Perkins Loan Federal Student Aid Program Expires
10/12/2017 1:00 PM
Bipartisan legislation to extend the revolving loan program obstructed in the Senate.
The government’s oldest federal student aid program established in 1957 ended Sept. 30, despite bipartisan efforts in Congress to save it.
The Perkins Loan Program is a critical source of funding for students who may not qualify for other higher education loan options.
U.S. Sens. Tammy Baldwin, D-Wis.; Rob Portman, R-Ohio; Bob Casey, D-Pa.; and Susan Collins, R-Maine.; introduced legislation to extend the Perkins Loan Program for another two years, ACA International previously reported.
U.S. Sens. Dick Durbin, D-Ill.; Dianne Feinstein, D-Calif.; Ron Johnson, R-Wis.; Jack Reed, D-R.I.; and Jeanne Shaheen, D-N.H., are also original co-sponsors of the legislation. U.S. Reps. Mark Pocan, D-Wis., and Elise Stefanik, R-N.Y., introduced companion legislation to extend the Perkins Loan Program in the U.S. House of Representatives earlier this year.
Baldwin requested passage of the bipartisan legislation on Sept. 28, but it was “blocked,” according to a news release from her office.
Under the Perkins Loan Program, approximately 1,500 colleges and universities across the U.S. will not be able to offer the loans that provide approximately 500,000 students access to financial aid.
According to an article from Credible News, colleges and universities issue $1.2 billion each year to students who need financial aid through the Perkins Loan Program.
The U.S. Department of Education recently issued instructions to participating schools on winding down the program, according to the article.
“Congress hasn’t provided new funding for the Perkins Loan Program in more than a decade. But schools have kept the program going by making new loans from revolving funds that are replenished by payments made by existing borrowers,” Credible News reports.
The deadline for colleges and universities to return federal money left in those funds is Oct. 1, 2018, Kathleen A. Smith, acting assistant secretary for the Office of Postsecondary Education, said in the article.
While the authority for schools to make new loans under the program has expired, Smith said in the article that students approved for a loan who received part of their financial aid before Oct. 1 this year can continue to receive remaining payments through June 30, 2018.
Credible News reports, based on data from the National Association of Student Financial Aid Administrators, that about 528,000 students used Perkins Loans in the 2014/15 school year and received an average amount of $2,198.
The article also notes that the Perkins Loan Program expired for three months in 2015 before a two-year extension was passed for alternatives to be put in place. ACA International will continue to follow the status of the loan program.
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