Perkins Student Loans: Need for Better Controls Over Loans Recovered from Closed Schools.

摘要

The Perkins Student Loan Program establishes federally subsidized revolving loan funds at postsecondary schools that provide 10-year, 5-percent loans to financially needy students. Schools must provide at least $1 of their own funding for every $9 provided by the federal government. Each school is responsible for administering its fund; including making loans, collecting loan payments, and keeping all loan records. During the 1989-90 school year, 3,230 schools participated in the program and disbursed about $883 Million in Perkins loans. As of June 30, 1989, cumulative federal appropriations had totaled about $6 billion since the program was enacted in 1958 as the National Defense Student Loan Program. If a school closes, a federal regulation (34 C.F.R 674.17) requires the school to (1) return to the Department of Education the federal share of its fund's liquid assets (cash balance) and (2) transfer its outstanding Perkins loans to the Department or another institution approved by the Department. The total amount of assets a school has in its Perkins fund is referred to in this report as the net federal investment.