[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR674.59]



[Page 606]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 674_FEDERAL PERKINS LOAN PROGRAM--Table of Contents

 

                       Subpart D_Loan Cancellation

 

Sec. 674.59  Cancellation for military service.



    (a) Cancellation on a Defense loan. (1) An institution shall cancel 

up to 50 percent of a Defense loan made after April 13, 1970, for the 

borrower's full-time active service starting after June 30, 1970, in the 

U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard.

    (2) The cancellation rate is 12\1/2\ percent of the original loan 

principal, plus the interest on the unpaid balance accruing during the 

year of qualifying service, for the first complete year of qualifying 

service, and for each consecutive year of qualifying service.

    (3) Service for less than a complete year, including any fraction of 

a year beyond a complete year of service, does not qualify for military 

cancellation.

    (b) Cancellation of an NDSL or Perkins loan. (1) An institution 

shall cancel up to 50 percent of an NDSL or Perkins loan for service as 

a member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard 

in an area of hostilities that qualifies for special pay under section 

310 of title 37 of the United States Code.

    (2) The cancellation rate is 12\1/2\ percent of the original loan 

principal, plus the interest on the unpaid balance accruing during the 

year of qualifying service, for each complete year of qualifying 

service.

    (3) Service for less than a complete year, including any fraction of 

a year beyond a complete year of service, does not qualify for military 

cancellation.



(Authority: 20 U.S.C. 425(b)(3) and 1087ee)



[52 FR 45758, Dec. 1, 1987. Redesignated at 59 FR 61413, Nov. 30, 1994]