cfr_sections
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53 rows where part_number = 674 and title_number = 34 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 34:34:3.1.3.1.33.1.17.1 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.1 Purpose and identification of common provisions. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 57 FR 32344, July 21, 1992; 59 FR 61415, Nov. 29, 1994; 64 FR 18002, Apr. 6, 2000] | (a) The Federal Perkins Loan Program provides low-interest loans to financially needy students attending institutions of higher education to help them pay their educational costs. (b)(1) The Federal Perkins Loan Program, authorized by title IV-E of the Higher Education Act of 1965, as amended, and previously named the National Direct Student Loan (NDSL) Program, is a continuation of the National Defense Loan Program authorized by title II of the National Defense Education Act of 1958. All rights, privileges, duties, functions, and obligations existing under title II before the enactment of title IV-E continue to exist. (2) The Secretary considers any student loan fund established under title IV-E to include the assets of an institution's student loan fund established under title II. *(c) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk. (d) Provisions in these regulations that refer to “loans” or “student loans” apply to all loans made under title IV-E of the HEA or title II of the National Defense Education Act. | ||||
| 34:34:3.1.3.1.33.1.17.10 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.12 Loan maximums. | ED | [59 FR 61407, Nov. 30, 1994, as amended at 64 FR 58309, Oct. 28, 1999; 74 FR 55660, Oct. 28, 2009] | (a) The maximum annual amount of Federal Perkins Loans and NDSLs an eligible student may borrow is— (1) $5,500 for a student who is enrolled in a program of undergraduate education; and (2) $8,000 for a graduate or professional student. (b) The aggregate unpaid principal amount of all Federal Perkins Loans and NDSLs received by an eligible student may not exceed— (1) $27,500 for a student who has successfully completed two years of a program leading to a bachelor's degree but who has not received the degree; (2) $60,000 for a graduate or professional student; and (3) $11,000 for any other student. (c) The maximum annual amounts described in paragraph (a) of this section and the aggregate maximum amounts described in paragraph (b) of this section may be exceeded by 20 percent if the student is engaged in a program of study abroad that is approved for credit by the home institution at which the student is enrolled and that has reasonable costs in excess of the home institution's cost of attendance. (d) For each student, the maximum annual amounts described in paragraphs (a) and (c) of this section, and the aggregate maximum amounts described in paragraphs (b) and (c) of this section, include any amounts borrowed previously by the student under title IV, part E of the HEA at any institution. | ||||
| 34:34:3.1.3.1.33.1.17.11 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.13 Reimbursement to the Fund. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 59 FR 61407, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999; 65 FR 65614, Nov. 1, 2000] | (a) The Secretary may require an institution to reimburse its Fund in an amount equal to that portion of the outstanding balance of— (1) A loan disbursed by the institution to a borrower in excess of the amount that the borrower was eligible to receive, as determined on the basis of information the institution had, or should have had, at the time of disbursement; or (2) Except as provided in paragraph (b) of this section, a defaulted loan with regard to which the institution failed— (i) To record or retain the loan note in accordance with the requirements of this part; (ii) To record advances on the loan note in accordance with the requirements of this part; or (iii) To exercise due diligence in collecting in accordance with the requirements of this part. (b) The Secretary does not require an institution to reimburse its Fund for the portion of the outstanding balance of a defaulted loan described in paragraph (a)(2) of this section— (1) That the institution— (i) Recovers from the borrower or endorser; or (ii) Demonstrates, to the Secretary's satisfaction, would not have been collected from the borrower even if the institution complied in a timely manner with the due diligence requirements of subpart C of this part; or (2) On which the institution obtains a judgment. (c) An institution that is required to reimburse its Fund under paragraph (a) of this section shall also reimburse the Fund for the amount of the administrative cost allowance claimed by the institution for that portion of the loans to be reimbursed. (d) An institution that reimburses its Fund under paragraph (a) of this section thereby acquires for its own account all the right, title and interest of the Fund in the loan for which reimbursement has been made. | ||||
| 34:34:3.1.3.1.33.1.17.12 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | §§ 674.14-674.15 [Reserved] | ED | ||||||
| 34:34:3.1.3.1.33.1.17.13 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.16 Making and disbursing loans. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 59 FR 61408, Nov. 30, 1994; 59 FR 61722, Dec. 1, 1994; 60 FR 34433, June 30, 1995; 60 FR 61814, Dec. 1, 1995; 61 FR 60608, Nov. 29, 1996; 64 FR 58309, Oct. 28, 1999; 67 FR 67076, Nov. 1, 2002; 71 FR 45697, Aug. 9, 2006; 72 FR 61996, 62030, Nov. 1, 2007] | (a)(1) Before an institution makes its first disbursement to a student, the student shall sign the promissory note and the institution shall provide the student with the following information: (i) The name of the institution and the address to which communications and payments should be sent. (ii) The principal amount of the loan and a statement that the institution will report the amount of the loan to a national credit bureau at least annually. (iii) The stated interest rate on the loan. (iv) The yearly and cumulative maximum amounts that may be borrowed. (v) An explanation of when repayment of the loan will begin and when the borrower will be obligated to pay interest that accrues on the loan. (vi) The minimum and maximum repayment terms which the institution may impose and the minimum monthly repayment required. (vii) A statement of the total cumulative balance owed by the student to that institution, and an estimate of the monthly payment amount needed to repay that balance. (viii) Special options the borrowers may have for loan consolidation or other refinancing of the loan. (ix) The borrower's right to prepay all or part of the loan, at any time, without penalty, and a summary of the circumstances in which repayment of the loan or interest that accrues on the loan may be deferred or canceled including a brief notice of the Department of Defense program for repayment of loans on the basis of specified military service. (x) A definition of default and the consequences to the borrower, including a statement that the institution may report the default to a national credit bureau. (xi) The effect of accepting the loan on the eligibility of the borrower for other forms of student assistance. (xii) The amount of any charges collected by the institution at or prior to the disbursement of the loan and any deduction of such charges from the proceeds of the loan or paid separately by the borrower. (xiii) Any cost that may be assessed on the borrower in the collection of the loan including late charges an… | ||||
| 34:34:3.1.3.1.33.1.17.14 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.17 Federal interest in allocated funds—transfer of Fund. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 59 FR 61415, Nov. 30, 1994; 60 FR 61814, Dec. 1, 1995; 67 FR 67076, Nov. 1, 2002] | (a) If an institution responsible for a Federal Perkins Loan fund closes or no longer wants to participate in the program, the Secretary directs the institution to take the following steps to protect the outstanding loans and the Federal interest in that Fund: (1) A capital distribution of the liquid assets of the Fund according to section 466(c) of the Act. (2) The assignment of the outstanding loans to the United States. (b) An institution that assigns outstanding loans under this paragraph relinquishes its interest in those loans. | ||||
| 34:34:3.1.3.1.33.1.17.15 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.18 Use of funds. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 57 FR 32345, July 21, 1992; 59 FR 61408, 61415, Nov. 30, 1994; 61 FR 60396, Nov. 27, 1996] | (a) General. An institution shall deposit the funds it receives under the Federal Perkins Loan program into its Fund. It may use these funds only for making loans and the other activities specified in § 674.8(b). (b) Transfer of funds. (1) An institution may transfer up to 25 percent of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Federal Work-Study program or Federal Supplemental Educational Opportunity Grant program, or to both. (2) An institution may transfer up to the total of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Work-Colleges program. (3) An institution shall use transferred funds according to the requirements of the program to which they are transferred. (4) An institution shall report any transferred funds on the Fiscal Operations Report required under § 674.19(d). (5) An institution shall transfer back to the Federal Perkins Loan program any funds unexpended at the end of the award year that it transferred to the FWS program, the FSEOG program, or the Work-Colleges program from the Federal Perkins Loan program. | ||||
| 34:34:3.1.3.1.33.1.17.16 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.19 Fiscal procedures and records. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32345, July 21, 1992; 59 FR 61408, 61415, Nov. 30, 1994; 59 FR 61722, Dec. 1, 1994; 60 FR 61814, Dec. 1, 1995; 61 FR 60492, Nov. 27, 1996; 62 FR 50847, Sept. 26, 1997; 64 FR 58315, Oct. 28, 1999; 67 FR 67076, Nov. 1, 2002; 72 FR 61996, Nov. 1, 2007; 78 FR 65805, Nov. 1, 2013] | (a) Fiscal procedures. (1) In administering its Federal Perkins Loan program, an institution shall establish and maintain an internal control system of checks and balances that ensures that no office can both authorize payments and disburse funds to students. (2)(i) A separate bank account for Federal funds is not required, except as provided in paragraph (b) of this section. (ii) An institution shall notify any bank in which it deposits Federal funds of the accounts into which those funds are deposited by— (A) Ensuring that the name of the account clearly discloses the fact that Federal funds are deposited in the account; or (B) Notifying the bank, in writing, of the names of the accounts in which it deposits Federal funds. The institution shall retain a copy of this notice in its files. (3)(i) The institution shall ensure that the cash balances of the accounts into which it deposits Federal Perkins Loan Fund cash assets do not fall below the amount of Fund cash assets deposited in those accounts but not yet expended on authorized purposes in accordance with applicable title IV HEA program requirements, as determined from the records of the institution. (ii) If the cash balances of the accounts at any time fall below the amount described in paragraph (a)(3)(i) of this section, the institution is deemed to make any subsequent deposits into the accounts of funds derived from other sources with the intent to restore to that amount those Fund assets previously withdrawn from those accounts. To the extent that these institutional deposits restore the amount previously withdrawn, they are deemed to be Fund assets. (b) Account for Perkins Loan Fund. An institution shall maintain the funds it receives under this part in accordance with the requirements in § 668.163. (c) Deposit of ICC into Fund. An institution shall deposit its ICC into its Fund prior to or at the same time it deposits any FCC. (d) Records and reporting. (1) An institution shall establish and maintain program and fiscal records that are… | ||||
| 34:34:3.1.3.1.33.1.17.17 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.20 Compliance with equal credit opportunity requirements. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 59 FR 61415, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999] | (a) In making a loan, an institution shall comply with the equal credit opportunity requirements of Regulation B (12 CFR part 202). (b) The Secretary considers the Federal Perkins Loan program to be a credit assistance program authorized by Federal law for the benefit of an economically disadvantaged class of persons within the meaning of 12 CFR 202.8(a)(1). Therefore, the institution may request a loan applicant to disclose his or her marital status, income from alimony, child support, and spouse's income and signature. | ||||
| 34:34:3.1.3.1.33.1.17.2 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.2 Definitions. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 52580, Dec. 28, 1988; 57 FR 32344, July 21, 1992; 59 FR 61404, 61415, Nov. 30, 1994; 60 FR 61814, Dec. 1, 1995; 61 FR 60608, Nov. 29, 1996; 64 FR 58308, Oct. 28, 1999; 65 FR 18002, Apr. 6, 2000; 67 FR 67076, Nov. 1, 2002; 69 FR 12276, Mar. 16, 2004; 71 FR 38003, July 3, 2006; 72 FR 62030, Nov. 1, 2007; 73 FR 35494, June 23, 2008; 78 FR 65804, Nov. 1, 2013] | (a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668: Academic Competitiveness Grant (ACG) Program Academic year Award year Defense loan Enrolled Expected family contribution (EFC) Federal Family Education Loan (FFEL) programs Federal Pell Grant Federal Perkins loan Federal Perkins Loan Program Federal PLUS Program Federal SLS Program Federal Supplemental Educational Opportunity Grant (FSEOG) Program Federal Work-Study (FWS) Program Full-time student Graduate or professional student Half-time student HEA National Defense Student Loan Program National Direct Student Loan (NDSL) Program National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program Payment period Secretary Teacher Education Assistance for College and Higher Education (TEACH) Grant Program TEACH Grant Undergraduate student Academic Competitiveness Grant (ACG) Program Academic year Award year Defense loan Enrolled Expected family contribution (EFC) Federal Family Education Loan (FFEL) programs Federal Pell Grant Federal Perkins loan Federal Perkins Loan Program Federal PLUS Program Federal SLS Program Federal Supplemental Educational Opportunity Grant (FSEOG) Program Federal Work-Study (FWS) Program Full-time student Graduate or professional student Half-time student HEA National Defense Student Loan Program National Direct Student Loan (NDSL) Program National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program Payment period Secretary Teacher Education Assistance for College and Higher Education (TEACH) Grant Program TEACH Grant Undergraduate student (b) The Secretary defines other terms used in this part as follows: Default: The failure of a borrower to make an installment payment when due or to comply with other terms of the promissory note or written repayment agreement. Enter repayme… | ||||
| 34:34:3.1.3.1.33.1.17.3 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | §§ 674.3-674.4 [Reserved] | ED | ||||||
| 34:34:3.1.3.1.33.1.17.4 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.5 Federal Perkins Loan program cohort default rate and penalties. | ED | [59 FR 61405, Nov. 30, 1994, as amended at 60 FR 61814, Dec. 1, 1995; 64 FR 58308, Oct. 28, 1999; 65 FR 65690, Nov. 1, 2000; 68 FR 75428, Dec. 31, 2003] | (a) Default penalty. If an institution's cohort default rate meets the following levels, a default penalty is imposed on the institution as follows: (1) FCC reduction. If the institution's cohort default rate equals or exceeds 25 percent, the institution's FCC is reduced to zero. (2) Ineligibility. For award year 2000-2001 and succeeding award years, an institution with a cohort default rate that equals or exceeds 50 percent for each of the three most recent years for which cohort default rate data are available is ineligible to participate in the Federal Perkins Loan Program. Following a review of that data and upon notification by the Secretary, an institution is ineligible to participate for the award year, or the remainder of the award year, in which the determination is made and the two succeeding award years. An institution may appeal a notification of ineligibility from the Secretary within 30 days of its receipt. (i) Appeal procedures —(A) Inaccurate calculation. An institution may appeal a notice of ineligibility based upon the submission of erroneous data by the institution, the correction of which would result in a recalculation that reduces the institution's cohort default rate to below 50 percent for any of the three award years used to make a determination of ineligibility. The Secretary considers the edit process, by which an institution adjusts the cohort default rate data that it submits to the Secretary on its Fiscal Operations Report, to constitute the procedure to appeal a determination of ineligibility based on a claim of erroneous data. (B) Small number of borrowers entering repayment. An institution may appeal a notice of ineligibility if, on average, 10 or fewer borrowers enter repayment for the three most recent award years used by the Secretary to make a determination of ineligibility. (C) Decision of the Secretary. The Secretary issues a decision on an appeal within 45 days of the institution's submission of a complete, accurate, and timely appeal. An institution may c… | ||||
| 34:34:3.1.3.1.33.1.17.5 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | §§ 674.6-674.7 [Reserved] | ED | ||||||
| 34:34:3.1.3.1.33.1.17.6 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.8 Program participation agreement. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32344, July 21, 1992; 59 FR 61407, 61415, Nov. 30, 1994; 61 FR 60396, Nov. 27, 1996; 64 FR 58315, Oct. 28, 1999; 72 FR 61996, Nov. 1, 2007] | To participate in the Federal Perkins Loan program, an institution shall enter into a participation agreement with the Secretary. The agreement provides that the institution shall use the funds it receives solely for the purposes specified in this part and shall administer the program in accordance with the Act, this part and the Student Assistance General Provisions regulations, 34 CFR part 668. The agreement further specifically provides, among other things, that— (a) The institution shall establish and maintain a Fund and shall deposit into the Fund— (1) FCC received under this subpart; (2) Except as provided in paragraph (a)(1) of § 674.7— (i) ICC equal to at least three-seventeenths of the FCC described in paragraph (a)(1) of this section in award year 1993-94; and (ii) ICC equal to at least one-third of the FCC described in paragraph (a)(1) of this section in award year 1994-95 and succeeding award years; (3) ICC equal to the amount of FCC described in paragraph (a)(1) of § 674.7 for an institution that has been granted permission by the Secretary to participate in the ELO under the Federal Perkins Loan program; (4) Payments of principal, interest, late charges, penalty charges, and collection costs on loans from the Fund; (5) Payments to the institution as the result of loan cancellations under section 465(b) of the Act; (6) Any other earnings on assets of the Fund, including the interest earnings of the funds listed in paragraphs (a)(1) through (4) of this section net of bank charges incurred with regard to Fund assets deposited in interest-bearing accounts; and (7) Proceeds of short-term no-interest loans made to the Fund in anticipation of collections or receipt of FCC. (b) The institution shall use the money in the Fund only for— (1) Making loans to students; (2) Administrative expenses as provided for in 34 CFR 673.7; (3) Capital distributions provided for in section 466 of the Act; (4) Litigation costs (see § 674.47); (5) Other collection costs, agreed to by the Secretary in connectio… | ||||
| 34:34:3.1.3.1.33.1.17.7 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.9 Student eligibility. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 59 FR 61407, 61415, Nov. 30, 1994; 60 FR 34167, June 30, 1995; 62 FR 50847, Sept. 26, 1997; 64 FR 58309, Oct. 28, 1999; 65 FR 65690, Nov. 1, 2000; 66 FR 44006, Aug. 21, 2001; 67 FR 67076, Nov. 1, 2002; 71 FR 45697, Aug. 9, 2006; 74 FR 55986, Oct. 29, 2009; 78 FR 65805, Nov. 1, 2013; 85 FR 49820, Aug. 14, 2020] | Prior to October 1, 2017, a student at an institution of higher education was eligible to receive a loan under the Federal Perkins Loan program for an award year if the student— (a) Meets the relevant eligibility requirements contained in 34 CFR part 668; (b) Is enrolled or accepted for enrollment as an undergraduate, graduate, or professional student at the institution, whether or not engaged in a program of study abroad approved for credit by the home institution; (c) Has financial need as determined in accordance with part F of title IV of the HEA. (d) Has received for that award year, if an undergraduate student— (1) A SAR as a result of applying for a grant under the Federal Pell Grant Program; or (2) A preliminary determination of eligibility or ineligibility for a Federal Pell Grant by the institution's financial aid administrator after applying for a SAR with a Federal Pell Grant Processor; (e) Is willing to repay the loan. Failure to meet payment obligations on a previous loan is evidence that the student is unwilling to repay the loan; (f) Provides to the institution a driver's license number, if any, at the time of application for the loan; (g) In the case of a borrower whose prior loan under title IV of the Act or whose TEACH Grant service obligation was discharged after a final determination of total and permanent disability— (1) Obtains a certification from a physician that the borrower is able to engage in substantial gainful activity; (2) Signs a statement acknowledging that any new Federal Perkins Loan the borrower receives cannot be discharged in the future on the basis of any present impairment, unless that condition substantially deteriorates; and (3) If the borrower receives a new Federal Perkins Loan within three years of the date that any previous title IV loan or TEACH Grant service obligation was discharged due to a total and permanent disability in accordance with § 674.61(b)(3)(i), 34 CFR 682.402(c), 34 CFR 685.213, or 34 CFR 686.42(b) based on a discharge request received o… | ||||
| 34:34:3.1.3.1.33.1.17.8 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.10 Selection of students for loans. | ED | [52 FR 45747, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 59 FR 61407, Nov. 30, 1994; 64 FR 58292, 58315, Oct. 28, 1999] | (a)(1) An institution shall make loans under this part reasonably available, to the extent of available funds, to all students eligible under § 674.9 but shall give priority to those students with exceptional financial need. (2) The institution shall define exceptional financial need for the purpose of the priority described in paragraph (a)(1) of this section and shall develop procedures for implementing that priority. (b) If an institution's allocation of Federal Capital Contribution is directly or indirectly based in part on the financial need demonstrated by students attending the institution as less-than-full-time or independent students, a reasonable portion of the dollar amount of loans made under this part must be offered to those students. (c) The institution shall establish selection procedures and these procedures must be— (1) In writing; (2) Uniformly applied; and (3) Maintained in the institution's files. | ||||
| 34:34:3.1.3.1.33.1.17.9 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | A | Subpart A—General Provisions | § 674.11 [Reserved] | ED | ||||||
| 34:34:3.1.3.1.33.2.17.1 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.30 Severability. | ED | [87 FR 66042, Nov. 1, 2022] | If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby. | ||||
| 34:34:3.1.3.1.33.2.17.10 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.39 Loan rehabilitation. | ED | [64 FR 58311, Oct. 28, 1999, as amended at 65 FR 65614, Nov. 1, 2000; 67 FR 67077, Nov. 1, 2002; 71 FR 45698, Aug. 9, 2006; 74 FR 55661, Oct. 28, 2009; 78 FR 65805, Nov. 1, 2013] | (a) Each institution must establish a loan rehabilitation program for all borrowers for the purpose of rehabilitating defaulted loans made under this part, except for loans for which a judgment has been secured or loans obtained by fraud for which the borrower has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance. The institution's loan rehabilitation program must provide that— (1) A defaulted borrower is notified of the option and consequences of rehabilitating a loan; and (2) A loan is rehabilitated if the borrower— (i) Requests rehabilitation; and (ii) Makes a full monthly payment—as determined by the institution—within 20 days of the due date, each month for 9 consecutive months. (b) Within 30 days of receiving the borrower's last on-time, consecutive, monthly payment, the institution must— (1) Return the borrower to regular repayment status; (2) Treat the first payment made under the nine consecutive payments as the first payment under the 10-year repayment maximum; and (3) Instruct any credit bureau to which the default was reported to remove the default from the borrower's credit history. (c) Collection costs on a rehabilitated loan— (1) If charged to the borrower, may not exceed 24 percent of the unpaid principal and accrued interest as of the date following application of the twelfth payment; (2) That exceed the amounts specified in paragraph (c)(1) of this section, may be charged to an institution's Fund until July 1, 2002 in accordance with § 674.47(e)(5); and (3) Are not restricted to 24 percent in the event the borrower defaults on the rehabilitated loan. (d) After rehabilitating a defaulted loan and returning to regular repayment status, the borrower regains the balance of the benefits and privileges of the promissory note as applied prior to the borrower's default on the loan. Nothing in this paragraph prohibits an institution from offering the borrower flexible repayment options following the borrower's r… | ||||
| 34:34:3.1.3.1.33.2.17.11 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.40 Treatment of loan repayments where cancellation, loan repayments, and minimum monthly repayments apply. | ED | [52 FR 45754, Dec. 1, 1987. Redesignated at 59 FR 61410, Nov. 30, 1994] | (a) An institution may not exercise the minimum monthly repayment provisions on a note when the borrower has received a partial cancellation for the period covered by a postponement. (b) If a borrower has received Defense, NDSL, and Perkins loans and only one can be cancelled, the amount due on the uncancelled loan is the amount established in § 674.31(b) (2), loan repayment terms; § 674.33(b), minimum repayment rates; or § 674.33(c), extension of repayment period. | ||||
| 34:34:3.1.3.1.33.2.17.2 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.31 Promissory note. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32345, July 21, 1992; 59 FR 61408, 61415, Nov. 30, 1994; 60 FR 61814, Dec. 1, 1995; 62 FR 50848, Sept. 26, 1997; 64 FR 58309, Oct. 28, 1999] | (a) Promissory note. (1) An institution may use only the promissory note that the Secretary provides. The institution may make only nonsubstantive changes, such as changes to the type style or font, or the addition of items such as the borrower's driver's license number, to this note. (2)(i) The institution shall print the note on one page, front and back; or (ii) The institution may print the note on more than one page if— (A) The note requires the signature of the borrower on each page; or (B) Each page of the note contains both the total number of pages in the complete note as well as the number of each page, e.g., page 1 of 4, page 2 of 4, etc. (iii) The promissory note must state the exact amount of the minimum monthly repayment amount if the institution chooses the option under § 674.33(b). (b) Provisions of the promissory note —(1) Interest. The promissory note must state that— (i) The rate of interest on the loan is 5 percent per annum on the unpaid balance; and (ii) No interest shall accrue before the repayment period begins, during certain deferment periods as provided by this subpart, or during the grace period following those deferments. (2) Repayment. (i) Except as otherwise provided in § 674.32, the promissory note must state that the repayment period— (A) For NDSLs made on or after October 1, 1980, begins 6 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later; (B) For NDSLs made before October 1, 1980 and Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later; (C) For purposes of establishing the beginning of the repayment period for NDSL or Perkins loans, the 6- and 9-month grace periods re… | ||||
| 34:34:3.1.3.1.33.2.17.3 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.32 Special terms: loans to less than half-time student borrowers. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 57 FR 32345, July 21, 1992] | (a) The promissory note used with regard to loans to borrowers enrolled on a less than half-time basis must state that the repayment period begins— (1) On the date of the next scheduled installment payment on any outstanding loan to the borrower; or (2) If the borrower has no outstanding loan, at the earlier of— (i) Nine months from the date the loan was made, or (ii) The end of a nine-month period that includes the date the loan was made and began on the date the borrower ceased to be enrolled as at least a half-time regular student at an institution of higher education or comparable institution outside the U.S. approved for this purpose by the Secretary. (b) The note must otherwise conform to the provisions of § 674.31. | ||||
| 34:34:3.1.3.1.33.2.17.4 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.33 Repayment. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 57 FR 32345, July 21, 1992; 57 FR 60706, Dec. 21, 1992; 59 FR 61409, Nov. 30, 1994; 60 FR 61814, Dec. 1, 1995; 62 FR 50848, Sept. 26, 1997; 64 FR 58309, Oct. 28, 1999; 67 FR 67076, Nov. 1, 2002; 74 FR 55660, Oct. 28, 2009; 78 FR 65805, Nov. 1, 2013; 81 FR 76078, Nov. 1, 2016; 84 FR 58933, Nov. 1, 2019; 87 FR 66042, Nov. 1, 2022; 88 FR 43065, July 6, 2023] | (a) Repayment Plan. (1) The institution shall establish a repayment plan before the student ceases to be at least a half-time regular student. (2) If the last scheduled payment would be $25 or less the institution may combine it with the next-to-last repayment. (3) If the installment payment for all loans made to a borrower by an institution is not a multiple of $5, the institution may round that payment to the next highest dollar amount that is a multiple of $5. (4) The institution shall apply any payment on a loan in the following order: (i) Collection costs. (ii) Late charges. (iii) Accrued interest. (iv) Principal. (b) Minimum monthly repayment —(1) Minimum monthly repayment option. (i) An institution may require a borrower to pay a minimum monthly repayment if— (A) The promissory note includes a minimum monthly repayment provision specifying the amount of the minimum monthly repayment; and (B) The monthly repayment of principal and interest for a 10-year repayment period is less than the minimum monthly repayment; or (ii) An institution may require a borrower to pay a minimum monthly repayment if the borrower has received loans with different interest rates at the same institution and the total monthly repayment would otherwise be less than the minimum monthly repayment. (2) Minimum monthly repayment of loans from more than one institution. If a borrower has received loans from more than one institution and has notified the institution that he or she wants the minimum monthly payment determination to be based on payments due to other institutions, the following rules apply: (i) If the total of the monthly repayments is equal to at least the minimum monthly repayment, no institution may exercise a minimum monthly repayment option. (ii) If only one institution exercises the minimum monthly repayment option when the monthly repayment would otherwise be less than the minimum repayment option, that institution receives the difference between the minimum monthly repayment and the repayment owe… | ||||
| 34:34:3.1.3.1.33.2.17.5 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.34 Deferment of repayment—Federal Perkins loans, NDSLs and Defense loans. | ED | [59 FR 61410, Nov. 30, 1994, as amended at 60 FR 61815, Dec. 1, 1995; 62 FR 50848, Sept. 26, 1997; 64 FR 57531, Oct. 25, 1999; 64 FR 58311, Oct. 28, 1999; 67 FR 67076, Nov. 1, 2002; 71 FR 45697, Aug. 9, 2006; 72 FR 61996, Nov. 1, 2007; 73 FR 63247, Oct. 23, 2008; 78 FR 65805, Nov. 1, 2013] | (a) The borrower may defer making a scheduled installment repayment on a Federal Perkins loan, an NDSL, or a Defense loan, regardless of contrary provisions of the borrower's promissory note and regardless of the date the loan was made, during periods described in paragraphs (b), (c), (d), (e), (f), and (g) of this section. (b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is— (i) Enrolled and in attendance as a regular student in at least a half-time course of study at an eligible institution; (ii) Enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Secretary; (iii) Engaged in graduate or post-graduate fellowship-supported study (such as a Fulbright grant) outside the United States; or (iv) Enrolled in a course of study that is part of a rehabilitation training program for disabled individuals approved by the Secretary as described in paragraph (g) of this section. (2) No borrower is eligible for a deferment under paragraph (b)(1) of this section while serving in a medical internship or residency program, except for a residency program in dentistry. (3) The institution of higher education at which the borrower is enrolled does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment. (4) If a borrower is attending an institution of higher education as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to a deferment for 12 months. (5) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify. (c) The borrower of a Federal Perkins loan, an NDSL, or a Defense loan need not repay principal, and interest does not accrue, for any per… | ||||
| 34:34:3.1.3.1.33.2.17.6 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.35 Deferment of repayment—Federal Perkins loans made before July 1, 1993. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32345, July 21, 1992; 59 FR 1652, Jan. 12, 1994. Redesignated and amended at 59 FR 61410, 61411, Nov. 30, 1994; 62 FR 50848, Sept. 26, 1997; 64 FR 58315, Oct. 28, 1999; 85 FR 49820, Aug. 14, 2020] | (a) The borrower may defer repayment on a Federal Perkins Loan made before July 1, 1993, during the periods described in this section. (b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at— (i) An institution of higher education; or (ii) A comparable institution outside the U.S. approved by the Secretary for this purpose. (2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment. (3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months. (4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify. (c) The borrower need not repay principal, and interest does not accrue, for any period not to exceed 3 years during which the borrower is— (1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard or an officer in the Commissioned Corps of the U.S. Public Health Service (see § 674.59); (2) On full-time active duty as a member of the National Oceanic and Atmospheric Administration Corps; (3) A Peace Corps volunteer (see § 674.60); (4) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60); (5) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following five criteria: (i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal … | ||||
| 34:34:3.1.3.1.33.2.17.7 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.36 Deferment of repayment—NDSLs made on or after October 1, 1980, but before July 1, 1993. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32345, July 21, 1992; 59 FR 1652, Jan. 12, 1994. Redesignated and amended at 59 FR 61410, 61411, Nov. 30, 1994; 62 FR 50848, Sept. 26, 1997; 64 FR 58315, Oct. 28, 1999; 85 FR 49820, Aug. 14, 2020] | (a) The borrower may defer repayment on an NDSL Loan made on or after October 1, 1980, but before July 1, 1993, during the periods described in this section. (b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at— (i) An institution of higher education; or (ii) A comparable institution outside the U.S. approved by the Secretary for this purpose. (2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment. (3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months. (4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify. (c) The borrower need not repay principal, and interest does not accrue, for a period of up to 3 years during which time the borrower is— (1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard or an officer in the Commissioned Corps of the U.S. Public Health Service (see § 674.59); (2) A Peace Corps volunteer (see § 674.60); (3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60). (4) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following four criteria: (i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954. (ii) The borrower provides service to low-income persons and… | ||||
| 34:34:3.1.3.1.33.2.17.8 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.37 Deferment of repayment—NDSLs made before October 1, 1980 and Defense loans. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 57 FR 32345, July 21, 1992; 59 FR 1652, Jan. 12, 1994. Redesignated at 59 FR 61410, Nov. 30, 1994, as amended at 62 FR 50848, Sept. 26, 1997; 64 FR 58315, Oct. 28, 1999] | (a) A borrower may defer repayment— (1) On an NDSL made before October 1, 1980 during the periods described in paragraphs (b) through (e) of this section; and (2) On a Defense loan, during the periods described in paragraphs (b) through (f) of this section. (b)(1) A borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at— (i) An institution of higher education; or (ii) A comparable institution outside the U.S. approved by the Secretary for this purpose. (2) The institution of higher education does not need to be participating in the Perkins Loan program for the borrower to qualify for a deferment. (3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months. (4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify. (c) A borrower need not repay principal, and interest does not accrue for a period of up to 3 years during which time the borrower is— (1) A member of the U.S. Army, Navy, Air Force, Marines or Coast Guard (see § 674.59); (2) A Peace Corps volunteer (see § 674.60); or (3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60). (d) The institution shall exclude the deferment periods described in paragraphs (b), (c), and (e) of this section when determining the 10-year repayment period. (e) An institution may permit the borrower to defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33(c)). (f) The institution may permit the borrower to defer payment of principal and interest, but interest shall continue to … | ||||
| 34:34:3.1.3.1.33.2.17.9 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | B | Subpart B—Terms of Loans | § 674.38 Deferment procedures. | ED | [52 FR 45754, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988. Redesignated and amended at 59 FR 61410, 61411, Nov. 30, 1994; 64 FR 57531, Oct. 25, 1999; 64 FR 58315, Oct. 28, 1999; 72 FR 61996, Nov. 1, 2007] | (a)(1) Except as provided in paragraph (a)(5) of this section, a borrower must request the deferment and provide the institution with all information and documents required by the institution by the date that the institution establishes. (2) After receiving a borrower's written or verbal request, an institution may grant a deferment under §§ 674.34(b)(1)(ii), 674.34(b)(1)(iii), 674.34(b)(1)(iv), 674.34(d), 674.34(e), 674.34(h), and 674.34(i) if the institution is able to confirm that the borrower has received a deferment on another Perkins Loan, a FFEL Loan, or a Direct Loan for the same reason and the same time period. The institution may grant the deferment based on information from the other Perkins Loan holder, the FFEL Loan holder or the Secretary or from an authoritative electronic database maintained or authorized by the Secretary that supports eligibility for the deferment for the same reason and the same time period. (3) An institution may rely in good faith on the information it receives under paragraph (a)(2) of this section when determining a borrower's eligibility for a deferment unless the institution, as of the date of the determination, has information indicating that the borrower does not qualify for the deferment. An institution must resolve any discrepant information before granting a deferment under paragraph (a)(2) of this section. (4) An institution that grants a deferment under paragraph (a)(2) of this section must notify the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan. (5) In the case of an in school deferment, the institution may grant the deferment based on student enrollment information showing that a borrower is enrolled as a regular student on at least a half-time basis, if the institution notifies the borrower of the deferment and of the borrower's option to cancel the deferment and continue paying on the loan. (6) In the case of a military service deferment under §§ 674.34(h)… | ||||
| 34:34:3.1.3.1.33.3.17.1 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.41 Due diligence—general requirements. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 59 FR 61411, Nov. 30, 1994; 64 FR 58312, Oct. 28, 1999] | (a) General. Each institution shall exercise due diligence in collecting loans by complying with the provisions in this subpart. In exercising this responsibility, each institution shall, in addition to complying with the specific provisions of this subpart— (1) Keep the borrower informed, on a timely basis, of all changes in the program that affect his or her rights or responsibilities; and (2) Respond promptly to all inquiries from the borrower. (3) Provide the borrower with information on the availability of the Student Loan Ombudsman's office if the borrower disputes the terms of the loan in writing and the institution does not resolve the dispute. (b) Coordination of information. An institution shall ensure that information available in its offices (including the admissions, business, alumni, placement, financial aid and registrar's offices) is provided to those offices responsible for billing and collecting loans, in a timely manner, as needed to determine— (1) The enrollment status of the borrower; (2) The expected graduation or termination date of the borrower; (3) The date the borrower withdraws, is expelled or ceases enrollment on at least a half-time basis; and (4) The current name, address, telephone number and Social Security number of the borrower. | ||||
| 34:34:3.1.3.1.33.3.17.10 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.50 Assignment of defaulted loans to the United States. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32347, July 21, 1992; 57 FR 60707, Dec. 21, 1992; 59 FR 61412, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999; 65 FR 65614, Nov. 1, 2000; 67 FR 67077, Nov. 1, 2002; 72 FR 61997, Nov. 1, 2007; 78 FR 65805, Nov. 1, 2013] | (a) An institution may submit a defaulted loan note to the Secretary for assignment to the United States if— (1) The institution has been unable to collect on the loan despite complying with the diligence procedures, including at least a first level collection effort as described in § 674.45(a) and litigation, if required under § 674.46(a), to the extent these actions were required by regulations in effect on the date the loan entered default; (2) The amount of the borrower's account to be assigned, including outstanding principal, accrued interest, collection costs and late charges is $25.00 or greater; and (3) The loan has been accelerated. (b) An institution may submit a defaulted note for assignment only during the submission period established by the Secretary. (c) The Secretary may require an institution to submit the following documents for any loan it proposes to assign— (1) An assignment form provided by the Secretary and executed by the institution, which must include a certification by the institution that it has complied with the requirements of this subpart, including at least a first level collection effort as described in § 674.45(a) in attempting collection on the loan. (2) The original promissory note or a certified copy of the original note. (3) A copy of the repayment schedule. (4) A certified copy of any judgment order entered on the loan. (5) A complete statement of the payment history. (6) Copies of all approved requests for deferment and cancellation. (7) A copy of the notice to the borrower of the effective date of acceleration and the total amount due on the loan. (8) Documentation that the institution has withdrawn the loan from any firm that it employed for address search, billing, collection or litigation services, and has notified that firm to cease collection activity on the loans. (9) Copies of all pleadings filed or received by the institution on behalf of a borrower who has filed a petition in bankruptcy and whose loan obligation is determined to be nondischargeable.… | ||||
| 34:34:3.1.3.1.33.3.17.2 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.42 Contact with the borrower. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32346, July 21, 1992; 59 FR 61411, 61415, Nov. 30, 1994; 64 FR 58312, Oct. 28, 1999; 67 FR 67077, Nov. 1, 2002; 74 FR 55661, Oct. 28, 2009] | (a) Disclosure of repayment information. The institution must disclose the following information in a written statement provided to the borrower either shortly before the borrower ceases at least half-time study at the institution or during the exit interview. If the borrower enters the repayment period without the institution's knowledge, the institution must provide the required disclosures to the borrower in writing immediately upon discovering that the borrower has entered the repayment period. The institution must disclose the following information: (1) The name and address of the institution to which the debt is owed and the name and address of the official or servicing agent to whom communications should be sent. (2) The name and address of the party to which payments should be sent. (3) The estimated balance owed by the borrower on the date on which the repayment period is scheduled to begin. (4) The stated interest rate on the loan. (5) The repayment schedule for all loans covered by the disclosure including the date the first installment payment is due, and the number, amount, and frequency of required payments. (6) An explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan, and a statement that the borrower has the right to prepay all or part of the loan at any time without penalty. (7) A description of the charges imposed for failure of the borrower to pay all or part of an installment when due. (8) A description of any charges that may be imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the Secretary or the institution to collect on the loan. (9) The total interest charges which the borrower will pay on the loan pursuant to the projected repayment schedule. (10) The contact information of a party who, upon request of the borrower, will provide the borrower with a copy of his or her signed promissory note. (11) An explanation that if a borrower is required to make minimum monthly… | ||||
| 34:34:3.1.3.1.33.3.17.3 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.43 Billing procedures. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32346, July 21, 1992; 59 FR 61412, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999; 67 FR 67077, Nov. 1, 2002] | (a) The term billing procedures, as used in this subpart, includes that series of actions routinely performed to notify borrowers of payments due on their accounts, to remind borrowers when payments are overdue, and to demand payment of overdue amounts. An institution shall use billing procedures that include at least the following steps: (1) If the institution uses a coupon payment system, it shall send the coupons to the borrower at least 30 days before the first payment is due. (2) If the institution does not use a coupon system, it shall send to the borrower— (i) A written notice giving the name and address of the party to which payments are to be sent and a statement of account at least 30 days before the first payment is due; and (ii) A statement of account at least 15 days before the due date of each subsequent payment. (3) Notwithstanding paragraph (a)(2)(ii) of this section, if the borrower elects to make payment by means of an electronic transfer of funds from the borrower's bank account, the institution shall send to the borrower an annual statement of account. (b)(1) An institution shall send a first overdue notice within 15 days after the due date for a payment if the institution has not received— (i) A payment: (ii) A request for deferment; or (iii) A request for postponement or for cancellation. (2) Subject to § 674.47(a), the institution may assess a late charge for loans made for periods of enrollment beginning on or after January 1, 1986, during the period in which the institution takes any steps described in this section to secure— (i) Any part of an installment payment not made when due, or (ii) A request for deferment, cancellation, or postponement of repayment on the loan that contains sufficient information to enable the institution to determine whether the borrower is entitled to the relief requested. (3) The institution shall determine the amount of the late charge imposed for loans described in paragraph (b)(2) of this section based on either— (i) Actual costs incurred fo… | ||||
| 34:34:3.1.3.1.33.3.17.4 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.44 Address searches. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 59 FR 61412, Nov. 30, 1994] | (a) If mail, other than unclaimed mail, sent to a borrower is returned undelivered, an institution shall take steps to locate the borrower. These steps must include— (1) Reviews of records in all appropriate institutional offices; (2) Reviews of telephone directories or inquiries of information operators in the locale of the borrower's last known address; and (3) If, after following the procedures in paragraph (a) of this section, an institution is still unable to locate a borrower, the institution may use the Internal Revenue Service skip-tracing service. (b) If an institution is unable to locate a borrower by the means described in paragraph (a) of this section, it shall— (1) Use its own personnel to attempt to locate the borrower, employing and documenting efforts comparable to commonly accepted commercial skip-tracing practices; or (2) Refer the account to a firm that provides commercial skip-tracing services. (c) If the institution acquires the borrower's address or telephone number through the efforts described in this section, it shall use that new information to continue its efforts to collect on that borrower's account in accordance with the requirements of this subpart. (d) If the institution is unable to locate the borrower after following the procedures in paragraphs (a) and (b) of this section, the institution shall make reasonable attempts to locate the borrower at least twice a year until— (1) The loan is recovered through litigation; (2) The account is assigned to the United States; or (3) The account is written off under § 674.47(g). | ||||
| 34:34:3.1.3.1.33.3.17.5 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.45 Collection procedures. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32346, July 21, 1992; 59 FR 61412, Nov. 30, 1994; 62 FR 50848, Sept. 26, 1997; 64 FR 58312, Oct. 28, 1999; 67 FR 67077, Nov. 1, 2002; 72 FR 61997, Nov. 1, 2007] | (a) The term “collection procedures,” as used in this subpart, includes that series of more intensive efforts, including litigation as described in § 674.46, to recover amounts owed from defaulted borrowers who do not respond satisfactorily to the demands routinely made as part of the institution's billing procedures. If a borrower does not satisfactorily respond to the final demand letter or the following telephone contact made in accordance with § 674.43(f), the institution shall— (1) Report the account as being in default to any one national credit bureau; and (2)(i) Use its own personnel to collect the amount due; or (ii) Engage a collection firm to collect the account. (b)(1) An institution must report to any national credit bureau to which it reported the default, according to the reporting procedures of the national credit bureau, any changes to the account status of the loan. (2) The institution must resolve, within 30 days of its receipt, any inquiry from any credit bureau that disputes the completeness or accuracy of information reported on the loan. (c)(1) If the institution, or the firm it engages, pursues collection activity for up to 12 months and does not succeed in converting the account to regular repayment status, or the borrower does not qualify for deferment, postponement, or cancellation on the loan, the institution shall— (i) Litigate in accordance with the procedures in § 674.46; (ii) Make a second effort to collect the account as follows: (A) If the institution first attempted to collect the account using its own personnel, it shall refer the account to a collection firm. (B) If the institution first attempted to collect the account by using a collection firm, it shall either attempt to collect the account using institutional personnel, or place the account with a different collection firm; or (iii) Submit the account for assignment to the Secretary in accordance with the procedures set forth in § 674.50. (2) If the collection firm retained by the institution does not succeed i… | ||||
| 34:34:3.1.3.1.33.3.17.6 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.46 Litigation procedures. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 59 FR 61412, 61415, Nov. 30, 1994; 67 FR 67077, Nov. 1, 2002] | (a)(1) If the collection efforts described in § 674.45 do not result in the repayment of a loan, the institution shall determine at least once every two years whether— (i) The total amount owing on the borrower's account, including outstanding principal, accrued interest, collection costs and late charges on all of the borrower's Federal Perkins, NDSL and National Defense Student Loans held by that institution, is more than $500; (ii) The borrower can be located and served with process; (iii)(A) The borrower has sufficient assets attachable under State law to satisfy a major portion of the oustanding debt; or (B) The borrower has income from wages or salary which may be garnished under applicable State law sufficient to satisfy a major portion of the debt over a reasonable period of time; (iv) The borrower does not have a defense that will bar judgment for the institution; and (v) The expected cost of litigation, including attorney's fees, does not exceed the amount which can be recovered from the borrower. (2) The institution shall sue the borrower if it determines that the conditions in paragraph (a)(1) of this section are met. (3) The institution may sue a borrower in default, even if the conditions in paragraph (a)(1) of this section are not met. (b) The institution shall assess against and attempt to recover from the borrower— (1) All litigation costs, including attorney's fees, court costs and other related costs, to the extent permitted under applicable law; and (2) All prior collection costs incurred and not yet paid by the borrower. (c)(1) An institution shall ensure that any funds collected as a result of litigation procedures are— (i) Deposited in interest-bearing bank accounts that are— (A) Insured by an agency of the Federal Government; or (B) Secured by collateral of reasonably equivalent value; or (ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States. (2) An institution shall exercise the level of care required of a fid… | ||||
| 34:34:3.1.3.1.33.3.17.7 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.47 Costs chargeable to the Fund. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 57 FR 32346, July 21, 1992; 57 FR 60706, Dec. 21, 1992; 59 FR 61412, Nov. 30, 1994; 60 FR 61815, Dec. 1, 1995; 64 FR 58313, Oct. 28, 1999; 67 FR 67077, Nov. 1, 2002] | (a) General: Billing costs. (1) Except as provided in paragraph (c) of this section, the institution shall assess against the borrower, in accordance with § 674.43(b)(2) the cost of actions taken with regard to past-due payments on the loan. (2) If the amount recovered from the borrower does not suffice to pay the amount of the past-due payments and the penalty or late charges, the institution may charge the Fund for only that unpaid portion of the cost of telephone calls to the borrower made pursuant to § 674.43 to demand payment of overdue amounts on the loan. (b) General: Collection costs. (1) Except as provided in paragraph (d) of this section, the institution shall assess against the borrower, in accordance with §§ 674.45(e) and 674.46(b), the costs of actions taken on the loan obligation pursuant to §§ 674.44, 674.45, 674.46, 674.48 and 674.49. (2) If the amount recovered from the borrower does not suffice to pay the amount on the past-due payments late charges, and these collection costs, the institution may charge and Fund the unpaid collection costs in accordance with paragraph (e) of this section. (c) Waiver: Late charges. The institution may waive late charges assessed against a borrower who repays the full amount of the past-due payments on a loan. (d) Waiver: collection costs. Before filing suit on a loan, the institution may waive collection costs as follows: (1) The institution may waive the percentage of collection costs applicable to the amount then past-due on a loan equal to the percentage of that past-due balance that the borrower pays within 30 days after the date on which the borrower and the institution enter into a written repayment agreement on the loan. (2) The institution may waive all collection costs in return for a lump-sum payment of the full amount of principal and interest outstanding on a loan. (e) Limitations on costs charged to the Fund. The institution may charge to the Fund the following collection costs waived under paragraph (d) of this section or not paid… | ||||
| 34:34:3.1.3.1.33.3.17.8 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.48 Use of contractors to perform billing and collection or other program activities. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 59 FR 61412, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999] | (a) The institution is responsible for ensuring compliance with the billing and collection procedures set forth in this subpart. The institution may use employees to perform these duties or may contract with other parties to perform them. (b) An institution that contracts for performance of any duties under this subpart remains responsible for compliance with the requirements of this subpart in performing these duties, including decisions regarding cancellation, postponement, or deferment of repayment, extension of the repayment period, other billing and collection matters, and the safeguarding of all funds collected by its employees and contractors. (c) If an institution uses a billing service to carry out billing procedures under § 674.43, the institution shall ensure that the service— (1) Provides at least quarterly, a statement to the institution which shows— (i) Its activities with regard to each borrower; (ii) Any changes in the borrower's name, address, telephone number, and, if known, any changes to the borrower's Social Security number; and (iii) Amounts collected from the borrower; (2) Provides at least quarterly, a statement to the institution with a listing of its charges for skip-tracing activities and telephone calls; (3) Does not deduct its fees from the amount is receives from borrowers; (4)(i) Instructs the borrower to remit payment directly to the institution; (ii) Instructs the borrower to remit payment to a lock-box maintained for the institution; or (iii) Deposits those funds received directly from the borrower immediately in an institutional trust account that must be an interest-bearing account if those funds will be held for longer than 45 days; and (5) Maintains a fidelity bond or comparable insurance in accordance with the requirements in paragraph (f) of this section. (d) If the institution uses a collection firm, the institution shall ensure that the firm— (1)(i) Instructs the borrower to remit payment directly to the institution; (ii) Instructs the borrower to remit pay… | ||||
| 34:34:3.1.3.1.33.3.17.9 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | C | Subpart C—Due Diligence | § 674.49 Bankruptcy of borrower. | ED | [52 FR 45555, Nov. 30, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 57 FR 32346, July 21, 1992; 59 FR 1652, Jan. 12, 1994; 59 FR 61412, Nov. 30, 1994; 64 FR 58313, Oct. 28, 1999; 65 FR 65614, Nov. 1, 2000] | (a) General. If an institution receives notice that a borrower has filed a petition for relief in bankruptcy, usually by receiving a notice of meeting of creditors, the institution and its agents shall immediately suspend any collection efforts outside the bankruptcy proceeding against the borrower. (b) Proof of claim. The institution must file a proof of claim in the bankruptcy proceeding unless— (1) In the case of a proceeding under chapter 7 of the Bankruptcy Code, the notice of meeting of creditors states that the borrower has no assets, or (2) In the case of a bankruptcy proceeding under either Chapter 7 or Chapter 13 of the Bankruptcy Code in which the repayment plan proposes that the borrower repay less than the full amount owed on the loan, the institution has an authoritative determination by an appropriate State official that in the opinion of the State official, the institution is an agency of the State and is, on that basis, under applicable State law, immune from suit. (c) Borrower's request for determination of dischargeability. (1) The institution must use due diligence and may assert any defense consistent with its status under applicable law to avoid discharge of the loan. The institution must follow the procedures in this paragraph to respond to a complaint for a determination of dischargeability under 11 U.S.C. 523(a)(8) on the ground that repayment of the loan would impose an undue hardship on the borrower and his or her dependents, unless discharge would be more effectively opposed by avoiding that action. (2) If the petition for relief in bankruptcy was filed before October 8, 1998 and more than seven years of the repayment period on the loan (excluding any applicable suspension of the repayment period defined in 34 CFR 682.402(m)) have passed before the borrower filed the petition, the institution may not oppose a determination of dischargeability requested under 11 U.S.C. 523(a)(8)(B) on the ground of undue hardship. (3) In any other case, the institution must determine, on the… | ||||
| 34:34:3.1.3.1.33.4.17.1 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.51 Special definitions. | ED | [52 FR 45758, Dec. 1, 1987, as amended at 59 FR 61412, Nov. 30, 1994; 65 FR 65690, Nov. 1, 2000; 74 FR 55661, Oct. 28, 2009; 82 FR 31913, July 11, 2017] | The following definitions apply to this subpart: (a) Academic year or its equivalent for elementary and secondary schools and special education: (1) One complete school year, or two half years from different school years, excluding summer sessions, that are complete and consecutive and generally fall within a 12-month period. (2) If such a school has a year-round program of instruction, the Secretary considers a minimum of nine consecutive months to be the equivalent of an academic year. (b) Academic year or its equivalent for institutions of higher education: A period of time in which a full-time student is expected to complete— (1) The equivalent of 2 semesters, 2 trimesters, or 3 quarters at an institution using credit hours; or (2) At least 900 clock hours of training for each program at an institution using clock hours. (c) Title I Children: Children of ages 5 through 17 who are counted under section 1124(c)(1) of the Elementary and Secondary Education Act of 1965, as amended. (d) Child with a disability: A child or youth from ages 3 through 21, inclusive, who requires special education and related services because he or she has one or more disabilities as defined in section 602(3) of the Individuals with Disabilities Education Act. (e) Community defender organizations: A defender organization established in accordance with section 3006A(g)(2)(B) of title 18, United States Code. (f) Early intervention services: Those services defined in section 632(4) of the Individuals with Disabilities Education Act that are provided to infants and toddlers with disabilities. (g) Educational service agency: A regional public multi-service agency authorized by State law to develop, manage, and provide services or programs to local educational agencies as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended. (h) Elementary school: A school that provides elementary education, including education below grade 1, as determined by— (1) State law; or (2) The Secreta… | ||||
| 34:34:3.1.3.1.33.4.17.10 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.60 Cancellation for volunteer service—Perkins loans, NDSLs and Defense loans. | ED | [52 FR 45758, Dec. 1, 1987, as amended at 57 FR 32347, July 21, 1992. Redesignated at 59 FR 61413, Nov. 30, 1994, as amended at 64 FR 58314, Oct. 28, 1999] | (a)(1) An institution must cancel up to 70 percent of the outstanding balance on a Perkins loan, and 70 percent of the outstanding balance of an NDSL made on or after October 7, 1998, for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs). (2) An institution must cancel up to 70 percent of the outstanding balance on an NDSL or Defense loan for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs) performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note. (b) Cancellation rates are— (1) Fifteen percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second twelve-month periods of service; (2) Twenty percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth twelve-month periods of service. | ||||
| 34:34:3.1.3.1.33.4.17.11 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.61 Discharge for death or disability. | ED | [52 FR 45758, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988. Redesignated and amended at 59 FR 61413, 61415, Nov. 30, 1994; 64 FR 58315, Oct. 28, 1999; 65 FR 65690, Nov. 1, 2000; 66 FR 44007, Aug. 21, 2001; 72 FR 61998, Nov. 1, 2007; 73 FR 35494, June 23, 2008; 73 FR 36793, June 30, 2008; 74 FR 55664, Oct. 28, 2009; 74 FR 55987, Oct. 29, 2009; 77 FR 66125, Nov. 1, 2012; 81 FR 76078, Nov. 1, 2016; 84 FR 65007, Nov. 26, 2019; 86 FR 46981, Aug. 23, 2021; 87 FR 66043, Nov. 1, 2022] | (a) Death. (1) An institution must discharge the unpaid balance of a borrower's Defense, NDSL, or Federal Perkins loan, including interest, if the borrower dies. The institution must discharge the loan on the basis of— (i) An original or certified copy of the death certificate; (ii) An accurate and complete photocopy of the original or certified copy of the death certificate; (iii) An accurate and complete original or certified copy of the death certificate that is scanned and submitted electronically or sent by facsimile transmission; or (iv) Verification of the borrower's death through an authoritative Federal or State electronic database approved for use by the Secretary. (2) Under exceptional circumstances and on a case-by-case basis, the chief financial officer of the institution may approve a discharge based upon other reliable documentation of the borrower's death. (b) Total and permanent disability as defined in § 674.51(aa)(1). (1) General. (i) A borrower's Defense, NDSL, or Perkins loan is discharged if the borrower becomes totally and permanently disabled, as defined in § 674.51(aa)(1), and satisfies the additional eligibility requirements in this section. (ii) For purposes of paragraph (b) of this section, a borrower's representative or a veteran's representative is a member of the borrower's family, the borrower's attorney, or another individual authorized to act on behalf of the borrower in connection with the borrower's total and permanent disability discharge application. References to a “borrower” or a “veteran” include, if applicable, the borrower's representative or the veteran's representative for purposes of applying for a total and permanent disability discharge, providing notifications or information to the Secretary, and receiving notifications from the Secretary. (2) Discharge application process for borrowers who have a total and permanent disability as defined in § 674.51(aa)(1 ) . (i) If the borrower notifies the institution that the borrower claims to be totally and pe… | ||||
| 34:34:3.1.3.1.33.4.17.12 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.62 No cancellation for prior service—no repayment refunded. | ED | [52 FR 45758, Dec. 1, 1987. Redesignated at 59 FR 61413, Nov. 30, 1994] | (a) No portion of a loan may be cancelled for teaching. Head Start, volunteer or military service if the borrower's service is performed— (1) During the same period that he or she received the loan; or (2) Before the date the loan was disbursed to the borrower. (b) The institution shall not refund a repayment made during a period for which the borrower qualified for a cancellation unless the borrower made the payment due to an institutional error. | ||||
| 34:34:3.1.3.1.33.4.17.13 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.63 Reimbursement to institutions for loan cancellation. | ED | [52 FR 45758, Dec. 1, 1987. Redesignated and amended at 59 FR 61413, 61415, Nov. 30, 1994] | (a) Reimbursement for Defense loan cancellation. (1) The Secretary pays an institution each award year its share of the principal and interest canceled under §§ 674.55 and 674.59(a). (2) The institution's share of cancelled principal and interest is computed by the following ratio: Where I is the institution's capital contribution to the Fund, and F is the Federal capital contribution to the Fund. Where I is the institution's capital contribution to the Fund, and F is the Federal capital contribution to the Fund. (b) Reimbursement for NDSL and Federal Perkins loan cancellation. The Secretary pays an institution each award year the principal and interest canceled from its student loan fund under §§ 674.53, 674.54, 674.56, 674.57, 674.58, 674.59(b), and 674.60. The institution shall deposit this amount in its Fund. | ||||
| 34:34:3.1.3.1.33.4.17.14 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.64 Discharge of student loan indebtedness for survivors of victims of the September 11, 2001, attacks. | ED | [71 FR 78078, Dec. 28, 2006, as amended at 72 FR 55053, Sept. 28, 2007] | (a) Definition of terms. As used in this section— (1) Eligible public servant means an individual who— (i) Served as a police officer, firefighter, other safety or rescue personnel, or as a member of the Armed Forces; and (ii)(A) Died due to injuries suffered in the terrorist attacks on September 11, 2001; or (B) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001. (2) Died due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual died as a direct result of these crashes. (3) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual became permanently and totally disabled as a direct result of these crashes. (i) An individual is considered permanently and totally disabled if— (A) The disability is the result of a physical injury to the individual that was treated by a medical professional within 72 hours of the injury having been sustained or within 72 hours of the rescue; (B) The physical injury that caused the disability is verified by contemporaneous medical records created by or at the direction of the medical professional who provided the medical care; and (C) The individual is unable to work and earn money due to the disability and the disability is expected to continue indefinitely or result in death. (ii) If the injuries suffered due to the terrorist-related aircraft crashes did not make the individu… | ||||
| 34:34:3.1.3.1.33.4.17.15 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.65 Severability. | ED | [87 FR 66046, Nov. 1, 2022] | If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby. | ||||
| 34:34:3.1.3.1.33.4.17.2 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.52 Cancellation procedures. | ED | [52 FR 45758, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988; 59 FR 61413, Nov. 30, 1994; 62 FR 50848, Sept. 26, 1997; 64 FR 58313, Oct. 28, 1999; 72 FR 55053, Sept. 28, 2007; 78 FR 65805, Nov. 1, 2013] | (a) Application for cancellation. To qualify for cancellation of a loan, a borrower shall submit to the institution to which the loan is owed, by the date that the institution establishes, both a written request for cancellation and any documentation required by the institution to demonstrate that the borrower meets the conditions for the cancellation requested. (b) Part-time employment. (1) An institution may refuse a request for cancellation based on a claim of simultaneously teaching in two or more schools or institutions if it cannot determine easily from the documentation supplied by the borrower that the teaching is full-time. However, it shall grant the cancellation if one school official certifies that a teacher worked full-time for a full academic year. (2) An institution may refuse a request for cancellation based on a claim of simultaneous employment as a nurse or medical technician in two or more facilities if it cannot determine easily from the documentation supplied by the borrower that the combined employment is full-time. However, it shall grant the cancellation if one facility official certifies that a nurse or medical technician worked full-time for a full year. (c) Break in service. (1) If the borrower is unable to complete an academic year of eligible teaching service due to a condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2601, et seq. ), the borrower still qualifies for the cancellation if— (i) The borrower completes one half of the academic year; and (ii) The borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for purposes of salary increases, tenure, and retirement. (2) If the borrower is unable to complete a year of eligible service under §§ 674.56, 674.57, 674.59, or 674.60 due to a condition that is covered under the FMLA, the borrower still qualifies for the cancellation if the borrower completes at least six consecutive months of eligible service. (d) Cancellation… | ||||
| 34:34:3.1.3.1.33.4.17.3 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.53 Teacher cancellation—Federal Perkins, NDSL and Defense loans. | ED | [59 FR 61413, Nov. 30, 1994, as amended at 64 FR 58313, Oct. 28, 1999; 74 FR 55662, Oct. 28, 2009] | (a) Cancellation for full-time teaching in an elementary or secondary school serving low-income students. (1)(i) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins loan or an NDSL made on or after July 23, 1992, for full-time teaching in a public or other nonprofit elementary or secondary school. (ii) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note. (iii) An institution must cancel up to 100 percent of the outstanding balance of a Federal Perkins, NDSL, or Defense loan for teaching service that includes August 14, 2008, or begins on or after that date, at an educational service agency. (2) The borrower must be teaching full-time in a public or other nonprofit elementary or secondary school that— (i) Is in a school district that qualified for funds, in that year, under part A of title I of the Elementary and Secondary Education Act of 1965, as amended; and (ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's or educational service agency's total enrollment is made up of title I children. (3) For each academic year, the Secretary notifies participating institutions of the schools and educational service agencies selected under paragraph (a) of this section. (4)(i) The Secretary selects schools and educational service agencies under paragraph (a)(1) of this section based on a ranking by the State education agency. (ii) The State education agency must base its ranking of the schools and educational service agencies on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools and educational service agencies. (5) The Secretary considers all elemen… | ||||
| 34:34:3.1.3.1.33.4.17.4 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.54 [Reserved] | ED | ||||||
| 34:34:3.1.3.1.33.4.17.5 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.55 Teacher cancellation—Defense loans. | ED | [52 FR 45758, Dec. 1, 1987. Redesignated and amended at 59 FR 61413, 61414, Nov. 30, 1994] | (a) Cancellation for full-time teaching. (1) An institution shall cancel up to 50 percent of the outstanding balance on a borrower's Defense loan for full-time teaching in— (i) A public or other nonprofit elementary or secondary school; (ii) An institution of higher education; or (iii) An overseas Department of Defense elementary or secondary school. (2) The cancellation rate is 10 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete year, or its equivalent, of teaching. (b) Cancellation for full-time teaching in an elementary or secondary school serving low-income students. (1) The institution shall cancel up to 100 percent of the outstanding balance on a borrower's Defense loan for full-time teaching in a public or other nonprofit elementary or secondary school that— (i) Is in a school district that qualifies for funds in that year under title I of the Elementary and Secondary Education Act of 1965, as amended; and (ii) Has been selected by the Secretary based on a determination that a high concentration of students enrolled at the school are from low-income families. (2)(i) The Secretary selects schools under paragraph (b)(1) of this section based on a ranking by the State education agency. (ii) The State education agency shall base its ranking of the schools on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools. (3) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on Indian reservations by Indian tribal groups under contract with BIA to qualify as schools serving low-income students. (4) For each academic year, the Secretary notifies participating institutions of the schools selected under paragraph (b) of this section. (5) The cancellation rate is 15 percent of the original principal loan amount, plus the interest on the unpaid balan… | ||||
| 34:34:3.1.3.1.33.4.17.6 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.56 Employment cancellation—Federal Perkins, NDSL and Defense loans. | ED | [59 FR 61414, Nov. 30, 1994, as amended at 64 FR 58314, Oct. 28, 1999; 72 FR 61997, Nov. 1, 2007; 74 FR 55662, Oct. 28, 2009] | (a) Cancellation for full-time employment as a nurse or medical technician. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after July 23, 1992, for full-time employment as a nurse or medical technician providing health care services. (2) An institution must cancel up to 100 percent of the outstanding balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for full-time service as a nurse or medical technician performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the borrower's promissory note. (b) Cancellation for full-time employment in a public or private nonprofit child or family service agency. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins loan or NDSL made on or after July 23, 1992, for service as a full-time employee in a public or private nonprofit child or family service agency who is providing services directly and exclusively to high-risk children who are from low-income communities and the families of these children, or who is supervising the provision of services to high-risk children who are from low-income communities and the families of these children. To qualify for a child or family service cancellation, a non-supervisory employee of a child or family service agency must be providing services only to high-risk children from low-income communities and the families of these children. The employee must work directly with the high-risk children from low-income communities, and the services provided to the children's families must be secondary to the services provided to the children. (2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for employment in a child or family service agency on or after October 7, 1998, if the cancellation benefits provided under this section a… | ||||
| 34:34:3.1.3.1.33.4.17.7 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.57 Cancellation for law enforcement or corrections officer service—Federal Perkins, NDSL, and Defense loans. | ED | [74 FR 55663, Oct. 28, 2009] | (a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after November 29, 1990, for full-time service as a law enforcement or corrections officer for an eligible employing agency. (2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL, or Defense loan made prior to November 29, 1990, for law enforcement or correction officer service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note. (3) An eligible employing agency is an agency— (i) That is a local, State, or Federal law enforcement or corrections agency; (ii) That is publicly-funded; and (iii) The principal activities of which pertain to crime prevention, control, or reduction or the enforcement of the criminal law. (4) Agencies that are primarily responsible for enforcement of civil, regulatory, or administrative laws are ineligible employing agencies. (5) A borrower qualifies for cancellation under this section only if the borrower is— (i) A sworn law enforcement or corrections officer; or (ii) A person whose principal responsibilities are unique to the criminal justice system. (6) To qualify for a cancellation under this section, the borrower's service must be essential in the performance of the eligible employing agency's primary mission. (7) The agency must be able to document the employee's functions. (8) A borrower whose principal official responsibilities are administrative or supportive does not qualify for cancellation under this section. (b) An institution must cancel up to 100 percent of the outstanding balance of a borrower's Federal Perkins, NDSL, or Defense loan for service that includes August 14, 2008, or begins on or after that date, as a full-time attorney employed in Federal public defender organizations or community defender organizations, established in accordance with section 3006A(g)(2) of ti… | ||||
| 34:34:3.1.3.1.33.4.17.8 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.58 Cancellation for service in an early childhood education program. | ED | [52 FR 45758, Dec. 1, 1987. Redesignated and amended at 59 FR 61413, 61415, Nov. 30, 1994; 64 FR 58314, Oct. 28, 1999; 74 FR 55663, Oct. 28, 2009] | (a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's NDSL or Federal Perkins loan, for service as a full-time staff member in a Head Start program. (2) An institution must cancel up to 100 percent of the outstanding balance on a Defense loan for service as a full-time staff member in a Head Start program performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note. (3) An institution must cancel up to 100 percent of the outstanding balance of a borrower's NDSL, Defense, or Federal Perkins loan for service that includes August 14, 2008, or begins on or after that date, as a full-time staff member of a pre-kindergarten or childcare program that is licensed or regulated by the State. (4) The Head Start, pre-kindergarten or child care program in which the borrower serves must operate for a complete academic year, or its equivalent. (5) In order to qualify for cancellation, the borrower's salary may not exceed the salary of a comparable employee working in the local educational agency of the area served by the local Head Start, pre-kindergarten or child care program. (b) The cancellation rate is 15 percent of the original loan principal, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching service. (c)(1) “Head Start” is a preschool program carried out under the Head Start Act (subchapter B, chapter 8 of title VI of Pub. L. 97-35, the Budget Reconciliation Act of 1981, as amended; formerly authorized under section 222(a)(1) of the Economic Opportunity Act of 1964). (42 U.S.C. 2809 (a) (1)) (2) A pre-kindergarten program is a State-funded program that serves children from birth through age six and addresses the children's cognitive (including language, early literacy, and early mathematics), social, emotional, and physical development. (3) A child care program is a … | ||||
| 34:34:3.1.3.1.33.4.17.9 | 34 | Education | VI | 674 | PART 674—FEDERAL PERKINS LOAN PROGRAM | D | Subpart D—Loan Cancellation | § 674.59 Cancellation for military service. | ED | [52 FR 45758, Dec. 1, 1987. Redesignated at 59 FR 61413, Nov. 30, 1994; 74 FR 55664, Oct. 28, 2009] | (a) Cancellation on a Defense loan. (1) An institution must cancel up to 50 percent of a Defense loan made after April 13, 1970, for the borrower's full-time active service starting after June 30, 1970, in the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard. (2) The cancellation rate is 12 1/2 percent of the original loan principal, plus the interest on the unpaid balance accruing during the year of qualifying service, for the first complete year of qualifying service, and for each consecutive year of qualifying service. (3) Service for less than a complete year, including any fraction of a year beyond a complete year of service, does not qualify for military cancellation. (b) Cancellation of an NDSL or Perkins loan. (1) An institution must cancel up to 50 percent of the outstanding balance on an NDSL or Perkins loan for active duty service that ended before August 14, 2008, as a member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard in an area of hostilities that qualifies for special pay under section 310 of title 37 of the United States Code. (2) The cancellation rate is 12 1/2 percent of the original loan principal, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete year of qualifying service. (c)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL loan for a borrower's full year of active duty service that includes August 14, 2008, or begins on or after that date, as a member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard in an area of hostilities that qualifies for special pay under section 310 of title 37 of the United States Code. (2) The cancellation rate is 15 percent for the first and second year of qualifying service, 20 percent for the third and fourth year of qualifying service, and 30 percent for the fifth year of qualifying service. (d) Service for less than a complete year, including any fraction of a year beyond a complete … |
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