Note
On Jan. 12, 2023, we updated this Electronic Announcement to inform schools that this week, we sent the required notifications related to the 2022–23 Distribution of Assets process described below. Unfortunately, we have determined that the initial notifications sent on Jan. 10, 2023, via email and letters posted to the Common Origination and Disbursement (COD) System (found under the Perkins Distribution of Assets screen) were incorrect. The January 10 emails and letters can be ignored. We have issued corrected emails and letters on Jan. 11, 2023. We apologize for the inconvenience this issue may have caused.
Under Section 466(b), of the Higher Education Act of 1965, as amended (HEA), the U.S. Department of Education (the Department) will require a capital distribution from the institution’s Perkins Loan Revolving Fund (Perkins Fund) on an annual basis for institutions that continue participating in the Federal Perkins Loan Program. The Distribution of Assets from the Perkins Fund is part of the wind-down of the Federal Perkins Loan Program.
Note
Institutions should NOT remove and return any funds to the Department or the institution until the institution has been notified to do so.
The 2022–23 Distribution of Assets Notification Process
After the Fiscal Operations Report and Application to Participate (FISAP) is submitted through the Common Origination and Disbursement (COD) System by Sept. 30, 2022, the Department will notify institutions that have cash in the institution’s Perkins Fund subject to the distribution of assets process. The notification will communicate the amounts of funds, both the federal and institutional shares, that must be removed and returned to the Department and to the institution, respectively. Only the federal share the Department requests to be returned should be remitted through G5 by the deadline communicated in the notification.
Reimbursement for Perkins Loan Service Cancellations
The Department will also notify institutions of the amount of partial reimbursement for Perkins Loan service cancellations the institution must remove from the Perkins Fund and return to the institution prior to the deadline.
Distribution of Assets and Reimbursement for Perkins Loan Service Cancellation Calculations
Determination of an institution’s Distribution of Assets uses the Proportional Share formula and information from the institution’s most recently submitted FISAP. The calculation accommodates both the changes in the Institutional Capital Contribution (ICC) matching requirements that have occurred over time and any overmatching of funds by the institution. The calculation also takes into consideration any Federal Capital Contribution (FCC) that had been previously returned by the institution to the Department and any ICC that was previously repaid to the institution from the Perkins Fund. If your institution determines that any of the items used in the calculation was misreported on your submitted FISAP, corrections should be made prior to the Dec. 15, 2022, corrections deadline.
Determination of the institution’s amount of partial service cancellation reimbursement uses 2021–22 cancellation data as reported on the FISAP. This process takes into consideration any prior reimbursement for service cancellations.
The Calculations
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Cash on Hand in the Perkins Fund (FISAP, Part III, Sec A, Line 1.1)
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Proportional Share Percentages are now calculated and displayed on the FISAP in the new Section F of Part III
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Institutional Share to Be Returned to the institution is the total Cash on Hand multiplied by the Institutional Share Percentage
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Partial Reimbursement for Service Loan Cancellation is the institutional share amount determined by the Department using the institution’s 2021–22 cancellations data as reported on the FISAP submitted on Sept. 30, 2022
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Federal Share to be Returned to the Department is the total Cash on Hand, minus the institutional share owed, minus the amount of partial service cancellation reimbursement determined by the Department
Institutions are only permitted to charge to the Perkins Fund allowable costs incurred in collection of the principal and interest on loans not already reimbursed from the Perkins Fund or from payments by the borrower. You may refer to 34 CFR 674.47(e) for the limitations on costs charged to the Fund.
Contact Information
If you have questions about the information in this announcement, contact the FSA Partner and School Relations Center at 1-800-848-0978. You may also email CODSupport@ed.gov.