Posted Date:April 24, 2013
|Author:||William Leith, Service Director, Program Management, Federal Student Aid|
Subject: 2011-2012 Federal Perkins Loan Service Cancellation Reimbursement
Subpart D of the Federal Perkins Loan (Perkins Loan) Program regulations sets forth the conditions for service-based cancellation of borrowers’ Federal Perkins Loans. A Perkins Loan borrower may have all or part of his or her loan cancelled for certain employment 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, voluntary service, and additional service fields. Under the regulations at 34 CFR 674.63, the Secretary reimburses a school its share of the principal and interest cancelled during an award year under these provisions.
The Consolidated and Further Continuing Appropriations Act, 2013 (Pub. L. 113-6) appropriated funds for Fiscal Year 2013 for the Campus-Based programs. Pub. L. 113-6 did not allocate funds for 2011-2012 Federal Perkins Loan service cancellation reimbursements. As a result, there will be no reimbursement payments issued this year. However, we will calculate the 2011-2012 reimbursement payment for which a school would have been eligible to receive (using the process explained below) and maintain a record of that amount.
Calculation of a Perkins Loan Program Service Cancellation Reimbursement
There are two categories of reimbursement under the Perkins Loan Program:
Cancellations on loans made prior to July 1, 1972. The first category of loan cancellation reimbursement is a school's portion of principal and interest cancelled on loans made prior to July 1, 1972 under the National Defense Student Loan (Defense Loan) Program. This portion is calculated using the required matching percentage schools contributed for Defense Loans prior to 1972, which is approximately 10 percent for each school that cancelled loans in this category.
Cancellations on loans made on or after July 1, 1972. The second category of loan cancellation reimbursement is both the Federal and school portions of principal and interest cancelled on loans made on or after July 1, 1972 under the National Direct Student Loan (NDSL) and the Perkins Loan programs. Schools are entitled to reimbursement of the total amount cancelled.
As part of the calculation process, we are reviewing edit errors for the cancellation categories in the 2011-2012 data on the 2013-2014 Fiscal Operations Report (FISAP), Part III, Section A. If a school’s 2011-2012 data on the 2013-2014 FISAP has edit errors in this area, it may be contacted by the Campus-Based Call Center for resolution.
Reminder: Both reimbursement calculations are based on 2011-2012 information reported on the 2013-2014 FISAP (Part III, Section A, field 35 for the Defense Loan Program and fields 36 through 48 for the NDSL and Perkins Loan programs). If a school has questions about the reported amounts, the school should review its 2011-2012 data reported on its 2013-2014 FISAP on the Self-Service page of the eCB Web site.
If you have questions regarding the 2011-2012 Perkins Loan Service Cancellation Reimbursement, 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.