For nearly six decades, the Federal Perkins Loan Program provided needy students with financial aid that helped make going to college more accessible and affordable. On Sept. 30, that loan program expired. It expired primarily because Senator Lamar Alexander, a Republican from Tennessee who chairs the Senate education committee, objected to extending the program, preferring instead to focus on reforming the student financial aid system as a whole.
I am not writing to critique the rules of the U.S. Senate or the merits of the broader goal of reforming the complex system of federal financial aid. I do, however, want to raise awareness about the ramifications of this action -- or inaction -- for students in Wisconsin and around the country. Given growing student need and the clear individual and societal returns on investment from this program, I urge support for ongoing efforts to revive the Perkins Loan program.
I often tell community groups, business leaders and decision makers that “demographics are our destiny.” According to the National Center for Education Statistics, over half of the students in American public schools in 2013 qualified for free or reduced-price lunch -- an indicator that they are economically disadvantaged. In Wisconsin, 41 percent of the students in public schools in 2013 were considered low income, while about 30 percent of UW students receive a Pell Grant.
As educators, we know that the path to social mobility and economic prosperity winds its way directly through our classrooms. Unless we can accommodate the growing numbers of needy students in the education pipeline, the consequences for students, for higher education and for our country’s economic and social future are enormous. Investing in these students’ education is an investment in our nation’s future workforce as well as our economic leadership in the global economy.
It is essential that we ensure the long-term financial solvency and stability of programs like Perkins that are designed to help economically disadvantaged people get into and through the education pipeline, opening doors to life-altering opportunities for students and their families.
That’s why higher education leaders originally asked the Congress to extend the Federal Perkins Program until the Higher Education Act is reauthorized. The Perkins Loan program has been a vital resource for thousands of the neediest students over the years. In the UW System alone, the program disbursed nearly $29 million to more than 15,800 students in 2013-14. Put another way, the program directly impacted nearly one in every 11 students enrolled in the system that year.
Certainly, some of the details of the program can or should be re-evaluated, such as the distribution formula, but those are indeed just details: the program generally is irreplaceable in terms of the benefits it provides to meet the financial demands of a growing population of needy students.
Ensuring that the Perkins Loan program continues is one important tool to keep college as a viable option, with significant repercussions for upward socioeconomic mobility. A recent paper issued by the Federal Reserve Bank of San Francisco reported that children born into households in the poorest 20 percent income bracket are six times more likely to reach the top 20 percent if they complete a college education.
These are exactly the students who are being caught in the middle by the inaction of Congress to extend the Perkins Loan program. Real students at our institutions are feeling the effects. Thousands of first-time borrowers will get Perkins Loan funding this year but will not receive a loan next year if the program expires as scheduled, potentially increasing their cumulative debt load or even impeding their progress to completing their degree. Students who have maxed out on unsubsidized and subsidized direct loans may be forced to seek private loans with higher interest rates or drop out of school altogether. Sadly, this contributes to more borrowing, more debt and ever-escalating loan repayments.
Congress can and must do better for our students. It should revive and extend the Federal Perkins Loan Program. After all, we share the same goals: to help students overcome barriers, have access to a high-quality education and become productive members of a skilled workforce. We all benefit.
Ray Cross is president of the University of Wisconsin System.
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