Default Management Plan for the Federal Perkins Loan Program at Chesapeake College
As a small community college, our participation in the Federal Perkins Loan program provides the necessary means in funding higher education for many of our students. Students who are awarded and choose to accept this loan must be committed to repaying this loan and abiding by all program requirements, such as; completing the Entrance Interview. The student will sign a promissory note, promising to repay this federal debt, understand their rights and responsibilities, and complete a personal data sheet before the funds will be disbursed.
This federal student loan is repaid with an interest rate of 5% and payments begin after the student ceases attendance or drops to less than half-time status. Chesapeake College values this low interest federal loan program and wants to do everything it can to preserve its integrity. The future is at risk if students do not adhere to their repayment schedules, consequently defaulting on their commitment to repay this federal loan. As a proactive measure to insure the viability of this loan program, Chesapeake College has instituted a default management plan.
The United States Department of Education has the right to sanction any school with a default rate of 50% or higher 3 years consecutively. As a pre-emptive measure, Chesapeake College has instituted the following policies and procedures in an effort to reduce our current default rate. In addition to meeting the financial eligibility requirements and complete an Entrance Interview, students will have to meet the additional guidelines listed below:
- All Federal Perkins Loan recipients must maintain a 2.5 semester and cumulative grade point average and meet Satisfactory Academic Program for attempted credits for any loan consideration or renewal.
- Students must provide a physical address in addition to their P.O. Box on their college admissions application as well as all entrance/exit documents.
- Students must have a declared major and have an academic plan coordinated with their academic advisor.
- Students must meet the May 1st deadline as it proves they understand the importance of deadlines.
- Students must meet with the Director of Financial Aid prior to signing their promissory note and at the end of the Fall term before the pay by date for Spring. Students will be advised to make appointments to fulfill this requirement. Failure to meet this requirement will result in forfeiture of the Federal Perkins Loan.
- No loan funds will be disbursed if there is missing information on their Personal Data Sheets.
- Students will be required to utilize their campus email address on Skipjack so that important reminders can be easily addressed to loan recipients.
- Students will complete a "test" after completing their Entrance Interview, to review the information learned and reinforce the importance of loan repayment and default prevention.
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