September 13, 2019
Colleges to be Reimbursed for Perkins Loans Service Cancellations
The U.S. Department of Education has announced that it will reimburse colleges and universities for previously cancelled Perkins Loans. While the exact details of the reimbursement process have not yet been released, the Department has indicated that it will send a letter to every institution participating in the Perkins Loan program regarding the amount and deadlines to be met in order to be reimbursed.
The decision to reimburse colleges and universities will likely result in hundreds of millions of dollars in reimbursements to colleges and universities that participated in the Perkins Loan program. It is estimated that the total federal obligation for Perkins Loan program forgiveness over the past decade exceeds $300 million.
The federal government has long promised that colleges and universities would be reimbursed for institutional contributions to the Perkins Loans program for loans it cancelled for certain eligible borrowers (e.g. teachers, law enforcement, nurses, etc.). As a result, colleges and universities were financially on the hook for loan cancellations made by the federal government.
The Department still needs to finalize the details on how it will implement the reimbursement process, but the notice claims that “later this year,” the Department will be sending a letter to affected institutions. While the total estimate of reimbursable cancellations has not been made public, individual financial aid offices should have a reliable estimate of the amount accrued over the years in Perkins Loan Service Cancellations.
The decision to reimburse colleges and universities will likely result in hundreds of millions of dollars in reimbursements to colleges and universities that participated in the Perkins Loan program. It is estimated that the total federal obligation for Perkins Loan program forgiveness over the past decade exceeds $300 million.
The federal government has long promised that colleges and universities would be reimbursed for institutional contributions to the Perkins Loans program for loans it cancelled for certain eligible borrowers (e.g. teachers, law enforcement, nurses, etc.). As a result, colleges and universities were financially on the hook for loan cancellations made by the federal government.
The Department still needs to finalize the details on how it will implement the reimbursement process, but the notice claims that “later this year,” the Department will be sending a letter to affected institutions. While the total estimate of reimbursable cancellations has not been made public, individual financial aid offices should have a reliable estimate of the amount accrued over the years in Perkins Loan Service Cancellations.