Washington – The nation’s oldest student loan program, which expired in September, has been temporarily revived by the Senate.
The Perkins loans program was available at most of Connecticut’s four-year colleges and has helped thousands of students in the state. It served more than half a million students nationwide last year.
But authorization for the program ended in September. Although the House voted to reauthorize the Perkins loans, the Senate failed to act, largely because Sen. Lamar Alexander, R-Tenn., the head of the Senate Health, Education, Labor and Pensions Committee, thought the program, inaugurated in 1958, was outdated and needed to be streamlined.
But after Alexander made some changes to the program, the Senate approved a two-year reauthorization in a voice vote late Wednesday.
One change is that new undergraduate applicants would qualify for Perkins loans only if they’ve exhausted all other borrowing options.
Alexander’s bill would authorize new Perkins loans for undergraduate students through the end of September 2017. Because it eliminates eligibility for graduate students, only graduate students who already have an existing Perkins loan can keep receiving them until September 2016.
“While I am pleased that the Senate acted today to extend this valuable program, I am disappointed that this reauthorization excludes aid to graduate students — a longstanding program that I will continue to fight for,” Sen. Richard Blumenthal, D-Conn., said Wednesday.
Sen. Chris Murphy, D-Conn., said “Republicans’ decision to let the program lapse, cutting off loans in the middle of the school year, betrayed students everywhere.”
Perkins loans have a 5 percent interest rate, but have no fees and offer a longer grace period for repayment than other federal loan programs. Unlike the government’s direct loan program, which requires payment six months after graduation, the first payment for the Perkins program isn’t due until nine months after graduation.
In the 2013-14 school year, 540,000 students received Perkins loans.
“We are glad to see that Perkins loans will be available for those who wish to use them, although at UConn, our primary focus is on helping students graduate with the least debt possible,” said University of Connecticut spokeswoman Stephanie Reitz.
While Congress may revive the Perkins loans, it has not provided funding for the program in about a dozen years.
With no new money of the program, Connecticut schools have been doing what other schools were doing – making loans from the money that was available from students who had repaid their Perkins loans.
At the University of Connecticut, there’s been a steep decline in the amount of money loaned through the Perkins loan program, from about $4 million in the 2005-2006 school year to about $1.5 million in the 2012-2013 school year.
The average student debt at UConn is $24,999, about $4,000 less than the national average.