Federal Perkins Loan Program
The Federal Perkins Loan, or Perkins Loan was a need-based student loan offered by the U.S. Department of Education to assist students in funding their education. Under federal law, the authority for schools to make new Federal Perkins Loans ended on September 30, 2017, and final disbursements were permitted through June 30, 2018. As a result, students can no longer receive Perkins Loans. For students that took out a Perkins loan and are now in a repayment status, please review the information below to understand your rights and responsibilities as a borrower.
Who to Contact
If you have any questions regarding your Federal Perkins Loan or need to complete an Exit Interview, please call the USBS Loans & Collections office at (901) 678-2712.
Exit Interviews: An exit interview is a federal requirement of the Perkins Loan Program. An exit interview must be scheduled if you do any of the following:
- Take less than 6 units in a semester.
- Take a leave of absence (even if for only one semester).
- Withdraw from school.
- Transfer to another school.
- Graduate -- at the end of the semester in which you graduate.
When do I begin repayment?
As stated in the Promissory Note, you will receive a nine (9) month grace period that begins after you are no longer registered at least half-time at University of Memphis. During that grace period, no interest will accrue. Payments are due monthly. After the grace period has ended, you will accrue one (1) month of interest before your first payment is due.
Your minimum loan payment will be calculated according to your promissory note. Presently, the minimum monthly payment is $40.00 on a Federal Perkins loan. This amount is based on the terms of the promissory note that you signed. Older promissory notes may have different amounts. Please refer to your promissory note to verify the amount that pertains to you. Remember this is a minimum payment. Your payment may be larger depending on the amount you borrow. There is a maximum repayment period of ten (10) years.
There are no prepayment penalties on your student loans.
Who is ECSI?
ECSI (Educational Computer Systems, Incorporated) provides billing services for the UofM Perkins Loan Program. When you receive a Perkins Loan, information about your loan is transferred to ECSI. Upon entering repayment, you will receive bills from ECSI as scheduled and should make payments directly to them. They will credit your account and notify the university. ECSI also receives and processes changes of address and student deferment/cancelation forms.
Student Financial Services personnel at UofM are in daily contact with ECSI and have online access to loan information. They also maintain individual files of correspondence, Promissory Notes, and record of any special activities. Should you have questions regarding your billing or a problem with your payment schedule, please contact USBS Loans & Collections office at (901) 678-2712 at UofM (not ECSI). Although you will be sending your payment to ECSI, the money is owed to UofM. Only UofM can make special arrangements with you.
What types of deferments are available?
You may defer or delay the repayment of your loan for a defined period of time. The following types of deferments are available depending on when you received your Perkins Loan. You can obtain a copy of the Request for Deferment form by downloading it from the ECSI forms page.
- In School - at least a half-time student
- Graduate Fellowship
- Rehabilitation Training
- Residency in Dentistry
- Unemployment
- Economic Hardship
- Forbearance
- Hardship
- Military, Peace Corps or VISTA
- Volunteer Service
- Temporary, Total Disability (Borrower, spouse or dependent)
- Internship/Residency Program
What types of cancelations are available?
You may cancel all or a portion of your loan over a period of time depending on when you received your Perkins Loan. You can obtain a copy of the Request for Cancelation form by downloading it from the ECSI forms page.
- Teacher in a qualified elementary or secondary school
- Special Education Teacher
- Headstart Staff Member
- Peace Corps/VISTA Volunteer
- Law Enforcement
- Medical Technician/Nurse
- Work with High Risk Children
- Early Intervention Services
- Child and Family Services
How do I maintain a good credit record?
For most students, a Perkins Loan is the first experience with credit. Student loans can be an excellent way to establish a good credit rating. Pay your loan promptly each month or quarter. Here are some tips on establishing good credit.
- Notify Student Financial Services collection personnel or ECSI of any change of address or name.
- Send the payment due each month or quarter even if you do not receive a bill. Send extra payments to reduce your total interest when you can.
- If you are eligible for any of the aforementioned deferments or cancelations, file the appropriate form on or before your payment due date.
- Always call USBS Loans & Collection staff member at (901) 678-2712 if you have a question or problem.
- Never ignore correspondence or payment requests, no matter what the circumstances.
What is a Federal Consolidation loan?
Consolidation Loans offer you the opportunity to combine different types of federal student loans. Consolidation is an option that will simplify your repayment. If you have a William D. Ford Direct Loan with Stafford and/or Perkins Loans you can currently consolidate through the Department of Education by contacting the USDE Consolidation Loan Information Center online, or by calling 800-557-7392.
What if I have problems repaying my loan?
If you have a problem making scheduled payments on your loan, contact UofM Loans & Collections office immediately at (901) 678-2712. A USBS Loans & Collections staff member will work with you to help you avoid the costs and adverse consequences of delinquency and having your loan classified as in default. Deferment and forbearance are options that can help you avoid default and maintain a positive credit history.
What happens if I do not repay my loan?
The federal due diligence requirements for collection of Federal Perkins Loans have become increasingly strict. If you ignore bills or move without notifying Student Financial Services or ECSI, the following steps will be taken:
Transcript Hold
A hold will be placed on your transcripts and any future re-admission to UofM. This hold will not be released until the past-due portion of your loan is cleared.
Late Fees
If your account goes more than thirty (30) days past due, you will be assessed late fees. A late charge, not to exceed twenty percent (20%) of the scheduled payment, will be imposed.
Credit Reporting
When you apply for credit of any kind, the potential creditor usually checks your credit record through a credit reporting service. A delinquent student loan on that record will be an obstacle to your obtaining a home loan, car loan, credit card, or any other form of credit. Even when you clear the delinquency, the fact that the loan was once delinquent will remain on your credit report.
Referral to a Collection Agency
The regulations that govern the student loan program require that the University of Memphis refer to an outside collection agency any past-due borrower who has not responded to our internal collection efforts. Collection agencies are in the business of pursuing collections vigorously and aggressively. If the circumstances warrant, they will proceed with litigation. You may be responsible for all court costs, attorney fees, and collection costs, in addition to the entire unpaid principal balance plus interest. A court judgment on your credit record is detrimental to both your career and private life. Your wages may be garnished and your credit report will be affected. In addition, you must pay all the costs of the collection agency. The fee the collection agency charges to collect this delinquent debt is known as the collection cost or contingency fee.
Acceleration
Your promissory note includes an acceleration clause. This means that the university can declare the entire unpaid balance of your loan due and payable even if only one payment is late.
Assignment to the Department of Education
The Department of Education recommends that we assign all Federal Perkins Loans in default to the federal government. Once this assignment takes place, you owe the debt directly to the U.S. Treasury. The federal government has hired special agencies to collect on these defaulted loans. Once the university has assigned your loan, you must deal with the federal government or their agents exclusively. Although you will still have to repay the loan, the money you pay to the federal government is not returned to UofM to be used by other students.
Don't let any of these happen to you!
Remember, if you have a problem making your payments, call USBS Loans & Collections office at 901-678-2712. Our staff will work with you to help you avoid default.