Posted Date:June 24, 2016
|Author:||Sue O'Flaherty, Service Director, Program Management, Federal Student Aid|
Subject: Perkins Loan Program - Excess Liquid Capital Process Change
In accordance with Section 466(c) of the Higher Education Act, institutions are required to return to the Department of Education (Department) the Federal share of any Excess Liquid Capital (ELC) in the institution’s Federal Perkins Loan Revolving Fund. ELC is the amount of the Fund’s “Cash On Hand” that is in excess of the institution’s estimated need for Perkins Loan funds. As a reminder, this statutory requirement for institutions to return ELC is not directly related to the wind-down of the Perkins Loan Program.
Last year we established the process for identifying ELC and the process for institutions to use to return the Federal share of any ELC to the Department. The process for informing Federal Perkins Loan Program participating institutions that there is Excess Liquid Capital in their Perkins Loan Revolving Fund will be modified based on information institutions will report on their next FISAP that is due September 30, 2016.
We will be informing the community, prior to the September 30, 2016 FISAP due date, how the Department will calculate ELC and the process by which institutions will be required to remit the Federal share of any calculated Perkins ELC to the Department. We anticipate this modified process will simplify efforts for institutions determined to have Excess Liquid Capital in their Perkins Loan Revolving Fund and facilitate the return of the Federal share of such funds to the Department.
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 us at CBFOB@ed.gov.