Posted Date:September 12, 2014
|Author:||Sue O'Flaherty, Service Director, Program Management, Federal Student Aid|
Subject: Federal Perkins Loan Program Processing and Reporting Requirement Reminders
As a reminder to all schools that participate in the Federal Perkins Loan (Perkins Loan) Program, we are providing the following key program requirements concerning administrative responsibilities and reporting requirements.
Key Perkins Loan Program Processing and Reporting Requirements
Use of Funds: As part of a school's program participation under 34 CFR 674.8(b), the school shall use the money in its Perkins Loan Revolving Fund only for:
Making loans to students;
Administrative expenses (if it makes loans to students);
Capital distributions (liquidation or return of excess liquid capital);
Other collection costs, agreed to by the Secretary in connection with the collection of principal, interest, and late charges on a loan made from its fund (see 34 CFR 674.47); and
Repayment of any short-term, no-interest loans made to its Perkins Loan Revolving Fund by the institution in anticipation of collections.
Due Diligence: Under the due diligence general requirements, 34 CFR 674.41(b), schools are required to have a process for coordinating between the offices that are responsible for billing and collecting loans or the servicing of its Perkins Loan portfolio. Due diligence requirements also apply to third-party servicers, if a school uses one.
Reporting to NSLDS: Schools and third-party servicers are required to report new loans or update data on existing loans to the National Student Loan Data System (NSLDS). Please be reminded of the following:
It is ultimately the school's responsibility to ensure that its required reporting to NSLDS (which includes Perkins loan account detail) is completed timely and accurately. Schools that use a third-party servicer must communicate the reporting requirements to its third-party servicer and ensure that its servicer complies with timely and accurate reporting. It is important for schools to understand that they will be responsible for any non-compliance by the servicer.
Perkins Loan reporting includes enrollment data for each loan. Although funding may be at the main location of the school's 8-digit OPEID, the actual location where the student is attending classes is to be reported in the Code for Current School (NSLDS Perkins Data Provide Instructions (DPI), Field Code #286) for each loan record in the data extract file submitted to NSLDS. This ensures that the student is placed on the correct enrollment reporting roster and eliminates misreporting when the student is not attending classes at the main location.
For purposes of Perkins Loan liquidation and closeout, schools must ensure that NSLDS reflects that all borrower loan accounts are fully retired, accepted for assignment by the Department, or purchased by the school.
In some cases, a school may need to request a reconciliation report from NSLDS to ensure its records are consistent with NSLDS, reconcile any discrepancies, and update NSLDS accordingly. It is recommended that all schools complete this reconciliation with NSLDS at least every six months.
To request the NSLDS reconciliation file, call the NSLDS Customer Support Center at 800/999-8219. If the school intends to liquidate, please also inform NSLDS when the reconciliation file is requested.
Until the Department accepts a loan for assignment and is able to successfully report on the loan to NSLDS, the loan is still the responsibility of the school. The school will receive an acceptance letter when the loan is accepted for assignment by the Department. At that time, the school must report the loan to NSLDS as transferred for assignment using the "AE" Code for Loan Status (NSLDS Perkins DPI, Field Code #263) and the assignment form's "certification date" as the Date of Loan Status (NSLDS Perkins DPI, Field Code #262).
Information about how to award Perkins Loans and about managing your Perkins Loan Program portfolio is documented in Volume 6 of the Federal Student Aid Handbook, available on the Information for Financial Aid Professionals (IFAP) Web site.
Regulations governing the Perkins Loan Program are at 34 CFR 674.
The Federal Perkins Data Provider Instructions are available on the IFAP Web site. Note: The current instructions (dated October 2007) are scheduled to be updated in the near future and will be posted in the iLibrary section under "NSLDS Reference Materials – Federal Perkins Data Provider Instructions." When the updated instructions are available, we will inform the community through an Electronic Announcement.
If you have questions about the information provided in this announcement, 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.
If you have questions specific to NSLDS data entry, access, use, or reports, please contact NSLDS Customer Support Center at 800/999-8219 or e-mail NSLDS@ed.gov.