Under certain circumstances, the federal government will cancel all or part of an educational loan.

To qualify, you must:

  • Perform volunteer work
  • Perform military service
  • Teach or practice medicine in certain types of communities or
  • Meet other criteria specified by the forgiveness  program


  • Serve for 12 months
  • Receive up to $7400 in stipends
  • Plus $4725 to be used towards your loan

Peace Corps

  • Two years of service in more than 70 developing countries.
  • May apply for deferment of Stafford, Perkins and Consolidation loans
  • Partial cancellation of Perkins Loans (15% for each year of service, up to 70% in total)

Volunteers in Service to America (VISTA)

  • Volunteer with private, non-profit groups that help eradicate hunger, homelessness, poverty and illiteracy
  • 1700 hours of service
  • Receive $4725

Military Student Aid

Pursuing careers in the military and for veterans and their dependents. (Primarily for U.S. citizens)

  • Up to 50% of Perkins loans and Stafford loans for service in areas of hostilities or imminent danger
  • Army National Guard may be eligible for Student Loan Repayment Program which offers up to $10,000

Note: The military and veterans’ associations provide many scholarships and tuition assistance programs.

Minority Master Fellows Program (MMF provides forgivable loans to African-American, Hispanic, Asian-American, and Native American seeking a master’s degree in education in field other than administration.

  • $1250 per 3 graduate credit hours enrolled
  • $3750 Maximum award per semester
  • $7500 Maximum lifetime award

May receive funds until they have received:

  • Maximum award of $7500, or
  • Completed master’s degree, or
  • Maximum of 3 years

Eligibility Requirements

  • African-American, Hispanic, Asian American or Native American
  • Be a bona fide Arkansas resident 6 months prior to application deadline
  • U.S. citizen or permanent resident alien
  • Be enrolled in Arkansas public or independent 4-year institution
  • Baccalaureate degree and be admitted to approved master’s level education program in field other than administration
  • Minimum 2.75 cumulative GPA on 4.00 scale

Public Service Loan Forgiveness

Discharges any remaining debt after 10 years of full-time employment in public service.


  • Must have made 120 payments on Federal Direct Loan
  • Only payments made on or after October 2, 2007 count toward required 120 monthly payments

(Borrowers may consolidate into Direct Lending to qualify for this program starting July 1, 2008.

Public Service Loan Forgiveness

  • Public child care
  • Social work in a public child or family service agency
  • Public services for disabled or elderly
  • Public interest legal services
  • Public and school librarians and other school-based services
  • Employees of tax exempt 501© (3)
  • Government
  • Military service
  • Public safety
  • Law enforcement (police and fire)
  • Public health
  • Public education
  • Public early childhood education

Eligible Loans

  • Federal Direct Stafford Loans (Subsidized and Unsubsidized)
  • Federal Direct PLUS Loans
  • Federal Direct Consolidation Loans

120 monthly payments on Direct loan under one or combination of the following plans:

  • An income-based repayment plan
  • An income-contingent repayment plan
  • A standard repayment plan based on 10 year period