Schools begin suing students for not paying back Perkins Loans
Some universities have begun suing graduates for defaulting on their student loans.
Yale University, the University of Pennsylvania and George Washington University were used as examples in a recent Bloomberg News report. The universities are targeting recipients of Perkins Loans.
Perkins Loans are subsidized loans, which are usually awarded to lower-income students with outstanding financial need.
The loans are administered directly by participating institutions with a mixture of funds from the school and the federal government.
Julie Wilson, associate director of client services for the Office of Scholarships and Financial Aid at Central Michigan University, said in an email that due to limited funding, only on-campus undergraduate students are awarded Perkins Loans.
Students may borrow up to $5,000 annually, or $20,000 maximum for undergraduate study.
Central Michigan University has a variety of ways to make sure students pay back their loans.
“The university does mail letters to students who are 30, 60 and 90 days late on loan payments,” Wilson said. “These warning letters remind students of their obligation to repay their federal loans and to contact their loan servicer regarding repayment options.”
She said students begin receiving loan repayment information from their loan servicer prior to graduation and should work with them to determine their best loan repayment option.
According to Time Magazine, the University of Pennsylvania filed at least 12 lawsuits to get back money from Perkins Loans from last year.
Yale sued a former student for $6,500 in loans and George Washington University sued a student for $15,000 in unpaid tuition costs and $7,000 in Perkins Loans.
“The Office of Scholarships and Financial Aid recommends students meet with a financial aid adviser any time they encounter questions or confusion regarding their loan options, eligibility and repayment,” Wilson said. “Financial aid advisers are available in Warriner Hall 202 for appointments and should be the student’s first point of contact regarding financial aid eligibility, the financial aid process and repayment options.”
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