Perkins Loan Program Extended for Two Years

On December 17, Congress passed legislation extending the Perkins Loan program through September 30, 2017. The program had previously expired on October 1, 2015.

The extension deal is based on legislation previously passed in the House of Representatives. Although the deal is far from perfect, it revives the Perkins Loan program for two years and allows Congress to revisit the program when it takes up reauthorization of the Higher Education Act.

In addition to the two-year extension, the legislation contains the following provisions:

• New graduate students will be ineligible to receive a Perkins Loan beginning in the 2016-17 academic year. However, graduate students currently receiving a Perkins Loan will be grandfathered and eligible to receive a Perkins Loan for 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. Undergraduate borrowers receiving a Perkins Loan for the first time, beginning in 2016-17, must exhaust both subsidized and unsubsidized Stafford Loan eligibility before receiving Perkins Loan eligibility.
    
• Restrictions have been placed on the Secretary to prevent the Department of Education from enacting future grandfathering provisions. Once this two year deal expires, the Perkins Loan program will terminate, absent further congressional action.

NAICU has signed on to a community letter authored by ACE that was sent to Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) of the Senate Health, Education, Labor, and Pensions Committee. While the letter offers thanks and appreciation to both senators for their bipartisan commitment to extending the Perkins Loan program, it is not an endorsement of the legislation.

As Congress moves to the reauthorization of the Higher Education Act, lawmakers will have the chance to revisit the Perkins Loan program. It is the hope of many in the higher education community that Congress will permanently extend the Perkins Loan program, and reverse the tightened eligibility standards contained within the current extension. In particular, NAICU would like to see graduate students reinstated for Perkins participation, and a recommitment to the flexibility traditionally provided to financial aid administrators in the program.

For more information, please contact:
Tim Powers