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(Campus-Based) Subject: 2012-2013 Federal Perkins Loan Service Cancellation Reimbursement

Posted Date:May 13, 2014

Author: Sue O'Flaherty, Service Director, Program Management, Federal Student Aid

Subject: 2012-2013 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, volunteer service, and additional service fields. Under the regulations at 34 CFR 674.63, the Secretary reimburses a school for all or part of the principal and interest cancelled during an award year under these provisions.

The Consolidated Appropriations Act, 2014 (Pub. L. 113-76) enacted on January 17, 2014 appropriated funds for Fiscal Year 2014 for the Campus-Based programs. Pub. L. 113-76 did not allocate funds for 2012-2013 Federal Perkins Loan service cancellation reimbursements. As a result, there will be no reimbursement payments issued this year. However, we will calculate the 2012-2013 reimbursement payment for which a school would have been eligible to receive (using the process explained below) and maintain a record of that amount.

Reminder: Although Federal Perkins Loan service cancellations are not funded, schools must still offer and apply applicable cancellations to borrowers.

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.

Reminder: Both reimbursement calculations are based on 2012-2013 information reported on the 2014-2015 Fiscal Operations Report (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 2012-2013 data reported on its 2014-2015 FISAP on the Self-Service page of the eCampus-Based (eCB) Web site.

As part of the calculation process, we are reviewing edit errors for the cancellation categories in the 2012-2013 data on the 2014-2015 FISAP, Part III, Section A. If a school’s 2012-2013 data on the 2014-2015 FISAP has edit errors in this area, it may be contacted by the Campus-Based Call Center for resolution.

Contact Information

If you have questions regarding the 2012-2013 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

Last Modified: 05/12/2014