Posted Date: June 10, 2010

Author:  William Leith, Service Director, Program Management, Federal Student Aid

Subject: Federal Perkins Loan Portfolio Liquidation and Perkins Loan Assignment (Updated May 27, 2011)

This announcement has been superseded by an updated electronic announcement posted on August 5, 2011. Please refer to the updated announcement at http://ifap.ed.gov/eannouncements/080511CBPerkinsLiquidationAssignmentProc.html

May 27, 2011 Note: Effective April 1, 2011, the Nelnet Total and Permanent Disability Servicer will process and service all general (non veterans) total and permanent disability discharge assignments and referrals. For complete details, including links to updated contact information, refer to the Electronic Announcement posted on March 25, 2011. Effective June 1, 2011, the Nelnet Total and Permanent Disability Servicer will also process and service all veterans total and permanent disability discharge assignments and referrals. For complete details, including links to updated contact information, refer to the Electronic Announcement posted on May 27, 2011.

We also replaced the Assignment Procedures attachment.

September 16, 2010 Note: For detailed information about Total and Permanent Disability Assignments for Perkins Loans, schools should refer to the Electronic Announcement posted on September 10, 2011. On September 16, 2010, we updated the following Electronic Announcement to replace one of the attachments. We replaced the attachment titled "Federal Perkins Loan Assignment Procedures" to include updated information about Total and Permanent Disability Assignments.

This announcement and its attachments provide updated information about the required processes for liquidating a Federal Perkins Loan (Perkins Loan) portfolio when a school ends participation in the Perkins Loan Program as well as processes for assigning Perkins Loans to the U.S. Department of Education (the Department). The assignment form, as approved by the Office of Management and Budget (OMB), and instructions for the form are also included.

Note: The information in this announcement and its related attachments replaces the guidance last posted in CB-00-05 and CB-06-12.

Perkins Loan Portfolio Liquidation

A school must liquidate its Perkins Loan portfolio when:

  • the school voluntarily withdraws from the Perkins Loan Program,

  • the school is no longer advancing Perkins Loan funds to students, or

  • the school’s participation is terminated by the Department due to loss of eligibility or revocation of a provisional certification.

Additionally, if a school is closing and wishes to provide an orderly withdrawal from the Perkins Loan Program, these procedures may be followed in conjunction with the guidance provided by the Department of Education’s School Participation Team. A list of the Regional School Participation Teams is included as an attachment to this announcement.

Several steps must occur in order to liquidate a Perkins Loan portfolio. Step-by-step guidance for this process is provided in the attachment titled “Federal Perkins Loan Liquidation Procedures.”

Assignment of Perkins Loans to the Department

Perkins Loans may be assigned to the Department when a school:

  • chooses to assign defaulted Perkins loans after due diligence has still resulted in default,

  • assigns a loan to the Department after making an initial determination of borrower eligibility for a total and permanent disability discharge, and

  • is liquidating its Perkins Loan portfolio and assigns both defaulted and non-defaulted loans to the Department

Guidance for Perkins Loan Assignments is provided in the attachment titled “Federal Perkins Loan Assignment Procedures.”

Note:The ten schools that participated in the Income Contingent Loan (ICL) Program before it dissolved in 1993 may continue to assign any remaining Perkins Loans converted from ICL to the Department.

Perkins Loan Assignment Form

The Office of Management and Budget (OMB) has approved a revised version of the Perkins Assignment Form under OMB Control No. 1845-0048. The new expiration date is 08/31/2012. The new form replaces the previous version that has an expiration date of 06/30/2009.

The only substantive change to the previous version of the form is an updated address to which a school should write if the school has questions about the status of its submission of the form.

Contact Information

If you have questions about this announcement, contact the Campus-Based Call Center at 877/801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail CBFOB@ed.gov.

   

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