| AwardYear: 1996-1997 EnterChapterNo: 6 EnterChapterTitle: Federal Perkins Loan Program SectionNumber: 0 SectionTitle: Contents PageNumbers: CONTENTS CHAPTER 6 FEDERAL PERKINS LOAN PROGRAM INTRODUCTION (1) Recent Changes to the Federal Perkins Loan Program (1) Participation Agreement and Federal Perkins Loan Fund (3) Allocation of Funds--Federal Capital Contribution (4) SECTION 1: STUDENT ELIGIBILITY (7) Willingness to Repay as an Eligibility Factor (8) Loan Availability (9) Payment to Student Who Drops Out (10) SECTION 2: MAKING & DISBURSING LOANS (11) Loan Maximums (11) Counseling Students (13) The Promissory Note (15) Comparison of July 1993 Notes with May 1996 Notes (16) School-Designed Note (17) Minimum Monthly Payment Option (17) Closed-end and Open-ended Promissory Notes (18) Disbursing Funds (19) SECTION 3: REPAYMENT (21) Grace Periods (21) Grace Period for Borrower attending Less Than Half Time (22) Prepayment (24) Repayment Plan (24) Exit Interview and Repayment Schedule (25) Developing a Repayment Schedule (25) Minimum Monthly Repayment Amounts (26) Establishing Repayment Dates (29) Interest Rates (30) Length of Repayment Period (30) Disposition of Promissory Note and Repayment Schedule (32) SECTION 4: FORBEARANCE AND DEFERMENT (35) Forbearance (35) Deferment (36) In-School Deferment--Common to All Program Loans (37) Deferment of Loans Made on or After July 1, 1993 (37) Deferment of Perkins Loans Made Before July 1, 1993 (41) Deferment of NDSLs Made Between October 1, 1980 and July 1, 1993 (44) Deferment vs. Postponement for Service That Will Qualify for Loan Cancellation (46) The Concurrent Deferment Period (47) Deferment and Default (47) Deferment vs. In-School Enrollment Status (48) SECTION 5: CANCELLATION (49) U.S. Army Loan Repayment Program (49) Common Cancellation Procedures (49) Cancellation Provisions Common to All Loans Made After July 1, 1987 (51) Law Enforcement Cancellation Provision--Specific to Loans Made on or After November 29, 1990 (51) Cancellation Provisions Specific to Federal Perkins Loans and NDSLs Made on or After July 23, 1992 (52) Military Service Cancellation--Applies to All Loans Made on or After July 1, 1972 (53) Cancellation Provisions Specific to Perkins Loans (53) Death, Total and Permanent Disability, and Bankruptcy Cancellation Provisions--Applicable to All Loans (53) Criteria for Teacher Cancellation (54) Criteria Borrower Must Meet for Military Cancellation (58) Criteria for Head Start Cancellation (58) Criteria for Employee of a Child or Family Services Agency (59) Criteria for Law Enforcement or Corrections Officer Cancellation (59) Criteria for Disability Cancellation .(60) Criteria for Receiving a Bankruptcy Cancellation (60) Reimbursing Amounts Canceled (60) Definitions (61) SECTION 6: DUE DILIGENCE--BILLING & ADDRESS SEARCHES (65) Exit Interview (65) Contact During Grace Periods (68) Billing Procedures (69) Address Searches (72) SECTION 7: DUE DILIGENCE--LOAN COLLECTION (75) Collection Procedures (75) Actions a School May Take to Avoid Litigation (77) Litigation (79) Deposit of Funds Collected (80) Costs Chargeable to the Federal Perkins Loan Fund (80) Using Billing and Collection Firms (82) SECTION 8: DEFAULT (85) Compromise of Repayment of Defaulted Loan (86) Penalty for Schools With High Cohort Default Rates (86) Calculating a School's Cohort Default Rate (87) Defaulted Loans Included in a School's Cohort Default Rate (88) Cohort Default Rate for a School With More Than One Location (89) Default Reduction Plan (89) Assignment (92) Default Prevention Software (94) Default and Student Eligibility (95) SECTION 9: BANKRUPTCY (97) When Borrower Requests Discharge Based on Undue Hardship (97) Procedures When Borrower Requests Adjustment in Repayment (98) SECTION 10: CREDIT-BUREAU REPORTING (101) SECTION 11: MAINTAINING PROGRAM FUNDS (103) |