Assignment of Perkins Loans

August 31, 2021 · by Wes · Spark Notes

On Friday, August 27, the Department of Education issued a notice regarding the assignment of Perkins Loans that have been in default for more than two years.  As you know, over the past several years, the Department through Federal Student Aid (FSA) has stepped up their efforts to require schools to assign defaulted Perkins Loans to the Department.  COHEAO has provided guidance on these efforts supporting FSA’s announcements to assist institutions with compliance.  The FSA efforts initially focused on those schools that had a large percentage of Perkins loans in default – first reaching out to institutions with 75% or more of their loans in this status, followed by those with 50% or greater in default for more than two years.  Friday’s announcement addresses all schools and establishes a deadline that all Perkins loans more than two years in default be assigned by June 30, 2022.

 

COHEAO is reaching out to the Department, via FSA, to ask several clarifying questions as we recognize that this policy change may be difficult for many institutions to meet.  As we receive further information, please be assured that COHEAO will update its members.  In the meantime, we want to stress that following previous COHEAO guidance on what actions institutions should take is prudent.  In summary, schools should develop and implement an institutional plan now for how loans will be assigned to the Department, assigning the oldest, non-performing loans first and then continuing by age of default.

 

Please complete the following survey regarding your willingness to participate in COHEAO’s lobbying efforts on this issue.

 

Below are links to the August 27th notice from FSA, a previous COHEAO Spark on this topic, and an April 16, 2021 part 1 webinar with part 2 from the 2021 Spring Workshop.

 

FSA Notice:  https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2021-08-27/federal-perkins-loan-program-updated-guidance-mandatory-assignment-federal-perkins-loans-default-more-two-years-ea-id-general-21-53

 

COHEAO Spark:  http://www.coheao.com/information-guide-on-assignment-of-perkins-student-loans/

 

COHEAO webinars:  

 

Should you have any questions, please do not hesitate to contact COHEAO Executive Director, Robert Moran, by email at rmoran@bosepublicaffairsgroup.com.

 

 

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