The Federal Perkins Loan

Under section 461(b)(1) of the Higher Education Act of 1965, as amended (the HEA), the authority for schools to make a Federal Perkins Loan ended on September 30, 2015. Thus, absent Congressional action, schools may not make Federal Perkins Loans to new borrowers after September 30, 2015. If prior to October 1, 2015, a school makes the first disbursement of a Federal Perkins Loan to a student for the 2015-2016 award year, the school may make any remaining disbursements of that 2015-2016 loan after September 30, 2015.

In addition, section 461(b)(2) of the HEA includes a narrow “grandfathering” provision that allows schools to make Federal Perkins Loans to certain students for up to five additional years (through September 30, 2020) to enable students who received loans for award years that end prior to October 1, 2015 “to continue or complete courses of study.” The award year that ends prior to October 1, 2015, is the current 2014-2015 award year, which ends on June 30, 2015. Thus, a school may make a new Perkins Loan to a student after September 30, 2015, if all of the following conditions are met:

  1. The school made at least one Perkins Loan disbursement to the student on or before June 30, 2015.
  2. The student is enrolled at the same institution where the last Perkins Loan disbursement was received.
  3. The student is enrolled in the same academic program for which the student received his or her last Perkins Loan disbursement.

Note that because the grandfathering provision applies only to students who received a Perkins Loan for award years 2014-2015 or earlier, a student who received his or her first Perkins Loan for the 2015-2016 final award year of the program, (e.g., an incoming first-year student) will not be an eligible grandfathered student for purposes of receiving loans beyond that 2015-2016 award year.