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A Plea for Perkins

A Plea for Perkins
September 23, 2010

WASHINGTON – Hoping to gain momentum for an amendment that would delay the upcoming demise of the federal Perkins Loan Program, the House Democrat leading the effort held a hearing here on Wednesday to declare the program's importance.

And although Representative John Spratt (D-S.C.), the amendment’s sponsor, says it won’t pass this year without a “miracle,” he is optimistic that with the support of some members of the House Budget Committee, as well as the colleges that rely on the loans, the amendment has a shot at approval next year.

“Perkins Loan availability is a crucial component of increasing enrollment,” said Representative Timothy Bishop (D-N.Y.), who is co-sponsoring the amendment with Spratt and Representatives Cathy McMorris Rodgers (R-Wash.) and George Miller (D-Calif.).

As of now, the program has only two years to live. The Obama administration failed to expand and modify Perkins, which works with colleges to award low-interest loans to financially needy students, in the financial aid overhaul earlier this year. Congress hasn’t provided any new money for the program since 2004, but Perkins is still a $1-billion-a-year program in which 1,800 colleges participate. In 2009, colleges awarded 495,000 new Perkins loans, at an average of $2,231 per student.

Supporters of Perkins say that to eliminate it will shut out college access to low-income students and eliminate the jobs of campus officials and loan servicers who help distribute the funds.

“The real message here is, we need to save it,” said Cynthia A. Littlefield, director of federal relations at the Association of Jesuit Colleges and Universities. If it’s expanded, Congress can focus on “redefining a new Perkins Loan program,” she said.

Perkins funds pass through a “revolving account” of college and government money when students repay their loans, or have the loans cancelled (or forgiven) because they take certain public service jobs. Then, the college awards the money to another student. The Perkins Loan Extension Act of 2010 would give colleges an extra year -- until Oct. 1, 2013 – before they have to start returning the federal funds they have received and recycled into new student loans. (The original termination date was set when the Higher Education Act was reauthorized in 2008.)

Sarah Bauder, assistant vice president of enrollment services and student financial aid at the University of Maryland at College Park, testified Wednesday that despite its comparatively small distribution -- the university awards $1.5 million in Perkins funds, compared to $90 million in Stafford loans and $30 million in Pell Grants -- the program is “the David among the Goliaths of other aid.”

“By its very nature, the Perkins Loan Program provides schools the flexibility to provide additional aid to needy students. The importance of this flexibility cannot be overstated,” Bauder said. “Financial aid administrators work where the rubber meets the road and have a unique perspective that allows them to assess students’ and families’ ability to pay for college in ways that aid applications will never be able to assess. When aid administrators see students and families struggling with unique circumstances, they need some flexibility to deliver funds to ensure the success of these students.”

The hearing of the House Committee on the Budget was sparsely attended, as people made their way in and out throughout, but a couple of representatives did declare their support for extending Perkins. Some are pushing not only for the extension, but for a more permanent solution to funding the program.

“A tough budget means we’re going to have to make tough decisions,” Representative Bob Etheridge (D-N.C.) said. “But education is not an expenditure. It’s an investment.”

The program, created in 1958, often awards loans to students who are “just beyond Pell-Grant eligible,” Bishop said, making it an indispensable source of funding for the students who fall between the financial aid cracks. “I don’t mean to engage in heresy here, but I sometimes think that we focus too much on Pell and not enough on the campus-based programs.”

A Georgetown University senior, Joseph Hill, testified that Perkins “without a doubt” allowed him to attend his dream institution. The son of an overworked mother and a father with a neuromuscular disease (both of whom attended the hearing), he received $26,000 in Georgetown scholarships but still didn’t think his family would be able to afford the education.

“And then, there was a Perkins loan, which helped my parents fill that gap,” Hill testified. “Last week, I was talking to my mother, and without hesitation, she said, ‘It still wouldn’t have worked without that Perkins Loan.’ ”

 

 

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