Federal Student Aid’s Director of Policy Liaison and Implementation Jeff Appel on Tuesday at the 2018 Federal Student Aid (FSA) Training Conference in Atlanta announced ED will be delaying the recall of Federal Perkins Loan funds “for the time being,” updating former guidance that stated ED’s intention to begin recalling Perkins funds as soon as next month. NASFAA had been seeking a delay while ED explores the possibility of reimbursing institutions for their share of Perkins cancellations.
While ED has acknowledged the obligation to repay colleges and universities the over $300 million owed for their share of cancelled Perkins loans, it has yet to do so, citing the lack of recent congressional appropriations. For the last several months, NASFAA has been working with the American Council on Education (ACE) to urge ED to meet its contractual reimbursement obligations regardless of appropriation, sending a letter first in July with a follow up letter in October. The letters asked ED to publicly announce its intentions to resume reimbursing institutions for cancelled Perkins Loans—which it has failed to do since fiscal year (FY) 2010— or, at a minimum, to delay requiring institutions participating in the Perkins loan program to return any funds to the Department until the issue of cancellation costs is resolved.
“Today’s announcement marks a step in the right direction towards ensuring the responsible closeout of this program,” said NASFAA President Justin Draeger.
NASFAA will keep an eye out for further guidance from ED in the near future about the next steps for Perkins cancellation reimbursements. In the meantime, NASFAA has created a tool schools can use to estimate how much they are owed by the federal government.
Publication Date: 11/27/2018