The expiration of the Perkins Loan Program will impact financial accounting and reporting at higher education institutions, whether they follow Financial Accounting Standards Board (FASB) or Governmental Accounting Standards Board (GASB) standards. Consequently, NACUBO’s Advisory 18-03, Perkins Loan Program Close-Out, has been updated to address FASB and GASB matters.
Originally released in July, NACUBO’s advisory report includes considerations for deciding whether to continue to service Perkins Loans or transfer them to the federal government and the steps required to execute either option. It now also includes information on circumstances that impact financial reporting. The updated report contains a dedicated appendix for independent and public institutions.
For institutions that follow FASB, financial reporting will depend on whether an operating measure is displayed on the Statement of Activities. For institutions that follow GASB, financial reporting depends on a combination of the following: whether the Federal Capital Contribution is considered a liability or part of net position, the requirements in Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, and materiality.
An Excel workbook is also available to quantify the costs and benefits of retaining an institution's Perkins portfolio.