An Update on the Omnibus Appropriations Bill and the Future for Perkins

Dear COHEAO Members,

The Omnibus Appropriations bill was finally made public late last night, and the news for Perkins Loans is bad: despite all the efforts and all the work by program supporters, a re-instatement of the Perkins Loan Program is not included in the legislation.  In talking to Congressional staff working on the bill over the past few days we had heard it was in then out then in then out, the final word we heard yesterday.   The House is voting on the legislation now with the Senate expected to follow tomorrow or soon thereafter.   Here is information on what this means for us.

Perkins had to compete with many other priorities this year in an extremely contentious Congress with numerous huge issues in play.  Advocates for Perkins in the House and Senate did their best, but in the end it has so far not been enough, unlike two years ago.  It has proven impossible to overcome the strong opposition of Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tennessee), who is also a senior member of the Appropriations Committee, and of Representative Virginia Foxx (R-North Carolina), the chairwoman of the House Education and the Workforce Committee. 

We also only had lukewarm support for adding an extension to the appropriations measure from Senator Patty Murray (D-Washington), the top Democrat on the HELP Committee and an Appropriations Committee member.  Murray had other, higher priorities as well, including increasing Pell Grants, Work Study, SEOG and providing funds for some people who expected to be eligible for public service loan forgiveness due to technical errors on their part or their servicer.    

This is an extremely disappointing outcome, but I am enormously proud of the efforts COHEAO put into this fight, often practically alone, but with a rally of support from allies in other higher education associations, notably NACUBO, over the past couple of weeks.   Due to COHEAO’s advocacy month after month, we had tremendous, energetic allies in Congress in both parties, led by the lead sponsors of legislation extending Perkins: Reps. Mark Pocan (D-Wisconsin), Elise Stefanik (R-New York), John Duncan (R-Tennessee) and Louise Slaughter (D-New York) in the House and Senators Rob Portman (R-Ohio), Tammy Baldwin (D-Wisconsin), Susan Collins (R-Maine) and Bob Casey (D-Pennsylvania), among others.  The extension bills have 23 sponsors and cosponsors in the Senate and 244 in the House, a majority of House members.  The bills are certainly not dead, but I believe our best chance for getting an extension through was by having it attached to the Omnibus Appropriations bill. 

Frankly, we have had some bad luck over the past year, starting with the politically divisive focus by Congress on health care, then on tax cuts (which threatened to have major impacts on campus finances), then on immigration issues, and finally capped off with the tragic death of one of our true House champions just last week, Congresswoman Slaughter, who had taken the lead in circulating the recent letter of support signed by an amazing 99 House members.   

We also all along faced what turned out to be the insurmountable obstacle of the Congressional Budget Office’s calculation that an extension of Perkins will cost the government $1 billion for two years, which means money has to be taken from other programs in order to fund the extension.  This ridiculous “cost” is a function of a broken budget process in Congress that we have been battling for years, but in the end proved too formidable.  For example, it was a reason Senator Murray failed to push for including the extension in the appropriations bill.

It is important to remember that although the traditional Perkins Loan Program remains closed for new loan originations, billions of dollars of outstanding Perkins Loans remain, including billions in institutions’ dollars.  Closing a Perkins Loan program means the loss of those institutional funds, while keeping the program operating results in the institutional share of collections being available for other purposes. 

Finally, there is still much for COHEAO to do, including for example:

• COHEAO has proposed a new Perkins Loan Program that would potentially be larger and include more institutions while ending the problem with the cost scoring.  This idea was proposed for consideration in the Higher Education Act reauthorization process.
• COHEAO is seeking authorization for campuses to be paid an Administrative Cost Allowance that they could retain from collections.
• COHEAO is creating a new institutional loan task force to help institutions with the creation and/or operation of institutional loan programs to partially replace lost Perkins loans. 
• COHEAO will continue providing training and being a forum for consideration of campus accounts receivable issues as THE national association with that mission.

Although this is a disappointing moment, we still have much to do.  We should proceed with heads held high that we have fought for students who need Perkins loans and won many victories over the years thanks to a unique, organic energy that this organization has with an unbelievably dedicated Board of Directors and an active, supportive membership.

Please feel free to reach out to us in the COHEAO office if you have any questions or comments.