Summary of Federal Laws

 

Financial Aid Programs                                                  

Compliance Partners

Director of Financial Aid

 

Federal Perkins Loan Program

 

20 U.S.C. §§ 1087aa et. seq.; 34 C.F.R. § 673.1 et seq.

Provides low-interest need based loans of up to $4,000 for undergraduates and $6,000 for graduate students.  The government and participating colleges contribute money to a pool of funds from which the colleges make loans.  President Obama has proposed (march 2009) expanding this program and changing the formula by which schools get these loans.

 

Record Retention:  See 34 C.F.R. § 674.19(e).  The institution shall maintain:

• a repayment history for each borrower showing the date and amount of each repayment over the life of the loan, as well as the amount of each repayment credited to principal, interest, collection costs, and either penalty or late charges;

• the date, nature and result of each contact with the borrower in the collection of the overdue loan;

• copies of all correspondence to or from the borrower, except bills, routine overdue notices, and routine form letters; and

• period of retention for repayment records, including cancellation and deferment requests, is at least three years from the date on which a loan is assigned to the Department of Education, canceled, or repaid.

 

72 Fed. Reg. 61959 (Nov. 1, 2007) Final Rule to Strengthen and improve the administration of the Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program. These final regulations, effective July 1, 2008, address preferred lender lists, prohibited inducements, and permissible activities. For a complete summary of the ways in which the regulations differ from the proposed rule read Final Regulations on Loans Include Some Surprises from NASFAA.

 

 

 

links updated 3/12/09 rab
compliance partner added 3/14/09 mlo
compliance box links updated 6/3/09 rab