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(CB-03-08) Federal Perkins Loan Service Cancellation Reimbursement

Publication Date: June 2003

DCL ID: CB-03-08

Federal Perkins Loan Service Cancellation Reimbursement


Posted on 06-06-2003


June 2003

CB-03-08

SUBJECT: Federal Perkins Loan Service Cancellation Reimbursement

SUMMARY: This letter pertains to the 2001-2002 Federal Perkins Loan Service Cancellation Reimbursement and Payment Letter

REFERENCE: "Perkins Loan" Volume 5 of the 2001-2002 Federal Student Aid Handbook

Dear Partner:

This letter contains a series of questions and answers relating to payment letters and worksheets for reimbursement of service cancellations in the Perkins Loan Program. Under certain conditions, a Federal Perkins Loan borrower may have all or part of his or her loan cancelled for engaging in teaching, military service, law enforcement or corrections officer service, service as a nurse or medical technician, Head Start service, service to certain types of high-risk children, and voluntary service.

Questions and Answers

Q. Will I be able to find my service cancellation payment letter and worksheet on the web?

A. Approximately two weeks before the payments are sent, we will post your service cancellation payment letter and worksheet to the campus-based web site. You will be able to view and print the documents by logging on to the campus-based web site at http://www.cbfisap.sfa.ed.gov. Your service cancellation payment letter and worksheet will be posted in the Campus-Based Notification section.

Q. When will you issue the service cancellation reimbursement?

A. We will issue your payment in June 2003 by electronic funds transfer to the Bank account your institution designated.

Q. Will I receive one or two electronic fund transfer (EFT) payments?

A. You will receive one electronic fund transfer payment for your Federal Perkins Loan service cancellation reimbursement. Your scheduled payment will automatically be deposited in your existing account(s) from the Department of Education Grant Administration and Payment System (GAPS).

Q. How did you calculate the amount for service cancellation reimbursement?

A. The school service cancellation worksheet reflects the calculation amounts under the National Defense Student Loan Program (Defense Loans) and for the National Direct Student Loan (NDSL) and Federal Perkins Loan programs, reimbursement categories. For Defense Loans, schools are entitled to receive a portion of the amount cancelled for loans made prior to July 1, 1972. This figure is not calculated, but is carried over from a previous year. While the number varies slightly, it is approximately 10% for each school. For NDSL and Perkins loans, schools are entitled to reimbursement of the total amount canceled for principal and interest on loans made on or after July 1, 1972.

Q. What must I do with cancellation reimbursement funds sent to my school?

A. The portion of your reimbursement that represents cancellations of Defense Loans (Line 8 of the Worksheet) belongs to your school and may be used for any purpose. The portion of your reimbursement that represents NDSL and Perkins cancellations (Line 19 of the Worksheet) must be deposited into your institutional Perkins Loan fund and can only be used for advances to borrowers and for other allowable uses.

Q. What portion of the service cancellation reimbursement do I report on the FISAP?

A. Line 19 of your current service cancellation worksheet represents reimbursement of both the federal and school portion of principal and interest canceled on loans made July 1, 1972, and after for the NDSL and Perkins programs. This portion of the reimbursement must be deposited into the Perkins Loan fund account and must be included in Part III, Section A, field 25 of your Fiscal Operations Report for the Award Period ending June 30, 2003, to be submitted by October 1, 2003.

Q. Will I receive the full amount to which I am entitled this year?

A. Due to insufficient funds in the Fiscal Year 2003 appropriation, you will receive less than 100 percent of the reimbursement due. The reimbursement calculation is based on information contained in your 2001-2002 Fiscal Operations Report and edit corrections.

Q. Who do I contact if I have questions?

A. Federal Perkins Loan service cancellation questions should be directed to the Campus-Based Call Center, toll free, at (877) 801-7168.

Sincerely,

Richard Coppage, Acting Director
Campus-Based Operations
Schools Channel

Last Modified: 06/05/2003