By entering into a Program Participation Agreement (PPA) with the U.S. Department of Education (ED), an institution agrees to comply with the regulations that govern the administration of the Title IV aid programs in which it participates. For the Federal Perkins Loan Program, this includes making funds reasonably available to all eligible students.

The Perkins regulations (34 CFR 674.9(b)) define eligible students in part as undergraduate, graduate, and professional students. The regulations go on to state in 34 CFR 674.10(b) that if an institution’s allocation was based directly or indirectly on the financial need of part-time or independent students, the institution must make a reasonable portion of loan funds available to these students. Due to the campus-based funding formula, very few schools escape the reasonable portion requirement.

ED has not defined reasonably available and has not provided prescriptive guidance in this area. Each institution must define what it considers to be a reasonable portion of funds. However, zero is not considered to be a reasonable portion of funds.

A school may not exclude from consideration any particular category of otherwise eligible students. When developing and implementing its packaging policies, an institution cannot award Perkins funds in such a way that graduate and professional students, for example, are excluded from consideration for available Perkins funds. A school that packages graduate and professional students as a separate category could set aside a portion of Perkins funds for this subpopulation, awarding the funds first to those students that meet the school’s definition of exceptional financial need (34 CFR 674.10(a)).

By Jennifer Martin
NASFAA Assistant Director for Professional Assessment, Training, and Regulatory Assistance

Posted 04/23/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.