Perkins Loan Closeout – Assignment Extension
As part of the wind down of the Perkins Loan Program, the Department of Education (ED) requires institutions to assign to the Department all Perkins Loans that have been in default for more than two years. Unless the school has documentation that these borrowers are making payments toward their Perkins loan debt, you are required to assign all Perkins Loans in default for more than two years to the ED. The previous deadline of June 30, 2022, has been extended to June 30, 2023.
ED provides guidance on the Perkins loan assignment process in the Perkins Assignment and Liquidation Guide. ED will provide a school with the reason why any loan is rejected for assignment. If the school can resolve that issue(s), the loan can be resubmitted for assignment. In instances when an issue cannot be resolved and assignment is not possible, the school must purchase that loan.
Federal regulations state that ED may require a school to reimburse its Federal Perkins Loan Program Fund for the entire amount of the outstanding principal balance, plus any accrued interest on loans ED determines to be unenforceable.
ED reminded schools that although the Perkins Loan Program is winding down, they remain obligated to ensure all collection procedures, outlined in the regulations, are being followed.