Posted Date: May 4, 2018

Author:  Federal Student Aid

Subject: 2016–17 Federal Perkins Loan Service Cancellation Reimbursement

Subpart D of the Federal Perkins Loan (Perkins Loan) Program regulations sets forth the conditions for service-based cancellation of borrowers’ Federal Perkins Loans. A Perkins Loan borrower may have all or part of his or her loan cancelled for certain employment in teaching, military service, law enforcement or corrections officer service, service as a nurse or medical technician, Head Start service, service to certain types of high-risk children, volunteer service, and additional service fields. Under the regulations at 34 CFR 674.63, the Secretary reimburses an institution for all or part of the principal and interest cancelled during an award year under these provisions.

The Consolidated Appropriations Act, 2018 (Pub. L. 115-141) enacted on March 23, 2018 appropriated funds for Fiscal Year 2018 for the Campus-Based programs. Pub. L. 115-141 did not allocate funds for 2016–17 Federal Perkins Loan service cancellation reimbursements. As a result, there will be no reimbursement payments issued this year. Schools are not permitted to use funds from the Revolving Fund to reimburse themselves for cancellations. However, we will calculate the 2016–17 reimbursement payment for which an institution would have been eligible to receive (using the process explained below) and maintain a record of that amount. Reminder: Although Federal Perkins Loan service cancellations are not funded, institutions must still offer and apply applicable cancellations to borrowers.

Calculation of a Perkins Loan Program Service Cancellation Reimbursement

There are two categories of reimbursement under the Perkins Loan Program:

  • Cancellations on loans made prior to July 1, 1972. The first category of loan cancellation reimbursement is an institution's portion of principal and interest cancelled on loans made prior to July 1, 1972 under the National Defense Student Loan (Defense Loan) Program. This portion is calculated using the required matching percentage institutions contributed for Defense Loans prior to 1972, which is approximately 10 percent for each institution that cancelled loans in this category.

  • Cancellations on loans made on or after July 1, 1972. The second category of loan cancellation reimbursement is both the federal and institution portions of principal and interest cancelled on loans made on or after July 1, 1972 under the National Direct Student Loan (NDSL) and the Perkins Loan programs. Institutions are entitled to reimbursement of the total amount cancelled.

Reminder: Both reimbursement calculations are based on 2016–17 information reported on the 2018–19 Fiscal Operations Report (FISAP) (Part III, Section A, field 35 for the Defense Loan Program and fields 36 through 48 for the NDSL and Perkins Loan programs). If an institution has questions about the reported amounts, the institution should review its 2016–17 data reported on its 2018–19 FISAP on the Common Origination and Disbursement (COD) Web Site.

As part of the calculation process, we are reviewing validation errors for the cancellation categories in the 2016–17 data on the 2018–19 FISAP, Part III, Section A. If an institution’s 2016–17 data on the 2018–19 FISAP has validation errors in this area, the institution may be contacted by the COD School Relations Center for resolution.

Contact Information

If you have questions regarding the 2016–17 Perkins Loan Service Cancellation Reimbursement, contact the COD School Relations Center at 1-800-848-0978. You may also email


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