ED Extends Deadline for Mandatory Defaulted Perkins Assignments
5/06/2022
The deadline has been extended for institutions to assign Perkins Loans that have been in default for more than two years, according to a May 4 announcement from the Department of Education’s Office of Federal Student Aid. The new deadline is June 30, 2023.
Colleges and universities originally had been instructed in an August 27, 2021, Electronic Announcement to assign such Perkins Loans to ED by June 30, 2022—or purchase them—unless the institution had documentation that borrowers were making payments towards the loans in the last two years. ED’s justification for this request was based on the Higher Education Act, where the law states that in cases where schools “knowingly failed to maintain an acceptable collection record for a defaulted Perkins Loan, the Secretary may require the institution to assign the loan to ED without recompense.” Colleges and universities should consult ED’s Perkins Assignment and Liquidation Guide for guidance on the assignment process.
In the May 4 extension notice, ED reminded schools that all other conditions in its original announcement remain in effect; the only change is the deadline. For example, Perkins Loans required to be assigned to ED that have been placed with a private collection agency will need to be returned to the school so that it may meet the assignment deadline.
Additionally, ED is asking schools to provide the reasons why they were unable to meet the original deadline in the “additional information” section of their 2023-24 Fiscal Operations Report and Application to Participate (FISAP).
