# Presentation: 152173

## Session C-07

**HEA Changes on Perkins & Work Study**
- Gail McLarnon
- Nikki Harris
- U.S. Department of Education

## 			Agenda

- Legislative Changes to the Campus-Based Programs Resulting from The Higher Education Opportunity Act
- Regulatory Changes to the Federal Perkins Loan Program

## Campus-Based Legislative & Regulatory Update

- Campus-Based Programs:
- Federal Supplemental Educational Opportunity Grant  (FSEOG) Program
- Federal Work-Study (FWS) Program
- Federal Perkins Loan Program

## Higher Education Opportunity Act (HEOA)– HEA Reauthorization

- July 29 – House and Senate Conferees approve H.R. 4137
- July 31st -- House passes H.R. 4137 by a vote of 380 to 49
- July 31st -- Senate passes H.R. 4137 by a vote of 83 to 8
- President Bush signed H.R. 4137 into law August 14, 2008 – P.L. 110-315
- Dear Colleague Letter in development

## HEOA Changes to FSEOG

- HEA section 413A(b)(1) amended to:
- Authorize appropriations
- HEA section 413D(c)(3) amended to:
- Increase the allowance for books and supplies from $450 to $600 when calculating an institution’s average cost of attendance for purposes of the allocation formula

## HEOA Changes to FWS Programs

**HEOA Changes to FWS Programs**

- Three programs fall under title IV, Part C Federal Work-Study Programs:
- Federal Work-Study (FWS) Program
- 34 CFR 675 Subpart A
- Job Location and Development Program
- 34 CFR 675 Subpart B
- Work Colleges Program
- 34 CFR 675 Subpart C

**Notes:**
Here is were you can locate the information you are searching for any of the Federal Work-Study Programs.  This is your basic good to know information.  I would bookmark it. 

## HEOA Changes to FWS Programs

- HEA section 441 amended:
- Appropriations authorized
- Emergency preparedness and response has been added to the definition of “Community Services”

## HEOA Changes to FWS Programs

- HEA section 442 amended to increase allowance for books and supplies from $450 to $600 when calculating an institution’s average cost of attendance for purposes of the allocation formula

## HEOA Changes to FWS Programs

- HEA section 443 amended to fund “Civic Education and Participation Activities” for students employed in projects that:
- Teach civics in school;
- Raise awareness of government functions or resources; or
- Increase civic participation
- Regulatory action required

## HEOA Changes to FWS Programs

- Priority to the extent practicable must be given to the employment of students participating in projects:
-  Educating or training the public about evacuations, emergency response and injury prevention relating to natural disasters and acts of terrorism and other emergency situations
- Students must receive appropriate training
- Students may be paid for both training time and travel time
- Allows Federal share of FWS student compensation under this subsection to exceed 75%

## HEOA Changes to FWS Programs

- HEA section 445 amended to allow institutions flexible use of FWS funds in a Major Disaster:
- Payments may be made to disaster-affected students under certain conditions, for a period of time not to exceed one academic year, in which the disaster-affected students were prevented from fulfilling their FWS obligations

## HEOA Changes to FWS Programs

- HEA section 446(a) amended to increase the amount of FWS funds an institution may use for the Job Location and Development Program from the lesser of 10% or $50,000 of its FWS allocation to the lesser of 10% or $75,000

## HEOA Changes to FWS Programs

- HEA section 447 amended to create a new discretionary grant program for FWS schools to supplement off-campus community service employment:
- Priority must be given to applications that support work in early childhood education projects and activities in preparation for emergencies or natural disasters
- Funds must be used to pay students performing off-campus community service activities, including for training time and travel time related to this community service
- New discretionary grant program not currently funded

## Review of FWS “Community Services” Definition

- Services identified by a school, through formal or informal consultation with local nonprofit, governmental, and community-based organizations, as designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs

## Review of Community Service Examples

- FSA Handbook Examples of Community Service:
- Health care, child care, literacy training, education (including tutorial services) welfare, social services, transportation, public safety, recreation, crime prevention and control, and community improvement
- New:  Emergency preparedness and response, civic education and participation activities

## Review of Steps to Establish Community Service Jobs

- In establishing community service jobs, a school:
- Identifies potential jobs and employers
- Researches students’ interests in community service
- Promotes community service jobs
- Places a priority on jobs that meet needs of low-income individuals

## Review of On-Campus Community Service

- On-Campus Community Service must be open and accessible to the community
- The school is not considered a community for this purpose
- Service is considered open to the community if it is publicized to the general public and the general public use the service
- Statutory exception is given for support services to students with disabilities even if services are only provided to students enrolled at the school

## HEOA Changes to FWS Programs

- HEA section 448 amended to define Work College as an eligible institution that:
- Has been a public or private nonprofit, 4 year, degree-granting institution with a commitment to community service
- Has also operated a comprehensive  work-learning-service program for at least 2 years

## HEOA Changes to FWS Programs

- Work College is an eligible institution that:
- Requires students, including at least one/half of all students who are enrolled on a f/t basis, to participate in a comprehensive work-learning-service program for at least 5hrs each week or at least 80 hrs during each enrollment period, except summer school, unless the student is in a school approved study abroad or externship program
- Gives the students participating the chance to contribute to their education and to contribute to the welfare of the community as a whole

## HEOA Changes to FWS Programs

- HEA section 448 amended to define “Comprehensive Student Work-Learning-Service Program” as a program that:
- Is an integral and stated part of the institution’s educational philosophy and program
- Requires participation of all resident students for enrollment and graduation
- Includes learning objectives, evaluation, and a record of work performance as part of the student’s college record

## HEOA Changes to FWS Programs

-  “Comprehensive Student Work-Learning- Service Program” as a program that:
- Provides programmatic leadership by college personnel at levels comparable to traditional academic programs
- Recognizes the educational role of work-learning-service supervisors
- Include consequences for nonperformance or failure in the work-learning-service program similar to the consequences for failure in the regular academic program

## HEOA Changes to Perkins Loan Program

- Amends HEA §428C(b)(1) to require disclosures to Perkins Loan borrowers who consolidate:
- Borrower will lose all interest-free periods associated with a Perkins Loan
- Borrower will no longer be eligible for cancellation benefits
- Lender must list occupations contained in HEA section 465 that qualify for cancellation

## HEOA Changes to Perkins Loan Program

- Amends HEA §463(a)(4)(B) – Secretary **may** allow institutions to refer Perkins Loans to the Department for collection.  Any sums collected must be repaid to the institution (minus collection costs) as additional FCC.
- Amends HEA §463(a)(9) to prohibit the Secretary from mandating assignment other than as provided in §463(a)(4) and (5).

## HEOA Changes to Perkins Loan Program

- Amends HEA §464(a) to:
- Increase annual loan limits to $5,500 for undergraduate students
- Increase annual loan limits to $8,000 for graduate/professional students
- Increase aggregate loan limits for undergraduate students to $27,500
- Increase aggregate loan limits for graduate/professional students to $60,000
- Increase aggregate loan limits to $11,000 for “any other student”

## HEOA Changes to Perkins Loan Program

- Amends HEA §464(c)(1)(F) to require the Secretary to cancel a Perkins Loan if the borrower is:
- Permanently and totally disabled
- Unable to engage in substantial gainful activity because of a physical or mental impairment that is expected to result in death, has lasted continuously for not less than 60 months, or can be expected to last continuously for not less than 60 months or
- If the borrower is determined by the VA to unemployable due to a service-connected disability

## HEOA Changes to Perkins Loan Program

- Amends HEA §464(c)(1)(F) to:
- Allow Secretary to develop regulations to:
- safeguard against fraud and abuse in TPD discharges
- resume collection on loans discharged for TPD if the borrower receives a new Title IV loan or earns income in excess of the poverty line
**Effective July 1, 2008**

## HEOA Changes to Perkins Loan Program

- Amends HEA §464(e) to remove requirement that a forbearance request be in writing
- Requires terms of forbearance to be documented by confirming the agreement with borrower by notice and recording terms in the borrower’s file.
- Amends HEA §464(h)(1)(A) to require 9 on-time payments to successfully rehabilitate a defaulted Perkins Loan

## HEOA Changes to Perkins Loan Program

- Amends HEA §465(a)(2) to extend cancellation benefits to Perkins Loan borrowers who are:
- teachers in low-income educational service agencies (including special ed teachers)
- Full-time staff in a pre-kindergarten or child care program licensed or regulated by a State
- Full-time lawyers employed by a public defender organization
- Full-time fire fighters

## HEOA Changes to Perkins Loan Program

- Amends HEA §465(a)(2) to extend cancellation benefits to Perkins Loan borrowers who are:
- Full-time faculty members at a Tribal college or University
- Librarians with a Master’s degree in Library Science employed in a low-income school or a public library serving low-income schools
- Full-time speech language pathologists with a Master’s degree working with low-income children

## HEOA Changes to Perkins Loan Program

- Full cancellation benefits (100%) over five years for members of the Armed forces serving in areas of hostility
- Sense of Congress:
- “The Federal Perkins Loan program is an important part of Federal student aid and should remain a campus-based aid program at colleges and Universities.”

## HEA Reauthorization – H.R. 4137 Federal Perkins Loan Program

- Amends HEA §484A to require that:
-  Perkins Loans are not subject to a defense based on a claim of infancy
- Obligation to title IV aid does not apply to deceased students, a deceased student’s estate or the estate of such student’s family.

## HEOA Changes to Perkins Loan Program

- Amends HEA §485(b)(1)(A) to expand exit counseling requirements for FFEL, Direct and Perkins Loans
- Amends HEA §488 to authorize the transfer of up to 25% of an institution’s FWS allocation to its Perkins Loan fund

## Regulatory Changes - Perkins Loan Program

- Regulatory changes in the Perkins Loan Program effective July 1, 2008
- Resulted from 2006-07 negotiated rulemaking
- Consensus was not reached
- NPRM: _[http://ifap.ed.gov/fregisters/FR06122007.html](http://ifap.ed.gov/fregisters/FR06122007.html)_
- FINAL: _[http://ifap.ed.gov/fregisters/FR11012007.html](http://ifap.ed.gov/fregisters/FR11012007.html)_

## Mandatory Assignment-Sec. 674.8
Schools hold more than $400 million in Perkins Loans that have been in default for 5 or more years
Little collection activity seen on these loans
ED streamlined the voluntary assignment to encourage schools to assign their aged, defaulted loans

- Schools hold more than $400 million in Perkins Loans that have been in default for 5 or more years
- Little collection activity seen on these loans
- ED streamlined the voluntary assignment to encourage schools to assign their aged, defaulted loans

**Regulatory Changes - Perkins ****Loan Program**

## HEOA supersedes Perkins Loan Program rules allowing the Secretary to require assignment of a Perkins Loan if—
In default for 7 or more years, and
No payment has been received in past 12 months 
Outstanding principal balance is $100 or more

- In default for 7 or more years, and
- No payment has been received in past 12 months
- Outstanding principal balance is $100 or more

**Regulatory Changes - Perkins ****Loan Program**

## NSLDS Reporting Requirements –Sec. 674.16
Requires schools to report enrollment and loan status information or any other Perkins loan-related information required by the Secretary by a deadline established by the Secretary

- Requires schools to report enrollment and loan status information or any other Perkins loan-related information required by the Secretary by a deadline established by the Secretary

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
In the FFEL and Perkins Loan Programs, we have new rules that require schools lenders and GAs to report enrollment and loan status information or any other Title IV loan related information required by the Secretary by a deadline established by the Secretary.

New rules also require GAs to report enrollment and loan status information to current loan holders within 35 days of any changes to the student’s enrollment status.

The goal of these new regulations is to increase the qualify and accuracy of information in NSLDS especially as it relates to Perkins data.

We’ve been having discussions with the Perkins community through COHEAO about deadlines and other issues, and I’ll talk more about that later in the presentation.

## Record Retention Requirements on MPNs Assigned to ED (Sec. 674.19)
Perkins schools must retain records showing date & amount of each disbursement of loan made on MPN until the loan is satisfied
Upon the Secretary request, schools must submit disbursement records on assigned loans to ED

- Perkins schools must retain records showing date & amount of each disbursement of loan made on MPN until the loan is satisfied
- Upon the Secretary request, schools must submit disbursement records on assigned loans to ED

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
Hand in hand with the new certification rules are new rules on record retention requirements on MPNs assigned to ED.

New rules in the Perkins Loan and FFEL program would require
Read bullets

These regulatory changes would also facilitate proving that a borrower benefited from the proceeds of a loan if the borrower challenges the validity of MPNs assigned to ED.

For schools that participate in the Perkins Program, these are new provisions. However because MPNs have been in use in the Perkins program for approximately three years, schools have retained their disbursement records under current record retention requirements in 668.24.  The only new requirements is that Perkins schools must retain these disbursement records for at least 3 years after a Perkins Loan is satisfied and that disbursement records be submitted to the Department on an assigned Perkins MPN if required by the Secretary.

## Simplification of Deferment Process-Sec. 674.34
Perkins Loan school may grant a deferment based on information from the Secretary, a FFEL holder or another Perkins Loan school

- Perkins Loan school may grant a deferment based on information from the Secretary, a FFEL holder or another Perkins Loan school

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
Let’s start with the final regs that reach across the title IV loan programs.
First is the simplification of the deferment granting process.
This agenda item was added to our negotiations as a result of a suggestion from FFEL lenders and GAs.  The goal was to reduce redundancy of effort and administrative expense in determining a borrower’s eligibility for a deferment when the borrower has more than one loan and of course many do.

READ BULLETS

FFEL lenders and the Sec. May not use a Perkins’ schools determination of eligibility for deferment because the requirements are slightly different.

Perkins schools have the best deal under these new regs-they can grant a deferment based on the determination made by the Secretary, a FFEL lender or another Perkins school.

The use of this process is not mandatory – it is at the option of the loan holder.

## Simplification of Deferment Process (Sec. 674.34 cont.)
Borrower must request deferment verbally or in writing
School must grant deferment for same reason and same time period
School must have no conflicting information on borrower’s eligibility

- Borrower must request deferment verbally or in writing
- School must grant deferment for same reason and same time period
- School must have no conflicting information on borrower’s eligibility

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
The borrower must still  make a request for a deferment to each loan holder, either verbally or in writing.  This is to allow the borrower control over his or her loans.  We discussed allowing the loan holder to automatically grant a deferment based on an eligibility determination of another holder but rejected that idea...again to give the borrower control.

READ second bullet

Holders can grant the deferment based on another holder’s determination in good faith, as long as they have no conflicting information on the borrower’s eligibility.  Negotiators requested that we include language to this effect to provide a level of comfort should circumstances beyond their control ultimately prove that the borrower was not eligible for the deferment.

## Simplified Deferment Process (Sec. 674.34 cont.)
School must grant a military deferment based on request from borrower or borrower’s representative without supporting documentation
School must provide notice to borrower or representative, if applicable, that deferment has been granted

- School must grant a military deferment based on request from borrower or borrower’s representative without supporting documentation
- School must provide notice to borrower or representative, if applicable, that deferment has been granted

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
New final rules on the simplified deferment granting process require a loan holder to grant a military deferment based on a request from the borrower or the borrower’s representative.
So, if the loan holder receives a request from the borrower’s representative with supporting documentation, the loan holder must grant the deferment.

We did not define “borrower’s representative” in the regulations—we leave it to the school to define so that you have flexibility. A borrower’s representative could be a family member or another reliable source.

This addition to the neg reg agenda came from a negotiator representing schools.  The goal was to make it easier for military personnel, who may be required to deploy quickly and often to remote locations, to avoid going into default on their loans due to circumstances beyond their control.

READ last bullet

## Deferments (Sec. 674.34 cont.) 
Economic hardship income standard an amount equal to 150% of the poverty line applicable to the borrower’s family size
All loans now eligible for military deferment, not just loans made on or after July 1, 2001; three-year restriction removed

- Economic hardship income standard an amount equal to 150% of the poverty line applicable to the borrower’s family size
- All loans now eligible for military deferment, not just loans made on or after July 1, 2001; three-year restriction removed

**Regulatory Changes - Perkins ****Loan Program**

## Deferments (Sec. 674.34 cont.)
Military deferment period ends 180 days after demobilization 
New military deferment for up to 13 months following conclusion of military service for National Guard, other reserves and retired military borrowers enrolled, or enrolled within six months of call to active duty 

- Military deferment period ends 180 days after demobilization
- New military deferment for up to 13 months following conclusion of military service for National Guard, other reserves and retired military borrowers enrolled, or enrolled within six months of call to active duty

**Regulatory Changes - Perkins ****Loan Program**

## Definition of “Reasonable” Collection Costs in Sec. 674.45
First Collection Effort:  30% of principal, interest and late charges collected
Second Collection Effort:  40% of principal, interest and late charges collected
Litigation:  40% plus court costs

- First Collection Effort:  30% of principal, interest and late charges collected
- Second Collection Effort:  40% of principal, interest and late charges collected
- Litigation:  40% plus court costs

**Regulatory Changes - Perkins ****Loan Program**

## Certification of Electronic Signatures on MPNs Assigned to ED (Sec. 674.50)
Schools must maintain a certification of creation and maintenance of E-MPN process, including borrower authentication and signature process
E-signed MPNs must be retained for at least 3 years after all loans are satisfied

- Schools must maintain a certification of creation and maintenance of E-MPN process, including borrower authentication and signature process
- E-signed MPNs must be retained for at least 3 years after all loans are satisfied

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
MPNs have been in use across the loan programs for a long time. J There is no loan amount or loan period on the face of the note. On e-signed notes, no wet signature.  When these notes are assigned to ED, we need to be able to prove that the borrower benefits from the loan proceeds and that an electronically-signed note is valid.  These new regulations also preserve the integrity of the programs and protect the Federal fiscal interest.  These rules protect lenders and schools as well and ensure that you have the means to enforce an e-signed not).

New rules require schools and loan holders to maintain a certification of creation and maintenance of E_MPN process, including the borrower authentication and signature process

New rules further require e-signed MPNS to be retained for at least 3 yeas after all the loans on the MPN are satisfied.

## Certification of Electronic Signatures on MPNs Assigned to ED (Sec. 674.50 cont.)
Upon Secretary’s request:
School must provide the certification and cooperate in all activities to enforce an assigned loan, including provision of testimony in a legal proceeding

- Upon Secretary’s request:
- School must provide the certification and cooperate in all activities to enforce an assigned loan, including provision of testimony in a legal proceeding

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
READ

A word about effective dates.  It is the Department’s expectation that FFEL and Perkins Loan holders will be ready to comply with these new requirements on July 1, 2008 regardless of when MPNS were electronically signed.

Recall that ED published standards for the use of e-signatures in July of 2001.  At that time, we informed lenders and institutions in the FFEL and Perkins Programs that if their process for e-signature and related records did not meet the Standards and the loan was held by a court to be unenforceable based on the signature process, the Secretary would determine on a case-by-case basis whether Federal benefits would be denied or a school would have to reimburse its Perkins Loan fund.  If, as we assume, Perkins holders are complying with our Standards, these new rules requiring the certification of e-signed notes should not add burden or cost.

## Certification of Electronic Signatures on MPNs Assigned to ED (Sec. 674.50 cont.)
Required certification must include:
Description of borrower’s steps to execute & sign MPN
Copy of each screen as viewed by the borrower when signing MPN electronically

- Required certification must include:
- Description of borrower’s steps to execute & sign MPN
- Copy of each screen as viewed by the borrower when signing MPN electronically

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
Let’s look at some of the specifics that need to be included in the certification:
Read bullets

These two requirements are included to make sure the borrower was taken through the entire note before signing and that all of the terms and conditions, rights and responsibilities contained in the prom note were presented to the borrower.

## Certification of Electronic Signatures on MPNs Assigned to ED (Sec. 674.50 cont.)
Required certification must include:
Description of process ensuring data integrity
Documentation supporting school’s authentication and electronic signature process
All other evidence required by ED

- Required certification must include:
- Description of process ensuring data integrity
- Documentation supporting school’s authentication and electronic signature process
- All other evidence required by ED

**Regulatory Changes - Perkins ****Loan Program**

## Certification of Electronic Signatures on MPNs Assigned to Ed (Sec. 674.50 cont.)
School must provide any records requested to resolve a dispute within 10 business days
School must provide complete access to E-records until all loans made on the MPN are satisfied

- School must provide any records requested to resolve a dispute within 10 business days
- School must provide complete access to E-records until all loans made on the MPN are satisfied

**Regulatory Changes - Perkins ****Loan Program**

## Sec. 674.51—School may use an accurate and complete photocopy of a Death Certificate to document death discharge 
“Exceptional circumstances” discharge by chief executive officer based on other reliable information unchanged

- “Exceptional circumstances” discharge by chief executive officer based on other reliable information unchanged

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
Final rules allow title IV loan holders to use an accurate and complete photocopy of a borrower’s death certificate    to document a death discharge.

The goal of these new rules is to reduce burden and cost and ease administration of the loan programs for both loan holders and a borrower’s family.

The provisions that allow a death discharge based on other reliable information by a chief executive officer when a death certificate is not available or in other exception circumstances remain unchanged.

## Child & Family Service Cancellation (Sec. 674.56)
To qualify for cancellation a borrower must be:
Employed full-time by a child and family service agency
Provide services directly and exclusively to high-risk children from low-income communities

- To qualify for cancellation a borrower must be:
- Employed full-time by a child and family service agency
- Provide services directly and exclusively to high-risk children from low-income communities

**Regulatory Changes - Perkins ****Loan Program**

## Total and Permanent Disability (TPD) Discharge-Sec. 674.61
Title IV Loan Program regulations restructured to follow process and clarify eligibility requirements
TPD discharge application must be submitted within 90 days of date physician certifies the form
Borrower’s TPD date defined as physician’s certification date on the application

- Title IV Loan Program regulations restructured to follow process and clarify eligibility requirements
- TPD discharge application must be submitted within 90 days of date physician certifies the form
- Borrower’s TPD date defined as physician’s certification date on the application

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
We have new final rules across the loan programs relating to the total and permanent disability discharge.

Based on feedback from our student loan ombudsman and our Inspector General, new final rules restructure and clarify eligibility requirements for a TPD discharge.  We heard from our Ombudsman that our old rules were confusing and hard to follow.  The new rules mirror the process

We heard from our IG that discharges were too often granted immediately based on a 3-year conditional discharge period that took place completely in the past.  New rules require a 3-year prospective conditional discharge period.

Other changes require that the TPD discharge application must be submitted within 90 days of the date the physician certifies the form.  This is to ensure that the information submitted by the borrower is current, not outdated.

Under the new rules, the borrower’s TPD date is defined as the date the physician certifies the application.  Again, this is to ensure that the doctor is certifying the borrower’s condition based on the borrower’s present health and conditions.

## TPD Discharge (Sec. 674.61 cont.)	
Conditional discharge period is prospective starting on the date the physician certifies the borrower’s TPD
Title IV loans or earned income received before date of TPD do not disqualify borrower for discharge
Title IV loans or loan disbursements received after date of TPD disqualify borrower for discharge

- Conditional discharge period is prospective starting on the date the physician certifies the borrower’s TPD
- Title IV loans or earned income received before date of TPD do not disqualify borrower for discharge
- Title IV loans or loan disbursements received after date of TPD disqualify borrower for discharge

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
Again, under new final regulations, the 3-year conditional discharge period is now prospective.  This allows the Secretary to monitor the receipt of income and new loans going forward.  It also addresses the IG’s concern about immediate discharges that were followed by a borrower receiving new loans and income.

New rules provide that title IV loans or earned income received before the date of the borrowers TPD do not disqualify the borrower for a discharge.  So every loan received before the doctor certifies the TPD form is eligible for discharge.

However any title iv loans or loan disbursements received after the date of the borrower’s TPD disqualify the borrower for discharge.

## TPD Discharge (Sec. 674.61 cont.)
Minimal earned income allowed during conditional discharge period
School must notify borrower that no payments are due during discharge process
Only payments made after the TPD date (physician’s certification date) are returned upon receipt of final discharge

- Minimal earned income allowed during conditional discharge period
- School must notify borrower that no payments are due during discharge process
- Only payments made after the TPD date (physician’s certification date) are returned upon receipt of final discharge

**Regulatory Changes - Perkins ****Loan Program**

**Notes:**
New rules continue to allow minimal earned income during the conditional discharge period – defined as no more than the poverty level for a family of 2.

New rules require that a loan holder must notify a borrower that no payments are due during the discharge process and

That only payments made after the TPD date (physician’s certification date) are returned to the borrower upon receipt of a final discharge.

Lastly, new rules also allow the Secretary to require a borrower to submit documentation during the 3-year prospective conditional discharge period to confirm that the borrower is still TPD and to require an independent physician to examine the borrower at the Department’s expense, again to ensure the borrower is in fact totally and permanently disabled.

## Contact Information:Gail McLarnon202-219-7048gail.mclarnon@ed.govNikki Harris202-219-7050nikki.harris@ed.gov