Must We Reimburse Our Perkins Fund For Lost Interest If We Extend the 0% Interest Benefit To Our Perkins Borrowers?

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This AskRegs Knowledgebase Q&A was updated on August 11, 2021 to reflect the U.S. Department of Education announcement, which extends the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity through January 31, 2022 for all federally held student loans 

No. According to guidance NASFAA has received from the U.S. Department of Education (ED), if your institution chooses to extend the zero percent (0%) interest benefit to institutionally held Federal Perkins Loans, the institution does not need to reimburse its Perkins Revolving Fund for the lost interest. The option to offer zero percent interest until January 31, 2022 is not an incentive repayment plan created by the institution under 34 CFR 674.33(f).

Both payments and interest are automatically suspended on all federally held Perkins Loans from March 13, 2020 through January 31, 2022. The April 3, 2020 Electronic Announcement expands coverage to Federal Perkins Loans held by schools. On a voluntary basis, schools that hold Perkins Loans may choose to provide the same suspension of interest and payments to the loans they hold.

See also AskRegs Q&A, Are Perkins Loan Payments and Interest Suspended From March 13, 2020 Through January 31, 2022?

Note: This AskRegs Q&A was previously updated to reflect expanded timeframes in the August 8, 2020 Presidential Memorandum and the August 21, 2020 Electronic Announcement.

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.