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College students, families to feel loss of Perkins Loans

By Courtne Dixon/Howard University News Service
On November 22, 2015

College students throughout the nation have been stripped of more than a billion dollars in aid after the Senate refused to renew the nation’s oldest loan program.

The 57-year-old Federal Perkins Loan Program expired at the end of September after the Republican-controlled Senate, led by Sen. Lamar Alexander (R-Tenn.), blocked legislation to extend it, even after the legislation passed the House of Representatives. 

Under the program, students with exceptional financial need can borrow up to $5,000 at a 5 percent fixed rate. It serves close to 1,700 schools and awarded over $1.15 billion in aid to over 539,000 students in the 2013-14 academic year, according to the U.S. Department of Education.

Brian Johnson, associate director of financial aid at Howard University, said the loans have been a boost to needy students and the absence of the funding could create a huge strain on the university and its students.

“It’s been great, because it has assisted students who had difficulty meeting the financial obligations with the university,” said Johnson. “Now, students who usually received those funds will have to seek funding from other sources. Hopefully we will be able to assist students with other resources, but again, that will be challenging for those students who were recipients in the past.”

On average, District of Columbia students borrow more than other states or providences that participate in the program. Their borrowing averages $3,351, compared to the national average of $2,172 per student. Just last year, approximately 5,000 college students in D.C. received over $16 million in aid.

Students at the Catholic University of America will feel a strain from the loss of the Perkin loans as well. The institution’s students received $1.2 million in aid last year and were awarded $2,000 a semester on average, according to Jo Ann Humphreys, assistant director of financial aid at Catholic University.

“We are trying to deal with it as best as possible,” said Humphreys. “We tried to provide deadlines to encourage them to get their promissory note done in time.”

Nearly all Washington schools will be affected to some degree, according to Department of Education statistics. 

At George Washington University, 2,237 students received more than $4 million in loans for the 2013-2014 year, and at Georgetown, more than 1,200 students received almost $8.5 million.

Historically, HBCUs will also take a hit. Hampton University will lose about $1 million, nearly 500 students at Tuskegee University will lose $1.7 million and 15 percent of the students at Clark Atlanta University will go without $1.3 million.

Starting Oct. 1, some candidates may still receive the loan on a limited basis, said Miriam Niblack, assistant director of Georgetown University Student Loan Services.

“Students who accepted the loan prior to Sept. 30, 2015, are able to be grandfathered into the program and still receive funds on a limited basis upon meeting certain criteria,” said Niblack.

“Those who have the loan can continue to use the benefits of the program until it is exhausted or the loan is repaid. After any final disbursements, without the program being re-instituted, the loan will no longer be available.”

For those who are not grandfathered in and future incoming students, the forecast seems much bleaker.

“The biggest burden will be for those students who had that shortcoming, because they won’t have access to those resources anymore,” said Johnson.

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