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.
The Consolidated Appropriations Act, 2016 (Pub. L. 114-113) enacted on December 18, 2015 appropriated funds for Fiscal Year 2016 for the Campus-Based programs. Pub. L. 114-113 did not allocate funds for 2014-2015 Federal Perkins Loan service cancellation reimbursements. As a result, there will be no reimbursement payments issued this year. However, we will calculate the 2014-2015 reimbursement payment for which an institution would have been eligible to receive (using the process explained below) and maintain a record of that amount.
Although Federal Perkins Loan service cancellations are not funded, institutions must still offer and apply applicable cancellations to borrowers.
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.