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FEDERAL PERKINS LOAN REVOLVING FUND DISTRIBUTION OF ASSETS TIMELINE FOR 2020–21 AND REIMBURSEMENT FOR PERKINS LOAN SERVICE CANCELLATIONS

FEDERAL PERKINS LOAN REVOLVING FUND DISTRIBUTION OF ASSETS AND TIMELINES FOR 2018–19

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. The Department will be notifying schools that have cash in their Perkins Fund subject how much to of their federal and institutional shares need to be returned to the Department and how much gets distributed to the institution.  The Department will send a notification to institutions that have cash in their Perkins Fund as reported on the most recent FISAP. Institutions should NOT remove and return any funds to the Department or the institution until the institution has been notified to do so.

The Department will also notify institutions of the amount of partial reimbursement for Perkins Loan service cancellations the institution must remove from the Perkins Fund and return to the institution prior to the deadline. Click here to read the entire Electronic Announcement.

ED also released updated Federal Perkins Loan Data Provider Instructions. Schools participating in the Federal Perkins Loan (Perkins Loan) Program are required to report detailed loan information to NSLDS. This manual explains Perkins Loan reporting requirements and the processes used to add or update Perkins Loans on NSLDS, including how to use the Perkins DataPrep software. The updated manual, dated October 2020, replaces the June 2018 version.

REGISTRATION NOW OPEN FOR THE 2020 VIRTUAL FEDERAL STUDENT AID TRAINING CONFERENCE, DEC. 1–4, 2020

This year the Federal Student Aid Training Conference for Financial Aid Professionals will be online. The virtual FSA Training Conference will be held December 1-4, 2020. Be sure to register on the conference website and keep an eye out for updates about the agenda including sessions, descriptions, and conference resources. https://fsaconferences.ed.gov/

2021-2022 FAFSA EMAIL CAMPAIGN LAUNCH

Federal Student Aid has been hard at work updating their email programming for the 2021-2022 FAFSA cycle. They began sending emails to 2019-2020 FAFSA filers who haven’t filed the 2021-2022 form yet. According to FSA, ” The goals of the email campaign are to make customers aware that the 2021-2022 FAFSA form is available and to encourage them to complete the form early.”

Eligible students and parents who have a valid email address in the Central Processing System will receive an email at some point between now and early December. In January, students who are renewal eligible but still have not submitted a 2021-2022 FAFSA form will receive an email reminder. Students and parents may receive different messages based on certain factors. The specific email text is attached to this notice for your reference. 

Eligible students and parents who have opted in to receive SMS notifications may receive a notification in addition to an email.

Students and parents can now complete and submit the 2021-2022 FAFSA form electronically via fafsa.gov or via the myStudentAid mobile app. One of the features of the 2021-2022 myStudentAid mobile app is the ability for students to complete and submit a 2021-2022 renewal FAFSA form using the myFAFSA function. Click here to read the full electronic announcement.

BIG CHANGES COMING TO PSLF

Federal Student Aid just announced big changes to Public Service Loan Forgiveness.

In the past when a borrower made a lump sum payment or otherwise pre-paid their loan, those payments would only count as one qualifying payment toward PSLF. In August, FSA’ changed their policy and as a result prepayments and lump sum payments will count for as qualifying payments if a borrower has a valid employment certification on file and other usual eligibility conditions are being met. This news is HUGE for those working in public service and seeking PSLF.

FSA also announced they are launching a redesigned PSLF Help Tool for borrowers on the studentaid.gov website. The tool will help borrowers determine their eligibility and even apply for PSLF using a single  form for PSLF and Temporary Expanded PSLF (TEPSLF). Following the StudentAid.gov update, borrowers will only need to submit this one form to certify their employment or to be considered for forgiveness under PSLF or TEPSLF. 

COVID-19 TITLE IV FAQ WEBSITE UPDATE – R2T4

ED’s Office of Postsecondary ED released an update to the COVID-19 TITLE IV Frequently Asked Questions last month, clarifying the rules for COVID related R2T4s. 

Q: Is the R2T4 waiver under the CARES Act mandatory, or may an institution opt to continue returning funds to the Title IV programs even for those students whose withdrawals are the result of circumstances related to the COVID-19 emergency?

A: Section 3508 of the CARES Act provides that the Secretary shall waive the requirement to return funds under the Return of Title IV Funds requirements for students who withdraw from a payment period or period of enrollment as a result of a qualifying emergency. This effectively means that no statutory basis exists for returning Title IV funds for these students for the duration of the period covered by the waiver. 

The May 15, 2020 Electronic Announcement (EA) outlines how institutions can comply with the CARES Act requirements relative to situations where a student’s withdrawal is determined to be COVID-19 related, i.e., maintain all Title IV funds on the student’s ledger account, disburse any funds the student was eligible to receive that were not disbursed prior to the withdrawal, and make no adjustments to disbursement amounts reported in COD.

The Department is aware of concerns over the possibility that students who withdraw as the result of circumstances related to the COVID-19 emergency will seek payment of the credit balances that may be left on their accounts since their institutions are not required to return any Title IV funds. As a result of CARES Act relief, these students would also not be required to repay Direct Loan funds disbursed for the payment period or period of enrollment in which they withdrew, nor would their Pell lifetime eligibility or Subsidized Loan usage be affected by their receipt of Title IV aid for the period. This would occur in situations where the student receives a substantial or total reduction of institutional charges due to the withdrawal, in effect creating what may have been an unintended student credit balance from the unreturned Title IV funds.

Accordingly, in these situations we will permit institutions who have written authorization from the student, to apply the remaining amount of a student’s credit balance from these Title IV disbursements (after all charges on the student’s account are paid) to reduce Direct Loan disbursements received for attendance at the institution for periods prior to the payment period in which the student withdrew. The institution must obtain this authorization (which may be electronic) from the student prior to applying his or her credit balance for this purpose.  The institution must also notify any affected student of the action and the amount that was repaid, and the institution must return the Direct Loan funds in the COD and G5 systems. An institution may only exercise this authority for Direct Loan award years that are currently open.  If the amount of the student’s credit balance resulting from CARES Act R2T4 relief exceeds the amount of Direct Loan disbursements received for prior periods, the institution may, with written authorization, use the credit balance to pay down the prior Direct Loan disbursements, but must provide the remaining credit balance amount directly to the student.

Regarding the concern that a student may falsely report circumstances related to the COVID-19 emergency, the Department is unaware of widespread abuse occurring in this area. However, if an institution has cause to doubt that a student’s written attestation that his or her withdrawal is COVID-19 related, it may request any additional documentation reasonably necessary to determine the accuracy of the attestation. This conforms with the requirement to identify and resolve conflicting information under 34 CFR 668.16(f). (Published October 5, 2020)