Posted Date: May 12, 2011

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

Subject: 2009-2010 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 a Perkins Loan. Under these conditions, a Perkins Loan borrower may have all or part of his or her loan cancelled for engaging 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, voluntary service, and additional service fields. Under 34 CFR 674.63, the Secretary reimburses a school its share of principal and interest cancelled during an award year.

The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P. L. 112-10) was enacted on April 15, 2011 and provided final Fiscal Year 2011 appropriations for the Campus-Based programs. P.L. 112-10 did not allocate funds to the Department of Education to issue 2009-2010 Federal Perkins Loan Service Cancellation Reimbursements. As a result, there will be no reimbursement payments issued this year. However, we will calculate the 2009-2010 reimbursement payment for which a school would have been eligible to receive (using the process explained below) and maintain a record of that amount.

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 a school's portion of principal and interest cancelled on loans made prior to July 1, 1972 for the National Defense Student Loan (Defense Loan) Program. This portion is calculated using the required matching percentage schools contributed for Defense Loans prior to 1972, which is approximately 10 percent for each school 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 school portions of principal and interest cancelled on loans made on or after July 1, 1972 for the National Direct Student Loan (NDSL) and the Perkins Loan programs. Schools are entitled to reimbursement of the total amount cancelled.

As part of the calculation process, we are reviewing edit errors for the cancellation categories in the 2009-2010 Fiscal Operations Report (FISAP), Part III, Section A. If a school’s 2009-2010 FISAP has edit errors in this area, it may be contacted by the Campus-Based Call Center for resolution.

Reminder: Both reimbursement calculations are based on information reported in the 2009-2010 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 a school has questions about the reported amounts, the school can review its 2009-2010 FISAP on the Self-Service page of the eCB Web site.

Contact Information

If you have questions regarding the 2009-2010 Perkins Loan Service Cancellation Reimbursement, 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


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