If your school participated in the Federal Perkins Loan Program and continues to service their loans either in house or through a third-party servicer, keep an eye open in December for a notification from ED about returning the federal share of your revolving fund and institutional share that must be returned and the deadline to do so. The Department will send a notification to institutions that have cash in their Perkins Fund as reported on the 2019-2020 FISAP, which is subject to the distribution of assets process.
Section 466(a) of the Higher Education Act of 1965, as amended, requires a capital distribution (Distribution of Assets) of the balance of an institution’s Perkins Loan Revolving Fund (Perkins Fund). The Distribution of Assets from the Perkins Loan Revolving Fund process replaces the existing Excess Liquid Capital process as part of the wind-down of the Federal Perkins Loan Program.
The Department of Education (the Department) will require an initial distribution of assets from the institution’s Perkins Fund for the 2018–19 Award Year. Under Section 466(b), beginning with the 2019–20 Award Year and for all subsequent award years, the Department will require a capital distribution from the institution’s Perkins Fund on an annual basis for institutions that continue participating in the Perkins Loan Program. Institutions must return to the Department the federal share and return to the institution the institutional share of an institution’s Perkins Fund.
Determination of an institution’s Distribution of Assets uses information from the institution’s most recently submitted Fiscal Operations and Application to Participate (FISAP). Using the Cash on Hand, the Proportional Share formula will determine the federal and institutional shares of the institution’s Perkins Fund. The Distribution of Assets Proportional Share Worksheet calculates the amount of cash in the Perkins Fund that must be returned to the Department and the amount that must be returned to the institution.
If an institution believes that returning both the federal share and institutional share indicated on the worksheet would create a shortfall in the funds available for meeting the school’s Perkins Loan permissible collection costs through June 30, 2019, the institution may request an adjustment to its Distribution of Assets through the COD System.