Left for dead when authorizing legislation expired on October 1, 2015, the campus-based Perkins Loan Program was revived on December 17 when Congress passed new legislation extending Perkins through September 30, 2017.
About 1,700 higher education institutions participate in the federal Perkins Loan program. Only students with exceptional need may receive a Perkins loan. Funding for new loans comes in part from federal budgetary appropriations, collection of existing loans, and funds from the participating schools. Perkins loans are eligible for various deferments for things such as unemployment or illness – but these policies vary by school. Repayment schedules are set up to ensure the loan is paid off within 10 years, and payments can be required monthly, bi-monthly or quarterly depending on the school. One of the reasons these loans are so important to needy students is the generous and varied forgiveness programs that are unique to the Perkins program.
While the two-year extension will allow student aid advocates and lawmakers a chance to revisit the Perkins Loan program during the reauthorization of the Higher Education Act, the current extension was gained only after tighter eligibility standards were included. For example:
- New graduate students will be ineligible to receive loans beginning in the 2016-17 academic year, although graduate students currently receiving a Perkins loan will have one additional academic year through September 30, 2016.
- Undergraduate borrowers currently receiving Perkins Loans must exhaust their subsidized Stafford Loan maximum award before becoming eligible to receive a Perkins Loan. Beginning in 2016-17, undergraduate borrowers receiving a Perkins Loan for the first time must exhaust both subsidized and unsubsidized Stafford Loan eligibility before receiving Perkins Loan eligibility.
Campus-based Aid Programs (Federal Work Study, SEOG, and Perkins Loans) will be one of NAICU’s policy priorities for the HEA Reauthorization. Each of these programs requires colleges to match federal student aid funds with billions of dollars in institutional resources, i.e. “skin in the student aid game,” and are important to attract and retain low income students.