Perkins Loans Gone, for Now
Posted By Eliana Osborn on December 7, 2015 at 3:51 pm
Before expiring at the end of September, Perkins Loans were an additional type of federal financial aid available for very poor families. Congress did not reauthorize the program though, despite the minimal costs, so it disappeared. Perkins has been in jeopardy since 2010, but some are still trying to resuscitate it.
The main push for bringing back Perkins comes from colleges and universities, those on the front lines of struggling students. Each campus creates individual financial aid packages for students, combining Pell grants, federal work study, subsidized and unsubsidized loans, education opportunity grants. Perkins loans were one of the tools schools could use to make the equation work for low-income students. The 500,000 college students who received Perkins loans last year now have one less option.
535 colleges and universities recently wrote to lawmakers requesting action on Perkins loans. The schools, along with higher education organizations, are asking for one of two steps. First, move forward with a bill that continues Perkins—a bill the House passed but the Senate let die—as a stand-alone bill. Alternately, they request that Perkins be attached to the government funding bill needed to move forward in December.
Ray Cross, president of the University of Wisconsin, wrote about the need for Perkins loans in an essay for Inside Higher Education. In it, he says one in eleven students in his college system benefited from Perkins in 2013-14. “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.”
As a nation, we recognize the growing importance of post-secondary education of everyone’s chances of career success. Programs to increase enrollment will ultimately be unsuccessful if financing options decrease. Debt for all students is on the rise. Perkins loans are one of the most reasonable forms of debt, with low interest rates that save borrowers money. Until plans for free college kick in, or even debt-free degrees for students who work, financial issues are one of the major worries for students who should be focused on getting a good education. Even as a fully revamped student loan program is hashed out, failing to reauthorize Federal Perkins Loans may have a detrimental impact on low-income students.