COHEAO Seeks Input from Congress and Department of Education—Perkins Loans Receive Automatic Extension to October 2015

November 26, 2013

Prepared by: Wes Huffman (whuffman@wpllc.net)

In recent weeks, the COHEAO Washington, DC staff and members of the Board of Directors have heard reports and speculation the Perkins Loan Program is set to sunset in 2014.  This would run counter to the guidance put forward by the Department of Education in a February 2011 Dear Colleague Letter that the Perkins Loan Program will continue at least October 1, 2015 unless Congress passes a change to the Higher Education Act that changes the current law.

Concerned with the reports that a recall of loan funds might occur sooner, COHEAO reached out to the Department of Education and supporters of the program in Congress.  ED officials referred to DCL-Gen-11-02, the Dear Colleague Letter which states the program would run at least until October 2015 without any Congressional action.   Unless Congress passes a law to say otherwise, the Department’s view is the one that counts.

Therefore, COHEAO urges institutions to make Perkins loans to their students. It is important to avoid a buildup of excess cash in Perkins Loan revolving funds, since the Department has also made clear that it will exercise its right to seize excess cash under the regulations.  We urge you to make sure that financial aid offices are aware of this situation.

If you have any questions, we suggest that you read the full text of DCL-Gen-11-02, which is available online:  http://ifap.ed.gov/dpcletters/attachments/GEN1102.pdf