Department Issues Dear Colleague on Long Term Debt

The Department of Education has revoked Dear Colleague letter GEN-01-02 on the use of long-term debt in the primary reserve ratio. The new policy, which is effective for all fiscal years ending on or after December 31, 2002, accurately reflects the regulatory language. Under this revised policy, all debt incurred for long term purposes is counted in the primary reserve ratio, up to the total of the institution's net property, plant, and equipment. You can view a copy of GEN-03-08 on the IFAp web site at http://www.ifap.ed.gov/dpcletters/GEN0308.html

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