U.S. Senators Debbie Stabenow and Gary Peters joined a bipartisan group of Senators in sending a letter urging Senate Majority Leader Mitch McConnell and Minority Leader Harry Reid to take up and pass a one-year, no-cost extension of the Perkins Loan Program, which expired on October 1st. The Perkins Loan Program provides low-interest loans to help students with exceptional financial need pay for their education. The U.S. House of Representatives passed a one-year extension on September 28th, but the Senate has yet to take action to extend the program.
‘On October 1, the authorization of the Perkins Loan Program, the nation’s oldest federal student loan program and a critical lifeline for many low-income students, expired… As a result, thousands of current and future students face uncertainty and hundreds of institutions are struggling to find another way to help their neediest students afford their education,’ the senators wrote in the letter. ‘Immediately taking up the House-passed extension bill is a simple solution that can provide clarity in the near term to students and the colleges and universities that serve them without any cost to the federal government.’
Since 1958, the Perkins Loan Program has provided more than $28 billion low-interest loans through nearly 26 million awards to students with financial need across the country. The program disburses financial aid to students through campus-based revolving funds that use federal dollars to leverage investments from colleges and universities to sustain the loan fund. In Michigan during the 2013-2014 school year, more than 26,000 students received nearly $41 million in Perkins Loans.
If the Perkins Loan Program is not extended, current students seeking loans for the upcoming winter and spring semesters may lose access to much-needed financial assistance, including up to 150,000 current freshmen in the next academic year. Additionally, future incoming students will be unable to use the program to finance their education, and students with existing Perkins loans will lose their eligibility if they change academic programs or schools.
The full text of the letter is available below
Dear Leader McConnell and Leader Reid:
On October 1, the authorization of the Perkins Loan Program, the nation’s oldest federal student loan program and a critical lifeline for many low-income students, expired. While our colleagues in the House of Representatives unanimously approved a one-year, no-cost extension of the program through the Higher Education Extension Act (H.R. 3594), the Senate has yet to advance that measure. As a result, thousands of current and future students face uncertainty and hundreds of institutions are struggling to find another way to help their neediest students afford their education. We write to express our strong support for the Perkins Loan Program and to request that the Senate take up and pass the Higher Education Extension Act as soon as possible. The Perkins Loan Program has existed with broad bipartisan support since 1958 and has provided more than $28 billion in loans through almost 26 million awards to students in all 50 states. In the last academic year alone, the program lent $1.1 billion to more than half a million students with financial need across more than 1,500 institutions of higher education. The Perkins Loan Program disburses financial aid to students through a campus-based revolving fund that leverages federal dollars with significant institutional investment. Colleges and universities have continued to participate in this self-sustaining program despite a lapse in federal appropriations for nearly a decade. The required institutional capital contribution gives colleges and universities ‘skin in the game,’ and the loan payments from graduates are used to make new loans to other students. As a campus-based program, Perkins also enables these institutions to provide targeted support to the students they know have the greatest financial need. That is why it is broadly supported by higher education groups, including the Association of American Universities, the National Association of Independent Colleges and Universities, the American Association of Jesuit Colleges and Universities, the National Association of Financial Aid Administrators, the Coalition of Higher Education Assistance Organizations, the American Council on Education and many others, as well as dozens of individual colleges and universities across the country. There are many students who will be disadvantaged by the Senate’s inaction and the program’s expiration. For example, students who have previously received Perkins loans will lose their eligibility if they change institutions or academic programs. In addition, if the program is not reauthorized soon, students seeking Perkins loans for the upcoming winter and spring semesters in 2016 may be ineligible. All future students will be ineligible for this vital program, which helps fill the gaps between what is available through the Direct Loan Program and a family’s ability to pay. On average, this is $2,000 in financial aid. As many as 150,000 current freshmen will lose access to these loans in the next academic year. Many Senators have proposals aimed at making our various federal student aid programs work better for students, parents, and institutions. We look forward to discussing and debating ways to improve these important federal supports for higher education during this congress. In the meantime, we should immediately take up and pass the House-passed extension to provide certainty to students and ensure that this important source of student financial assistance is not interrupted. Immediately taking up the House-passed extension bill is a simple solution that can provide clarity in the near term to students and the colleges and universities that serve them without any cost to the federal government. The Congressional Budget Office concluded that this one-year extension would incur no new costs to the federal government because it includes limitations on the length of student participation in the program. The House has already acted unanimously to extend the Perkins Loan Program for one year. We urge you to take up and pass the Higher Education Extension Act without delay.
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