Important Federal Perkins Loan Reminders Provided at NASFAA Conference
By David Futrell, AskRegs Manager
During this conference session, Department of Education (ED) officials reminded schools that the rules for awarding Federal Perkins Loans have changed and that they should be following the guidance in Dear Colleague Letter GEN-16-05 and ED’s Federal Perkins Loan Frequently Asked Questions (FAQ) when awarding Federal Perkins Loans in 2016-17. Specific reminders include the following:
- The school can award a Perkins Loan through September 30, 2017 to a current undergraduate student who has an outstanding balance on a Perkins Loan made by the school only if the school has already awarded the student the maximum Direct Subsidized Loan for which the student is eligible.
- The school can award a Perkins Loan through September 30, 2017 to a new undergraduate student who does not have an outstanding balance on a Perkins Loan made by the school only if the school has already awarded the student the maximum Direct Subsidized Loan and Direct Unsubsidized Loan amounts for which the student is eligible.
- In #1 and #2 above, if the current or new undergraduate student declines the Direct Subsidized Loan or Direct Unsubsidized Loan, the school cannot replace the declined amounts with Perkins Loan funds.
- If a current or new undergraduate student under #1 or #2 above changes grade levels, causing his or her Direct Loan eligibility to increase, the school must reduce or cancel the Perkins Loan amount due to the changes in Direct Loan eligibility even if the Perkins Loan has already been fully disbursed.
- If the school awards additional Direct Unsubsidized Loan funds to a new undergraduate student under #2 above due to a parent PLUS denial, the full amount of the additional Direct Unsubsidized Loan also must be included when determining the Perkins Loan amount. This includes adjusting or canceling any Perkins Loan already awarded or disbursed.
- A school can award a Perkins Loan through September 30, 2016 to an eligible graduate student who has received a Perkins Loan before October 1, 2015 if the student received his or her most recent Perkins Loan from the school for enrollment in an academic program at the school, and the Perkins Loan will enable the student to continue or complete the same academic program (first four digits of the CIP code) for which the student received his or her most recent Perkins Loan at the school.
- A graduate student may continue to receive a Perkins Loan if he or she changes from one degree objective to another degree objective that has the same CIP code; however, a student cannot receive a Perkins Loan as a graduate student for moving from an undergraduate program to a graduate program with the same CIP code.
- If the graduate student receives a Perkins Loan disbursement after June 30, 2016 and before October 1, 2016 for the 2016-17 award year, the student may still receive any subsequent disbursements on that loan through June 30, 2017.
All Perkins Loan Borrowers
- Effective December 18, 2015, the school or its designated Perkins servicer must make all of the additional disclosures outlined in GEN-16-05 for all Perkins Loans it makes.
- All schools must report any excess liquid capital in Part III, Section A, Line 30.2 on the next FISAP due September 30, 2016, as well as return those excess funds to ED. Sometime this Fall, ED will be communicating a new process for returning excess liquid capital after the FISAP is filed.
Refer to in GEN-16-05 and ED’s Federal Perkins Loan Frequently Asked Questions (FAQ) for additional guidance.
Publication Date: 7/27/2016