Start Program certify the information provided concerning your employment, and return the form to this office for processing.
GENERAL PROCESS: The postponement form is done at the beginning of your year and certifies that you are employed at Head Start in a qualifying position and plan to work the full year. We then code your account so no bills are sent or due, and your loans report as deferred to the credit bureau. The cancellation form is done at the end of your academic year and certifies that you have completed a year of eligible employment. When processed, a portion of your loan is cancelled -- principal and interest. If you continue in eligible employment, the process starts over.
IF YOU FAIL TO COMPLETE YOUR YEAR OF EMPLOYMENT: Your loan is eligible for deferment for the portion of the year you worked, plus a six-month grace period following. No payments or interest is due until the end of the grace period.
RATES OF CANCELLATION: 15 percent of the original principal balance of the loan, per year. If you continue to qualify for this cancellation and file proper forms, your loan will be cancelled in full after seven years of eligible employment.