Federal Perkins Loan Frequently Asked Questions

These Frequently Asked Questions provide information and operational guidance on the Perkins Loan Program. The listing of Frequently Asked Questions will be updated periodically and include the date of the update. New and/or updated questions and answers will be marked NEW.

If you have policy questions that have not been addressed, submit them to Bruce Honer at Bruce.Honer@ed.gov. For non-policy related questions, please contact the COD School Relations Center at CODSupport@ed.gov.

The questions below are grouped by the follow categories:

- General [GEN]

- Awarding [AWD]

- Assignment of Loans [ASN]

- Revolving Fund [RVL]

- Other [OTH]

As explained in Dear Colleague Letter GEN-16-05, the Extension Act eliminated the Perkins Loan grandfathering provisions that were previously announced in Dear Colleague Letter GEN-15-03 and provided the new eligibility requirements. The new eligibility requirements for undergraduate and graduate students are detailed in the Authority to Make Loans section of the Dear Colleague Letter GEN-16-05. [May 2, 2016]

Yes. An institution may award Perkins Loans on or after December 18, 2015 for both the 2015-2016 and 2016-2017 award years as long as the student meets the Perkins Loan eligibility requirements provided in Dear Colleague Letter GEN-16-05. Those requirements include but are not limited to the following:

  • Undergraduate Students - An institution may award a Perkins Loan to an otherwise eligible undergraduate student through September 30, 2017 (2015-2016 and 2016-2017 award years).

  • Graduate Students - An institution may award a Perkins Loan through September 30, 2016 only to a graduate student who has received a Perkins Loan from that institution as a graduate student before October 1, 2015 to enable the graduate student to continue or complete the academic program in which they received their most recent Perkins loan. [May 2, 2016]

Yes. An undergraduate student, who receives a disbursement of a Perkins Loan before October 1, 2017 for the 2017-2018 award year, may receive any remaining disbursements of that 2017-2018 award year loan. [May 2, 2016]

Yes. A graduate student who receives a disbursement of a Perkins Loan before October 1, 2016 for the 2016-2017 award year, may receive any remaining disbursements of that 2016-2017 award year loan. [May 2, 2016]

Yes, only if the institution includes the portion of the loan that will be disbursed for the summer, 2018 session as part of the 2017-2018 award year loan for which the borrower received at least one disbursement before October 1, 2017. The institution does this by increasing the loan amount and extending the loan’s loan period. [May 2, 2016]

For purposes of determining Perkins Loan eligibility, a current undergraduate student is a student, who, on the date of disbursement of a new Perkins Loan, is a current Perkins Loan borrower who has an outstanding balance on a Perkins Loan made by that school.

For purposes of determining Perkins Loan eligibility, a new undergraduate student is a student, who, on the date of disbursement of a new Perkins Loan, is a new Perkins Loan borrower that does not have an outstanding balance on a Perkins Loan made by that school. [May 2, 2016]

No. For purposes of awarding Perkins Loans to undergraduate students, an outstanding balance on a Perkins Loan awarded by another school does not affect whether the borrower is considered a “current undergraduate student” or a “new undergraduate student” at your school. [May 2, 2016]

Yes. A student who was awarded a Direct Subsidized Loan can decline the Direct Subsidized Loan or reduce the amount of that loan, as long as the amount of the awarded Direct Subsidized Loan is included in the calculation of the student’s Perkins Loan award. [May 2, 2016]

A student who was awarded a Direct Subsidized Loan and a Direct Unsubsidized Loan can decline or reduce those loan amounts, as long as the amounts of the awarded Direct Subsidized Loan and the Direct Unsubsidized Loan are included in the calculation of the student’s Perkins Loan amount. [May 2, 2016]

Yes. An otherwise eligible student who has reached his or her annual or aggregate Direct Subsidized and Direct Unsubsidized loan limits would be eligible to receive a new Perkins Loan because the student has received the maximum Direct Subsidized and/or Direct Unsubsidized Loans for which the student is eligible. This applies for any other reason why the student is not eligible for some or all of Direct Loans (e.g., exceeded 150% Direct Subsidized Loan Limit). [May 2, 2016]

Yes. Longstanding guidance for the Perkins Loan Program provides that institutions may establish in their packaging policies priority groups for the awarding of Perkins Loans. [May 2, 2016]

Yes. An institution is allowed to establish its own packaging policy, as long as that policy is consistently applied and within the parameters established by the Perkins Loan Extension Act, as described in DCL GEN-16-05. [May 2, 2016]

The institution can choose to either adjust the Perkins Loan or adjust the Direct Subsidized or Direct Unsubsidized Loans to the maximum revised eligibility to resolve the overaward. This assumes that the institution has taken all steps to resolve the overaward before reducing loans, including replacing all or a portion of expected family contribution (EFC) with Direct Unsubsidized Loan, as explained in Q&A AWD-13. [May 2, 2016]

Yes, if the institution chooses to use some of the Direct Unsubsidized Loan as a replacement for the student’s EFC. Since the requirement is that the institution award the student his or her maximum Direct Loan eligibility prior to awarding the student a Perkins Loan, when determining the student’s maximum Direct Loan eligibility the institution may count only the portion of the Direct Unsubsidized Loan that is not used to replace EFC against the student’s unmet need for the Federal Perkins Loan. [May 2, 2016]

Yes. Once the undergraduate borrower has received his or her first Perkins Loan at an institution and continues to have a balance on his or her Perkins Loan, the borrower would be considered a current student for the purposes of awarding additional Perkins Loans. For example, an undergraduate student (with no outstanding balance) was awarded a Perkins Loan for the 2015-2016 award year as a new Perkins Loan borrower. The student returns in the fall of 2016 and is awarded a Perkins Loan as a current Perkins Loan borrower. The borrower would also be considered a current borrower if the borrower received a new Perkins Loan in the summer of 2016 and continued to have an outstanding balance on his or her Perkins Loan made by that institution. [June 1, 2016]

Yes. As indicated in Dear College Letter GEN-16-05, a new undergraduate Perkins Loan borrower must be awarded the maximum amount of Direct Unsubsidized Loan funds for which the student is eligible. This student’s eligibility would include the additional Direct Unsubsidized funds that are received as a result of a parent’s denial of a PLUS Loan. [June 1, 2016]

Yes. The annual maximum Direct Subsidized and Direct Unsubsidized Loan eligibility for which the student is eligible must be considered in determining the student’s eligibility for a Perkins Loan as long as all other eligibility criteria have been met. In some instances, the institution may be required to reduce a Perkins Loan that has already been disbursed because the subsidized and/or unsubsidized loan eligibility has increased. [June 1, 2016]

Yes. The institution must re-evaluate the student’s eligibility for the Perkins Loan even if all or part of it had been disbursed. The annual maximum Direct Subsidized and Direct Unsubsidized Loan eligibility for which the student is eligible, including the amount of the additional unsubsidized loan due to the PLUS loan denial, must be considered by the institution when determining the student’s eligibility for a Perkins Loan. Thus, the institution may need to reduce or cancel the Perkins Loan, including any amounts that had already been disbursed because the student’s Direct Loan eligibility has increased. [June 1, 2016]

No. A graduate student can receive a new Perkins loan only if the student received a Perkins Loan from the institution as a graduate student before October 1, 2015 and if the student is continuing or completing the same academic program for which the most recent Perkins Loan was received. In this case, the student’s graduate program is, by definition, a different program than the student’s undergraduate program. [June 1, 2016]

No. An institution is not permitted to make a Perkins Loan disbursement after June 30, 2018 for a prior year’s crossover summer term. [October 17, 2016]

No. Consistent with longstanding policy, institutions relinquish all their rights and share in any Perkins Loan that is assigned to the Department. Therefore, none of the funds collected by the Department on an accepted assignment will be returned to the institution that assigned the loan to the Department. [May 2, 2016]

No. This statutory requirement for institutions to return ELC is not related to the wind-down of the Perkins Loan program. Section 466(c) of the Higher Education Act requires institutions to return to the Department the Federal share of any Excess Liquid Capital in the institution’s Federal Perkins Loan Revolving Fund. Institutions are required to return the Federal share of the Excess Liquid Capital every year. [May 2, 2016]

The Department will be providing details about the return of the Federal share of institutions’ Perkins Loan Revolving Funds at a later time. [May 2, 2016]

No. The disclosures do not affect the terms and conditions of a Perkins Loan, so the Department is not revising the Master Promissory Note to include the required new disclosure statements. It is the institution’s responsibility to provide the disclosures prior to the first disbursement of each Perkins Loan. [May 2, 2016]

No. The Department has no plans to provide a template or to develop model language for the new required disclosures. [May 2, 2016]

No. Institutions are not required to provide the new disclosure statements prior to every disbursement. Institutions must provide all of the disclosures required in the regulations at 34 CFR 674.16 and all of the new disclosures required by the Perkins Loan Extension Act of 2015 before the institution makes the first disbursement of each Perkins Loan. For example, an institution that provides the disclosure statements to the student at the beginning of the award year, prior to the first disbursement of the Perkins Loan, would not be required to provide the disclosure statements upon each subsequent disbursement of that Perkins Loan. [May 2, 2016]

No. The Federal Perkins Loan Extension Act of 2015 prohibits any further automatic extensions of the Perkins Loan Program under section 422(a) of GEPA.[May 2, 2016]

Yes. Institutions will continue to be able to use the ACA funds generated from any of their campus-based expenditures to pay for the servicing of Perkins Loans. [May 2, 2016]