Perkins Loan Borrower Disclosure


Perkins Loan Rehabilitation

Federal Perkins Student Loan rehabilitation is achieved by making nine consecutive, on-time monthly payments on a defaulted Perkins Loan. Rehabilitation removes a loan from default. (A borrower may regain eligibility for Title IV funds after six consecutive, on-time monthly payments; however the loan is still considered to be in default.) A borrower must make a request to Sacred Heart University (or its contracted collection agency) in order to pursue rehabilitation of a defaulted Perkins Loan.

  • The nine payments must be made monthly, even if the borrower had been on a quarterly or semi-annual repayment plan prior to defaulting.
  • There can be no gaps in the nine payments. If a borrower misses a payment, the "streak" is broken and the borrower must begin again in the attempt to make the nine consecutive on-time monthly payments. Nor can two payments made in the same month be considered for different months.
  • The definition of "on-time" is at the discretion of the school (on the due date).
  • The payment amount is determined jointly by the Sacred Heart University (or its representative, i.e. collection agency) and the borrower. There is no minimum payment amount. This is true even if the borrower's promissory note dictates a minimum payment amount; the terms of the promissory note do not apply to defaulted loans.
  • A borrower may rehabilitate a loan only once, but there is not limit to the number of times a borrower may attempt to make nine consecutive, on-time monthly payments.
  • Borrowers who have a judgment rendered on their defaulted Perkins Loan are not eligible for rehabilitation.

The benefits of rehabilitation are the following:

  • restoration of Title IV eligibility;
  • restoration of benefits and privileges of the promissory note and a return to regular repayment status;
  • a new repayment period of up to ten years; and
  • removal of the default from the borrower's credit history.

As required by the Federal Perkins Loan Program Extension Act of 2015 (the Extension Act), enacted on December 18, 2015, institutions must make the following disclosures available to Perkins Loan borrowers.

Perkins Loan Disclosure Information

The Perkins Loan program has been extended through September 30, 2017. In addition to disclosures required under 34 CFR 674.16, under the Extension Act, a school must provide the following disclosures to each Perkins Loan borrower before it makes a first disbursement of a Perkins Loan.

The disclosures are as follows:

  • The Federal Perkins Loan program will expire September 30, 2017. No new loans will be granted after this date and future extensions to the Perkins Loan program are prohibited.
  • Repayment and forgiveness benefits available to Federal Direct Loan borrowers are NOT available to Perkins Loan borrowers.
  • A Perkins Loan borrower is eligible to consolidate their Perkins Loan(s) into a Direct Consolidation Loan. Please click here for additional information and for the benefits of consolidation: 
  • As of June 30, 2017 these are the interest rates for:
    • Federal Direct Parent/Grad PLUS Loans – 7.00%
    • Federal Direct Subsidized Loans – 4.45%
    • Federal Direct Unsubsidized Loans – 4.45%
    • Perkins Loans – 5%
  • Students can review all Federal loan aggregate borrowing limits by clicking here.

Please note that we are required to award a Federal Direct Loan (subsidized/unsubsidized) as part of your Perkins Loan award. You have the right to decline/adjust these Federal Direct Loan amounts as you see fit but these awards may still impact your Perkins Loan amount eligibility.

Perkins Loan Applications are available in the Student Financial Assistance Office. Students are required to complete this form in person with a Financial Aid Counselor.

For additional questions please contact our office at 203-371-7980 or