Give members a different level when expiring or cancelling based on their previous level.

pmpro-cancel-level.php

/*
	When users cancel (are changed to membership level 0) who previously belonged to
	level 2 are given level 1 with expiration date of one year.
*/
function my_pmpro_after_change_membership_level($level_id, $user_id)
{
	$levelshistory = $wpdb->get_results("SELECT * FROM $wpdb->pmpro_memberships_users WHERE user_id = '$current_user->ID' ORDER BY id DESC");
	
	if($levelshistory && $levelshistory[0]->membership_id == 2 && $level_id == 0)
	{
		//cancelling, give them level 1 instead
		$expiry_level_id = 1;
		$level = pmpro_getLevel($expiry_level_id);
		
		//give them an expiry date one year from today.
		$level->enddate = date('Y-m-d',strtotime(date("Y-m-d", mktime()) . " + 365 day"));
		
		pmpro_changeMembershipLevel($level, $user_id);
	}
}
add_action("pmpro_after_change_membership_level", "my_pmpro_after_change_membership_level", 10, 2);