Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Federal Perkins Loan Program - Table of Contents

AwardYear: 1995-1996
EnterChapterNo: 6
EnterChapterTitle: Federal Perkins Loan Program
SectionNumber:
SectionTitle: Table of Contents
PageNumbers:


INTRODUCTION.....1
Final Rule, November 30, 1994.....1
"Dear Colleague" Letters About the 1994 Floods.....5
Participation Agreement and Federal Perkins Loan Fund.....6
Allocation of Funds--Federal Capital Contribution.....7

SECTION ONE: STUDENT ELIGIBILITY.....9
Willingness to Repay as an Eligibility Criteria.....10
Loan Availability.....11
Payment to Student Who Drops Out.....11

SECTION TWO: MAKING & DISBURSING LOANS.....13
Loan Maximums.....13
Counseling Students.....15
The Promissory Note.....17
School Designed Note.....18
Disbursing Funds.....20

SECTION THREE: REPAYMENT.....25
Grace Periods.....25
Grace Period for Borrower Attending Less Than Half Time.....26
Prepayment.....28
Repayment Plan.....28
Repayment Schedule.....29
Developing a Repayment Schedule.....29
Establishing Repayment Dates.....31
Interest Rates for Loans Made Before 10/1/81.....32
Minimum Monthly Repayment Amounts.....32
Length of Repayment Period.....34
Extension of Repayment for a Low Income Individual.....34
Disposition of Promissory Note and Repayment Schedule.....36

SECTION FOUR: FORBEARANCE AND DEFERMENTS.....37
Forbearance.....37
Deferment.....38
In School Deferment.....39
Deferment of Federal Perkins Loans and NDSLs Made on or
After 7/1/93.....39
Economic Hardship Deferment.....40
Deferment of Federal Perkins Loans Made Before 7/1/93.....43
Deferment of NDSLs Made Between 10/1/80 and 7/1/93.....46
Deferment vs. Postponement for Service That Will
Qualify for Loan Cancellation.....48
The Concurrent Deferment Period.....48
Deferment and Default.....49
Deferment vs. In School Enrollment Status.....49

SECTION FIVE: CANCELLATION.....51
Common Cancellation Procedures.....52
Cancellation Provisions Common to All Federal Perkins
Loans and NDSLs Made After 7/1/87.....53
Law Enforcement Cancellation Provision--Specific to
Loans Made on or After November 29, 1990.....54
Cancellation Provisions Specific to Federal Perkins
Loans and NDSLs Made on or After 7/23/92.....54
"Area of Hostilities" Military Service Cancellation
Provision--Applies to All Loans Made on or After 7/1/72.....55
Cancellation Provisions Specific to Federal Perkins Loans.....56
Death, Total and Permanent Disability, and Bankruptcy
Cancellation Provisions--Applicable to All Loans.....56
Criteria Borrower Must Meet for Teacher Cancellation.....56
Criteria Borrower Must Meet for Military Cancellation.....60
Criteria Borrower Must Meet for Head Start Cancellation.....60
Criteria Borrower Must Meet for Law Enforcement or
Corrections Officer Cancellation.....60
Criteria Borrower Must Meet for Disability Cancellation.....61
Criteria for Receiving a Bankruptcy Cancellation 62
Reimbursing Amounts Cancelled.....62
Definitions.....62

SECTION SIX: DUE DILIGENCE--BILLING & ADDRESS
SEARCHES.....67
Exit Interview.....67
Contact During Initial and Post Deferment Grace Periods.....70
Billing Procedures.....71
Address Searches.....74

SECTION SEVEN: DUE DILIGENCE--LOAN COLLECTION.....77
Collection Procedures.....77
Actions a School May Take to Avoid Litigation.....79
Litigation.....80
Deposit of Funds Collected.....81
Costs Chargeable to the Federal Perkins Loan Fund.....81
Using Billing and Collection Firms.....84

SECTION EIGHT: DEFAULT.....87
Compromise of Repayment of Defaulted Loan.....88
Penalty for Schools With High Cohort Default Rates.....89
Calculating a School's Cohort Default Rate.....89
Defaulted Loans to Be Included in a School's Cohort
Default Rate.....90
Cohort Default Rate for a School With More Than One
Location.....91
Default Reduction Plan.....92
Assignment.....94
Default Prevention Software.....97
Default and Student Eligibility.....97

SECTION NINE: BANKRUPTCY.....99
Procedures When Borrower Requests Discharge Based
on Undue Hardship.....100
Procedures When Borrower Requests Adjustment in
Repayments.....100

SECTION TEN: CREDIT BUREAU REPORTING.....103

SECTION ELEVEN: MAINTAINING PROGRAM FUNDS.....107