The Perkins Loan has been helping students pay for college since its conception in 1958. As the Coalition of Higher Education Assistance Organization (COHEAO) puts it, it is “a program that has helped many Members of Congress pay for college.”
However, there is a problem for students who depend on this loan. The projected 2007 fiscal budget will end up eliminating the Perkins Loan because it does not allocate funds to schools in order to keep the program going. Funding across the nation has faced possible cuts because of the need for the United States to continue to fund the wars in Afghanistan and Iraq. The budget has not yet been voted on.
 In a quick review, the Perkins Loan is a federally funded loan that targets low income families and provides a low interest loan opportunity to help pay for college. It is assessed into a student’s financial aid package through the FASFA application. It is meant to “help fill the often wide gap between grant aid, Stafford Loans, and costs of tuition and expenses for students who have financial need,” explained Joan Coyle of the COHEAO.
“The Perkins Loan makes a difference for low income borrowers who do not receive enough funds to pay for college. These are low cost funds to the neediest borrowers,” explained Lori Slawson from Pacific’s Loan Program. At Pacific, 1,937 students have a Perkins Loan: 723 of those students are from Pacific’s McGeorge School of Law, and the other 1,214 students are from the Stockton undergraduate campus.
Coyle also put the issue into perspective: “This would cost America's institutions of higher education and their students at least $7 billion.” Furthermore, she emphasized the high number of borrowers the Perkins Loan assists.
“According to the Department of Education, in the 2003-2004 academic year, 630,000 students borrowed $1.46 billion in Perkins loans, with an average amount of $2,003 awarded per student,” she said.
The Perkins Loan has several appealing qualities to a student. For example, the interest rate for Perkins Loans is fixed at 5 percent. This is a considerably lower rate than the Stafford Loan which has a 6.8 percent interest rate. Furthermore, students can actually qualify to receive a loan cancellation for up to 100% of their Perkins Loans by working in fields like these. Slawson addressed this important issue as well.
“The loss [of the Perkins Loan] would be unfortunate for the students pursuing professions in occupational fields that are in high demand,” Slawson said. “Fields such as health care, elementary/high education, social services, and law enforcement. The students pursuing these occupations would lose out on an exceptional benefit the loan offers.” For more specific information on which careers can cancel loans, please see the COHEAO website at www.coheao.org.
This is not the first year the Perkins Loan has been threatened. In past years, Coyle and COHEAO have worked to maintain its existence.
Coyle explained, “COHEAO launched a major grassroots campaign that generated thousands of letters to Congress in support of the Perkins Loan Program. We worked with the Committee for Education Funding (CEF), the Student Aid Alliance (SAA) and other like-minded groups to further our goal of saving Perkins Loans. We also explained the threat to this important financial aid program to members of the media, and a number of articles and reports have been run.” They are trying to regenerate a similar approach this time.
Coyle directs students to “Contact your Representatives in the U.S. House and Senate and tell them to fund the Federal Capital Contribution at $100 million, fund the Loan Cancellation account at $120 million and reject any proposals that eliminate the Perkins Loan Program.”
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