Perkins loan discontinued

Students in the class of 2020 might find college harder to pay for than their predecessors. At midnight on Thursday, the Federal Perkins Loan Program expired when a bipartisan group of U.S. senators chose not to pursue its renewal.

The federal government has offered Perkins loans since 1958. In recent years, around 1,500 institutions of higher education and over half a million students have participated in the program.

Legislators allowed Perkins to expire in favor of simplified programs they hope to put in place in the future. The program’s expiration does not affect students who have already accepted a Perkins loan, but permanently closes the program to any new students.

At UNC, Perkins loans are a comparatively small but important part of the financial aid package.

“Constraints in the federal government’s direct loan programs require us to supplement financial aid with other funds,” said Phil Asbury, deputy director of UNC’s financial aid office. “That’s where Perkins comes in.”

Asbury said more than 2,100 students at UNC currently have Perkins loans in their financial aid packages.

“The average amount students borrow is about $2,500,” he said. “The maximum set by the federal government is $5,500, but we never have to go that high because of our grant resources.”

Stephen Farmer, UNC’s vice provost for enrollment and undergraduate admissions, said Perkins loans have been crucial to UNC’s financial aid program, and the university is actively developing alternatives to Perkins to continue meeting full need.

“The main alternative we’ve been talking about is an institutional loan program that, in effect, would replace Perkins loans with comparable ones administered by the university,” he said. “Some other colleges and universities already have these, and the elimination of Perkins will probably prompt us to develop one.”

Binta Ka is a UNC sophomore who currently has a $4,500 Perkins loan as part of her financial aid package.

“If it wasn’t for that loan, my financial burden would be a lot more significant,” she said.

Supporters of the Perkins program cited several reasons for keeping it, including a unique loan cancellation provision for those who went into service-based industries, like teaching or nursing.

“It also allowed institutions to decide how to spend the money,” Asbury said. “This doesn’t exist in other federal loan programs, and it’s part of how we’re able to keep packages consistent for students across several years.”

Farmer said since Perkins is a smaller part of federal student aid, he can see why people looked to it to start simplifying loan programs.

“The practical effect of this, however, is that they haven’t put anything in its place,” he said. “It’s one thing to simplify and maintain resources at the same level. It’s another to simplify and just take those resources away.”

Ka said the Senate should not have allowed the program to expire without a new program ready.

“If they’re going to stop something that is so necessary for so many students on an annual basis, they should have a backup plan in place,” she said.

“It makes no sense to pull the rug out from under all of these students.”

state@dailytarheel.com