News

November 08, 2002

The regulations for the Perkins Loan Program have been amended. These changes will be effective as of July 1, 2003, except for the amendment to section 694.10, which will become effective on December 2, 2002. The full text of the changes are available in the Federal Register (Volume 67, Number 212).

Although the amendments pertain to many of the different federal loan programs, below is a summary of the changes for the Perkins Loan Program only. For the amendments to the other programs follow the above link.

• Amending Sec. 668.35 to state the conditions under which a borrower who is subject to a judgment obtained on a Title IV loan may regain eligibility for additional Title IV student financial assistance.
• Amending Sec. Sec. 674.39, 682.405, and 685.211 to exclude from rehabilitation defaulted Perkins Loan, FFEL, and Direct Loan program loans on which a judgment has been obtained.
• Amending Sec. Sec. 674.19, 682.402, and 682.414 to clarify the record retention requirements for promissory notes under the Perkins Loan and FFEL programs.
• Amending Sec. Sec. 674.34, 682.210, and, by reference, 685.204, to modify the way loan holders in the Perkins Loan, FFEL, and Direct Loan programs calculate Federal postsecondary educational loan debt for purposes of determining a borrower's eligibility for an economic hardship deferment.
• Amending Sec. Sec. 674.42, 682.604, and 685.304 to clarify that entities other than the institution may provide initial and exit loan counseling on the institution's behalf and to provide consistency in the information that must be disclosed to borrowers.
• Amending Sec. Sec. 674.2 and 674.16 to provide for the use of a Master Promissory Note (MPN) in the Perkins Loan Program.
• Amending Sec. Sec. 674.9 and 674.47 to modify the low-balance write-off options for institutions that participate in the Perkins Loan Program.
• Amending Sec. 674.17 to clarify that when an institution participating in the Perkins Loan Program closes, or otherwise leaves the program, that institution must assign its outstanding loans to the Secretary and liquidate its Perkins Loan fund according to the Secretary's instructions.
• Amending Sec. Sec. 674.33 and 674.42 to clarify the conditions under which an institution must coordinate minimum repayment options when a Perkins Loan borrower has received loans from more than one institution.
• Amending Sec. 674.42 to provide flexibility to institutions that participate in the Perkins Loan Program in providing copies of promissory notes to borrowers.
• Amending Sec. 674.43 to provide institutions increased flexibility in assessing late fees in the Perkins Loan Program.
• Amending Sec. 674.45 to clarify when an institution that participates in the Perkins Loan Program must report a defaulted account to a national credit bureau.
• Amending Sec. 674.46 to simplify the requirements for an institution that participates in the Perkins Loan Program to determine if it should initiate litigation against a defaulted borrower.
• Amending Sec. 674.50 to provide consistency within the regulations for the assignment to the Secretary of Perkins loans.
• Amending Sec. 682.402 to clarify that a State guaranty agency is not required to file a proof of claim in a bankruptcy filing and may instruct lenders not to file a proof of claim if filing a proof of claim would waive the State's sovereign immunity.
• Amending Sec. Sec. 668.183 and 668.193 to revise, for purposes of calculating an institution's cohort default rate, the definition of a defaulted loan.