No, The Perkins Loan Program is Not Instantly Dead: An Update on What Happened, What Happens, and What Might
A note from: Harrison Wadsworth (hwadsworth@wpllc.net) and Wes Huffman (whuffman@wpllc.net)
October 1, 2015
Congress in recent weeks has at last awakened to the fact that the valuable Perkins Loan Program needs to be reauthorized. Unfortunately, one senator was able to use Senate rules to singlehandedly put Perkins on hold — for now.
Since COHEAO began fighting to save Perkins years ago, there has been a dramatic increase in support in Congress for the program. That support means the fight is far from over, only that we are returning to the long-term debate over the future of all the student aid programs in a much stronger position than we were in six months ago.
As we reported, the House passed without opposition a bill, H.R. 3594, on Monday that would extend the authorization for the Perkins loan program by one year and delay the start of the program’s “sunset” — already 12 years late — by a year as well. After the bill passed it was transmitted to the Senate for consideration, where it was referred to the Health, Education, Labor and Pensions (HELP) Committee, as is routinely done when the House passes an education-related measure.
But because the law is now being interpreted by the Department of Education to say no more Perkins Loans can be made starting today, a bi-partisan coalition of senators began advocating for immediate passage of the House bill, without the normal committee review. A bipartisan group of 12 senators spoke strongly in favor of Perkins on the floor of the Senate on Tuesday and Wednesday, a highly unusual occurrence for a small student aid program and a show of support for Perkins that has not occurred in decades. The compilation of their statements is attached to this memorandum.
Late on Wednesday afternoon, one senator asked for unanimous consent to formally consider the House bill. Such an extraordinary approach under Senate rules — bypassing the committee and the normal process for bringing up bills — can only be done if all 100 senators agree. Despite the strong, bi-partisan support for the measure, Senator Lamar Alexander (R-Tennessee) objected, blocking a vote on the House bill. Alexander is the chairman of the HELP Committee, where the bill was referred, and he apparently did not want this bill to pass outside of the ongoing process of reauthorizing the Higher Education Act. He said as much in his speech explaining his objection. To explain himself, he also made some statements about Perkins loans that surprised observers who have usually viewed him as a thoughtful legislator. In this case he used a careful selection of some facts while leaving out others that when viewed together would make the opposite point.
As Perkins supporters it is important to remember that though this is a set-back it is by no means the end of the line. Presumably the Department of Education will issue more guidance to schools, but for now this is what happens: Nothing.
The Department’s decision to start acting on the sunset section of the Higher Education Act doesn’t mean instantaneously that the Perkins program is dead. The law actually says that the Department should have started collecting the federal share of Perkins Loan revolving funds in 2003 and that the collections should have been completed by 2012. Obviously that did not happen. In 2011, the Department decided that it needed to determine how to deal with the recall issue, which was made more complicated by Congress’ decision in 2008 to authorize the program through 2014 (with an automatic extension to now.) The Department decided it should wait to do anything until now.
The immediate impact of the Senate inaction is that no new Perkins loans can be originated. Current borrowers who have had their first disbursements made can receive second disbursements. Continuing students who received their first Perkins loan before July 1, 2015, can get four more years of loans – unless they change majors or transfer schools. Sadly, and this is a point Alexander ignored, 80 percent of students change majors during their college career, so this “grandfather clause” won’t help many students.
In Congress, H.R. 3594 remains alive. It has progressed a lot farther than most of the 3,593 bills introduced before it in the House. The Senate could decide today or tomorrow or next week to pass it under unanimous consent. That would mean Alexander changes his mind, something Senator Tammy Baldwin (D-Wisconsin), who asked for the bill to be passed yesterday, mentioned after Alexander objected. We aren’t counting on Alexander changing his mind now, but it’s possible and we have many allies in this effort. COHEAO and others in the higher education community along with students and others in Congress will keep up the fight to Save Perkins Now.
In addition, we’ve been working hard on ideas for the long term future of the program, which we all know faces other hurdles. Alexander said yesterday that he expects to complete work on the HEA reauthorization bill this year, and that he will consider what to do with all the student loan programs as part of that process.
COHEAO will continue working on Perkins with Chairman Alexander and others in the Senate and House, including discussing the changes embodied in the Campus Flex idea that was presented to Congress in 2013 and that has been discussed many times since then. We will build upon the broad bipartisan, bicameral support for the principles of this valuable program that has been refreshingly apparent during the Perkins extension discussion.
The fate of the Perkins Loan Program was not decided yesterday. It will be decided by Congress as part of its reauthorization of the Higher Education Act. We expect this to be completed before students arrive on campus for the next academic year. To all Perkins supporters, we need to keep working for the continuation and improvement of the program.
It’s not time to give up, it’s time to keep on!
