A Few Things We Know About Perkins
By Joan Berkes and Mandy Sponholtz, NASFAA Policy & Federal Relations Staff
The Federal Perkins Loan Program Extension Act of 2015 that was signed into law on December 18 replaced all former guidance on the wind-down of the Perkins Loan Program. A Dear Colleague Letter from the Department of Education (ED) on the new law is forthcoming, but in the meantime ED has provided some answers to basic questions posed by NASFAA members.
Click on a question in the section below to see its corresponding answer or scroll down further to read through all six questions and answers.
Q1. Can we go ahead and award Perkins based on the new legislation before we get guidance from ED?
Q3. Does a grandfathered borrower still have to be in the same academic major?
Q4. Do the forgiveness/cancellation benefits change?
Q5. With regard to graduate students, does the Extension Act do anything about the 15/16 award year?
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Q1. Can we go ahead and award Perkins based on the new legislation before we get guidance from ED?
A1. Yes. Schools can award Perkins Loan based on the new legislation effective December 20, 2015. However, schools should be aware that the legislation places restrictions on new Perkins borrowing, and requires additional disclosures prior to disbursing a Perkins Loan. A Dear Colleague Letter on the new legislation is forthcoming, and schools are advised to wait until the DCL is released before awarding new Perkins Loans.
Q2. Are the definitions of new borrower and continuing borrower now restricted to the current institution (so, if a student has just transferred to my institution, is he or she a new borrower regardless of Perkins borrowing at former institution)?
A2. Yes. The definitions of “new” and “current” student borrowers are based on Perkins Loans the borrower received from the school the borrower is currently attending. A borrower with an outstanding balance on a Perkins Loan received from a different school is still considered a “new” Perkins borrower at the school the student is currently attending.
Q3. Does a grandfathered borrower still have to be in the same academic major?
A3. The grandfathering guidance is no longer applicable. However, for a graduate student to continue to receive Perkins Loans, the graduate student must continue in the same academic program.
Q4. Do the forgiveness/cancellation benefits change?
A4. No. The basic terms and conditions of a Perkins Loan have not been changed.
Q5. With regard to graduate students, does the Extension Act do anything about the 15/16 award year?
A5. The new Perkins lending authority applies to the 2015-16 award year. A school may award a Perkins Loan for this award year to both graduate and undergraduate students who meet the applicable eligibility criteria. A school may continue to make Perkins Loans through September 30, 2016 to an eligible graduate student who has received a Perkins Loan before October 1, 2015 (who is enrolled in the same program at the same institution). Graduate students who have not received a Perkins Loan from the school they are attending prior to October 1, 2015 are not eligible.
Q6. We have a handful of graduate students who we awarded Perkins to this year but we cancelled their award because October 1 came and went and they didn’t do the prom note, entrance counseling, complete verification, etc. Does this new legislation allow those loans to be reactivated, or to offer Perkins to otherwise eligible grad students who hadn’t previously been offered Perkins for 15/16?
A6. As noted above, graduate students who have not received a Perkins Loan from the school they are attending prior to October 1, 2015 are not eligible. If a student was awarded a Perkins Loan but the award was cancelled, the student did not receive a Perkins Loan. The Extension Act makes no provision for “reactivating” loans that were awarded, but then cancelled.
Publication Date: 1/12/2016
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