Guidance on Assignments and Liquidation of Perkins Loan Program Released
June 16, 2010
The Department of Education has provided detailed guidance to institutions on procedures for assigning Perkins loans to ED, including new forms to use to do so. Steps involved in liquidating an institution's revolving loan portfolio when a college or university ceases participation in the Perkins Loan program are also covered.
Institutions may assign a Perkins loan to ED for several reasons: because it is in default and collection efforts are stymied; when the institution has made an initial determination that the borrower is eligible for a total and permanent disability discharge; or when liquidating its portfolio. Once a loan is assigned to ED, ED will attempt further collections but any loan payments received will be retained by the federal government. The institution will no longer have any responsibility for the loan.
The June 10 electronic announcement provides links to detailed step-by-step instructions and forms.
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