NEW YORK (MainStreet) — With a week to go before the Federal Perkins Loan program expires, two Congressmen, a Republican and a Democrat, are attempting to push through a bill that would preserve Perkins funding through next year.
Rep. Mike Bishop (R-Mich) and Mark Pocan (D-Wisc.) introduced the Higher Education Extension Act of 2015 last week, coinciding with increased efforts by higher ed advocates to prevent the Perkins Loan from ending on October 1.
Some Republicans, including Senate Health, Education, Labor and Pension committee chair Lamar Alexander (R-Tenn.) have criticized the program as they look to simplify an array of federal student loan options—which critics say is a veiled attempt to cut funding to higher ed. Justin Draeger, president of the National Association of Student Financial Aid Administrators, said the loans gives colleges “flexibility to fill the gaps of needy students.”
Perkins loan advocates won support from an unlikely place. Rep. John Kline (R-Minn.), chair of the House Education Committee, said last Thursday that he supports the one-year extension bill. “The current financial aid system is too confusing, complicated and can discourage students from pursuing a college degree,” he said in a statement. “But this is just one of many challenges facing today’s higher education system. This bill will ensure we continue to support students and institutions while we continue our larger effort to strengthen higher education.”
But congressional supporters must find another $500 million somewhere in the next federal budget. That's what the Congressional Budget Office says will be the cost of refunding the program.
One proposal that Democrats and Republicans on the House Education Committee last week are ready to go along with would pay for the program’s renewal by rolling back the grandfathering provisions on Perkins loans that would cut the time that borrowers are eligible to receive additional Perkins Loans.
Under the current law, students getting a Perkins loan for the 2015-16 school year remain eligible until September 30, 2020. Under the new bill, the loans would be cut off on March 31, 2018.
In addition to extending the Perkins loan, the new bill would re-authorize the National Advisory Committee on Institutional Quality and Integrity, which advises the Department of Education on accreditation issues and the Advisory Committee on Student Financial Assistance, which makes recommendations on issues regarding financial aid.
While Perkins is designed for low income students often at schools that aren't particularly well-heeled, federal records reveal that Perkins loans are made by some of the nation’s wealthiest universities. Some of the schools disbursing the largest amount of Perkins loans include New York University ($13.4 million), Stanford University ($12.3 million), the University of Pennsylvania ($10.9 million), the University of Michigan at Ann Arbor ($10.2 million), Cornell University ($9.4 million) and Harvard University ($9.4 million).