“The Federal Perkins Student Loan Program is in peril,” The Chronicle of Higher Education reports. “…With Republicans set to control both chambers of Congress come January, and two key allies heading home after losing their seats, supporters are deeply worried the program will be abolished in the name of simplification. …
Senators Lamar Alexander (R-Tenn.) and Michael Bennet (D-Colo.) have recently reintroduced, “the Fast Act” a draft bill to simplify the process of apply for and receiving federal financial aid to attend college, allow year-round use of Pell Grants, discourage over-borrowing and simplify repayments. Their formula for financial alid is being dubbed “one loan, one grant.”
COHEAO (Coalition of Higher Education Assistance Organizations) held their annual conference last week in pentagon City, VA. COHEAO is proposing a “Campus Flex Program.” Campus Flex offers greater flexibility to campuses and allocates funds between the campus based aid programs, SEOG, Perkins Loans, and Work Study, giving administrators the ability to provide consistency in financial aid packages for students as they move through their college careers. For example, a campus could find that there are not enough Work Study eligible jobs for its students, or that eligible students are accepting jobs outside of the Work Study Program. In either case, it could be beneficial to allocate more funding that year to SEOG or Perkins Loans. Details of the program may be found on the Coalition’s website at www.coheao.com.
The Perkins Loan Program is a federal student aid program that provides funds in the form of low-cost loans to undergraduate and graduate students who can demonstrate exceptional financial need. With a fixed interest rate of 5% and the interest paid by the federal government while the student is in school at least half-time and during a 9-month grace period after graduation or less than half-time enrollment., undergraduates may borrow up to $5,500 per year and graduate students up to $8,000 per year in the Perkins program. The Perkins Loan Program is also well known for its forgiveness programs for teachers, fire fighters, nurses, librarians, law enforcement officers, and other service fields.
The program is set to fade with the sunset on September 30, 2015 if the program is not reauthorized by Congress. Should the Higher Education Act continue to be extended prior to reauthorization, The Perkins Loan Program will also be extended.
With the future of the Perkins Program unclear, The Department of Education (ED) has been issuing guidance in case the program is eliminated. The Department’s Office of Postsecondary Education issued a Dear Colleague letter January 30th that explains how the “grandfathering” of Perkins Loans to current borrowers may work should the program’s authority wind down on October 1, 2015.
The letter states that students who borrowed Perkins Loans on or before the 2014-15 academic year can keep borrowing Perkins Loans for five years or until they complete their program of study. This does mean that some students will be able to access low-cost Perkins Loans until they graduate, even if the program starts to wind down.
Since its inception in 1958, the Perkins Loan Program has been slated for elimination several times. Perkins was spared from elimination in 2010 when a grass roots movement of COHEAO members was able to find an advocate in Congress. Perkins Loans would have been eliminated in SAFRA (Student Aid and Fiscal Responsibility Act) a rider to the Health Care and Education Reconciliation Act of 2010, but the lanuage to eliminate Perkins was struck in order for the legislation to garner enough votes to pass.
If Perkins is to be preserved or the Campus Flex Program initiated in the next Reauthorization of the Higher Education Act, we must continue to cultivate support in both chambers of Congress and especially with members of the critical committees. A complete guide to aiding in the grass roots movement may be found on the COHEAO website. Your help is critical in getting our message heard.
You may also sign a petition showing your support for the Perkins Program at https://www.change.org/p/save-perkins-now.
REGIONAL VP OF BUSINESS DEVELOPMENT,