September 30 Will Come and Go Without a Perkins Extension, But the Fight Is Far From Over A

September 29, 2017

Written by  Wes Huffman (whuffman@wpllc.net)

The Perkins Loan Program is set to expire tomorrow. However, the program has expired in the past, only to be revived at a later date.  In 2015, the Perkins Loan Program expired on September 30, only to be revived in December of the same year.  COHEAO and others Perkins supporters are pushing extremely hard for a similar outcome (though hopefully a bit sooner this time around).  We will be hosting state calls for COHEAO members and other advocates to discuss the importance of Perkins with legislators and their staff (see below for additional details). 

There has been an extraordinary effort to extend the program, with 229 Representatives and 18 Senators indicating their support by sponsoring or cosponsoring bills to extend the program.  To secure such support for Perkins Loans a remarkable accomplishment in its own right.  Unfortunately, two key players are currently opposed to the extension—Senate HELP Committee Chairman Lamar Alexander (R-TN) and House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC).

Alexander has long been opposed to the program, as he lead a charge to eliminate it in 2015.  Yesterday, Sen. Tammy Baldwin (D-WI) for unanimous consent to formally consider S. 1808, the Senate extension bill she introduced. As expected, Alexander objected.  To explain himself, he also made some statements about Perkins Loans that can only be (charitably) described as questionable.  For instance, Alexander claimed Perkins Loan borrowers would simply be able to turn to Stafford Loans and would not have any unmet need. He did not mention the statutory limits on Stafford Loans, which can be as low as $5,500.

Foxx, who was not the leading the Committee in 2015, is also calling for a shift to a one grant/one loan aid apparatus and argues eliminating Perkins is a step in that direction.  However, Foxx has also said she will follow the wishes of her fellow Republicans on this matter.  Therefore, there is a renewed effort to show support among Republicans in the House to help her see the importance of this program, particularly since Congress is nowhere near ready to consider the reauthorization of the Higher Education Act.   

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.  Since COHEAO began fighting to save Perkins years ago, there has been a dramatic increase in support in Congress for the program. Here is what you can do right now to help us ensure this wonderful loan program can continue to provide much needed aid for students:

• Encourage high-level university officials and administrators to contact their Senators and Representatives and encourage them to become cosponsors of the Perkins Loan Extension Act. You can review the list of Cosponsors in the House here and in the Senate here.
• Sign up here to join other Perkins advocates in securing Congressional support for the Perkins Loan Extension Act by participating in group calls to your Members of Congress.
• Add your Institution or Organization to the list of supporters for the Perkins Loan Extension Act.
• Add testimonials from Perkins Loan Administrators, Recipients & Parents.
• Sign and circulate the Save Perkins Now Petition.

Additional information on H.R. 2482 and S 1808 is available on the COHEAO website.

On an operational level, here is what happens as far as changes for the Perkins Loan Program: Nothing aside from the fact that new loans can no longer be originated after September 30.

Loans for this year must be first disbursed by September 30 and those borrowers can receive subsequent disbursements until June 30, 2018.  In terms of servicing and collections, there are no changes.  Perkins can and should continue to be serviced and collected at the campus level.  In fact, until the Department issues guidance on how it will proceed with collecting the federal share of funds, schools who liquidate their program and assign their loans to ED will continue to be penalized. Without a plan for returning the federal share, which officials indicate is not to be expected for some time, schools will lose out on their institutional capital contribution (ICC) for assigning loans to the Department, as well as any hope of obtaining the institutional share of unpaid loan cancellations.

In Congress, H.R. 2482 and S. 1808 remain very much alive.  We aren’t counting on Alexander and Foxx changing their minds at this point, but 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 “#SavePerkinsNow.”

If you have any questions, please do not hesitate to contact Wes Huffman (whuffman@wpllc.net) of COHEAO. It’s not time to give up, it’s time to keep on!