Congress is poised this week to reinstate the Federal Perkins Loan Program, which expired on Oct. 1. The Senate today approved a bill renewing the program for two years, although with restrictions that will raise costs for many borrowers. The House is expected to follow suit on Thursday.
The Senate legislation was offered as an amendment to H.R. 3594, a one-year extension bill passed by the House in September. It authorizes new Perkins Loans for undergraduates until October 2017, but it also requires new borrowers to exhaust their subsidized and unsubsidized Stafford loan eligibility before being allowed to access Perkins Loans. Because unsubsidized Stafford loans have less generous terms than Perkins loans, that means those students will be forced to borrow at a higher cost than they would under the expired program.
This provision also establishes a troubling precedent by which the federal government would dictate to financial aid offices how to best meet the needs of their students. In addition, while current graduate students would have one more year in the program, the bill would exclude any graduate students not already in the program from receiving Perkins loans, forcing them to borrow through much costlier options.
For those reasons, ACE and seven other higher education associations sent a letter Tuesday to Sen. Lamar Alexander (R-TN), chair of the Senate Committee on Health, Education, Labor and Pensions, and Ranking Member Patty Murray, (D-WA), noting a preference for the House bill. But the letter also noted appreciation for the work in the Senate to ensure the continuation of Perkins Loans, which help 500,000 students finance their educations.
“While we would prefer the House bill, the Senate measure would importantly continue the Perkins program,” stated the ACE letter. “As opportunities arise, including in the reauthorization of the Higher Education Act, we will strongly advocate that Congress address the provisions of concern in the Senate legislation.”
As part of the efforts for legislation to revive the program as it operated before expiring, ACE sent a letter to congressional leaders Nov. 20 on behalf of 53 higher education organizations and 535 colleges and universities backing a one-year extension of the program.