Military Service in an "Area of Hostility"
Applies to all Federal Perkins Loans and National Direct Student Loans made on or after July 1, 1972.
To be eligible for this type of partial cancellation, the borrower must serve for a complete 12-month period 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.
NOTE: We have been informed that it is unlikely that any one person will be serving in such an area for a complete 12-month period. It is, therefore, suggested that the borrower apply for military deferment (which can be granted in monthly increments) when first stationed in such an area instead of partial cancellation. If the borrower is still stationed in such an area at the end of a complete 12-month period, the borrower should then change the deferment request to a partial cancellation request.
For each complete 12-month period that a borrower receives partial cancellation for service in the military, he/she is considered to have also used one year of military/ACTION deferment.
|Eligible Loans||Federal Perkins Student Loan|
|Maximum %||50% of original principal loan amount plus any interest that may have accrued during the year|
|Maximum Years||4 years|
|1st - 4th Year %||12.5% of original principal loan amount plus any interest that may have accrued during the year|