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Perkins Loan Questoin

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So I have 10k in perkins loans and the way it works for PAs in case someone doesn't know is that you get your loan (interest and all) cancelled over 5 years as long as you work full time for 5 years. I think 15% gets cancelled the first two years, 20% the next two, and 30% for the final year. So I had a question regarding this. I read somewhere that if you stop working for greater than two weeks, you may not be eligible for cancellation of that year. However, say I have a child during one of those 5 years and take 3 months off to care for him or her even though I am technically still employed. What does that mean for cancellation? Does it mean that I have to pay for the entire year? that I have to make payments only during the time that I wasn't physically working? or what? Anyone have any ideas? I tried to look for this info all over the internet and couldn't find it.

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I have perkins loans from undergrad, so here goes...

At the beginning of your employment you apply for deferment for one year. At the end of the year you apply to have a certain percentage cancelled for the time you have worked in the previous year AND to have the remainder defered for an additional year. This continues until you have completed your fifth year and the total amount is cancelled. And yes, it is 15/15/20/20/30% per year.

You only get cancellation for each FULL year that you work FULL time...so if your employer considers that you were still employed full time (ie using sick/vacation/LOA) it can still count. If for some reason you do have a period where you are not employed full time and then re-start working full time, the clock starts the first day that you are full time again.

Here's a couple of examples that might make it more clear:

-You are injured at work and are out for 2 months. You use a combination of sick time and an approved unpaid LOA and then return to your job as soon as you are cleared to work. Your Perkins cancellation continues uninterupted.

-You leave one full time job in February and start another full time job in March. Your Perkins cancellation continues uninterupted.

-You get a new job and are working 40+ hours a week but are not officially a full time employee. You later become an official full time employee. Your Perkins cancellation starts when you are official, not when you work 40 hrs/week.

-You have worked full time for 11 months when you quit/leave to start PA school. You get no credit for this time because it was not a full year.


I hope this answers your questions, if not shoot me a PM or post again.

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