Minnesota Senators Join Colleagues in Pressing Senate Leadership to Take Up and Pass Bill to Revive Perkins Loan Program; Critical Lifeline for Low-Income Students Expired at Beginning of Month
WASHINGTON, DC—Today, U.S. Sens. Amy Klobuchar (D-Minn.) and Al Franken (D-Minn.) continued the fight to save a crucial student loan program that helps 10,000 Minnesotans afford the cost of college each year.
In a bipartisan letter sent Thursday, Sens. Klobuchar and Franken called on Senate leadership to take up and pass legislation to renew the Perkins Loan program, which expired at the beginning of October. This critical lifeline is an important resource for low-income students to pay for college, and it can provides support for students who have already reached their limit on other federal loans and still need help paying for things like textbooks and materials.
“Rising costs for education are putting a strain on Minnesota students and their families and making college seem out of reach for too many of our young people,” said Sen. Klobuchar. “Perkins loans have been critical to helping many Minnesotans afford college and we must swiftly reauthorize the program to help ensure college costs don’t block the pathway to opportunity.”
“For students and families in Minnesota and around the country, college is getting more and more unaffordable, and students are taking on more and more debt,” said Sen. Franken, a member of the Senate Education Committee. “In Minnesota alone, over 10,000 students receive Perkins loans for an average of $2000 a year each. We can’t let that crucial support slip away for good. I’m disappointed that the Senate wasn’t able to extend this important program before it expired, and we need to keep fighting to renew it.”
The Perkins Loan Program, the nation’s oldest federal student loan program, has existed with broad bipartisan support since 1958 and has provided more than $28 billion in loans through almost 26 million awards to students in all 50 states. A one-year extension to the program passed overwhelmingly in the House of Representatives earlier this month, but failed last week in the Senate.
Klobuchar is a leader in efforts to expand higher education opportunities and make college more affordable for all students. Earlier this week, Klobuchar, in her position as chair of the Steering and Outreach Committee, held a forum with college graduates and experts about improving college affordability and tackling the student debt crisis. She has been a strong supporter of TRiO programs that continue to provide fundamental support to low-income and first-generation students across Minnesota as they prepare to attend college. She is a cosponsor of the Bank on Students Emergency Loan Financing Act, which allows all eligible Federal Family Education Loan (FFEL) Program and Direct student loan borrowers the opportunity to refinance their high-interest loans. As chair of the Joint Economic Committee in 2013, she released a Student Loan Debt Report that showed student debt was the only type of consumer debt that continued to rise throughout the recent recession and subsequent recovery. She cosponsored the Keep Student Loans Affordable Act and the Student Loan Affordability Act to maintain for at least another year the federal student loan interest rate of 3.4 percent, and worked to prevent the rate from immediately doubling. Klobuchar also helped pass the College Cost Reduction Act, which went into effect on July 1, 2009, and created two important loan repayment programs.
Since becoming Senator, Sen. Franken has been working hard to make the cost of college more affordable. He’s led college affordability roundtables all across Minnesota, and has written several piece of legislation to help students and families pay for college—like the bill he introduced to let student loan borrowers refinance their loans at lower rates. Earlier this month, Sen. Franken reintroduced two bipartisan college affordability bills that would give students and families better information about the costs of college. You can read about them here and here. He also introduced his measure to help college students manage costs by expanding access to free online textbooks.
Below you can read the full text of the letter, which was led by Sen. Tammy Baldwin (D-Wis.).
Dear Leader McConnell and Leader Reid,
On October 1, the authorization of the Perkins Loan Program, the nation’s oldest federal student loan program and a critical lifeline for many low-income students, expired. While our colleagues in the House of Representatives unanimously approved a one-year, no-cost extension of the program through the Higher Education Extension Act (H.R. 3594), the Senate has yet to advance that measure. As a result, thousands of current and future students face uncertainty and hundreds of institutions are struggling to find another way to help their neediest students afford their education. We write to express our strong support for the Perkins Loan Program and to request that the Senate take up and pass the Higher Education Extension Act as soon as possible.
The Perkins Loan Program has existed with broad bipartisan support since 1958 and has provided more than $28 billion in loans through almost 26 million awards to students in all 50 states. In the last academic year alone, the program lent $1.1 billion to more than half a million students with financial need across more than 1,500 institutions of higher education.
The Perkins Loan Program disburses financial aid to students through a campus-based revolving fund that leverages federal dollars with significant institutional investment. Colleges and universities have continued to participate in this self-sustaining program despite a lapse in federal appropriations for nearly a decade. The required institutional capital contribution gives colleges and universities “skin in the game,” and the loan payments from graduates are used to make new loans to other students. As a campus-based program, Perkins also enables these institutions to provide targeted support to the students they know have the greatest financial need. That is why it is broadly supported by higher education groups, including the Association of American Universities, the National Association of Independent Colleges and Universities, the American Association of Jesuit Colleges and Universities, the National Association of Financial Aid Administrators, the Coalition of Higher Education Assistance Organizations, the American Council on Education and many others, as well as dozens of individual colleges and universities across the country.
There are many students who will be disadvantaged by the Senate’s inaction and the program’s expiration. For example, students who have previously received Perkins loans will lose their eligibility if they change institutions or academic programs. In addition, if the program is not reauthorized soon, students seeking Perkins loans for the upcoming winter and spring semesters in 2016 may be ineligible. All future students will be ineligible for this vital program, which helps fill the gaps between what is available through the Direct Loan Program and a family’s ability to pay. On average, this is $2,000 in financial aid. As many as 150,000 current freshmen will lose access to these loans in the next academic year.
Many Senators have proposals aimed at making our various federal student aid programs work better for students, parents, and institutions. We look forward to discussing and debating ways to improve these important federal supports for higher education during this congress. In the meantime, we should immediately take up and pass the House-passed extension to provide certainty to students and ensure that this important source of student financial assistance is not interrupted.
Immediately taking up the House-passed extension bill is a simple solution that can provide clarity in the near term to students and the colleges and universities that serve them without any cost to the federal government. The Congressional Budget Office concluded that this one-year extension would incur no new costs to the federal government because it includes limitations on the length of student participation in the program. The House has already acted unanimously to extend the Perkins Loan Program for one year. We urge you to take up and pass the Higher Education Extension Act without delay.
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