Posted Date:October 5, 2012
|Author:||William Leith, Service Director, Program Management, Federal Student Aid|
Subject: Federal Perkins Loan Portfolio Liquidation and Assignment Procedures
This announcement has been superseded by an updated electronic announcement posted on April 19, 2013. Please refer to the updated announcement at 041913PerkinsLiquidationAssignProceduresApril2013.html.
This announcement and its attachments provide updated information about the required processes for the liquidation of a school's Federal Perkins Loan (Perkins Loan) portfolio when the school ends its participation in the Perkins Loan Program. It also provides updated procedures to be used for when a school assigns Perkins Loans to the Department of Education (the Department) for any reason.
Changes have been made to both the Perkins Loan liquidation procedures and assignment procedures. In most cases, the changes to the Perkins Loan written procedures further clarify the processes or provide additional detail. In some instances we've changed what is required of schools for the purposes of liquidating and assigning loans to the Department. The information in this announcement and its attachments replaces the guidance last posted in an August 5, 2011 Electronic Announcement.
Attached to this letter are revised versions of the Federal Perkins Loan Liquidation Procedures and the Federal Perkins Loan Assignment Procedures.
Perkins Loan Liquidation
A school must liquidate its Perkins Loan Revolving Fund and its Perkins Loan Portfolio, following the guidance and procedures included in the attachment, titled "Federal Perkins Loan Liquidation Procedures", when the school:
Voluntarily withdraws from the Perkins Loan Program;
Is no longer advancing Perkins Loan funds to students;
Has had its eligibility to participate in the Perkins Loan Program terminated by the Department;
Several steps must occur in order to liquidate a Perkins Loan portfolio and complete the closeout of the program. Assigning loans to the Department is just one step in the process. A school is not considered liquidated unless it has received an official letter of completion from the Department.
Assignment of Perkins Loans to the Department
A school assigns Perkins Loans to the Department, following the guidance and procedures included in the attachment, titled "Federal Perkins Loan Assignment Procedures". A Perkins Loan must be assigned to the Department when the school:
Chooses to assign a defaulted Perkins Loan after due diligence has not resolved the default;
Chooses to assign a Perkins Loan when a determination has been made that the borrower is eligible for a total and permanent disability discharge;
Is liquidating its Perkins Loan portfolio and assigns both defaulted and non-defaulted loans to the Department.
Note: Until the new Federal Perkins Loan Program/NDSL Assignment Forms receive Office of Management and Budget (OMB) approval, the existing forms are still in effect and should be used. We will update this Electronic Announcement with the approved forms once we have received OMB approval.
If you have questions about the information provided in this letter and its attachments, contact the Campus-Based Call Center at 877/801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail CBFOB@ed.gov.