Thursday, March 3, 2005
The Bush Administration’s 2006 budget proposal recommended the elimination of Perkins loans for students in higher education.
Perkins loans were limited loans given by the federal government to low-income students, said Barbara Maigaard, director of Student Financial Aid.
Tanika Seawood, Kansas City, Kan., senior, said she would be in trouble if the proposal passed.
Perkins loans provided Seawood with $3,128 this year. She also received five grants and was part of the federal work-study program, totaling enough money to pay for all of her tuition, housing and book costs.
“It’s a tremendous help,” Seawood said. “I couldn’t afford school without it.”
The funds for Perkins Loans would be eliminated and redirected to other student aid programs that the Administration finds more effective, such as Pell Grants, according to the budget proposal for the Department of Education.
An assessment done by the Department of Education concluded that Perkins loans were ineffective because larger programs, such as the Federal Family Education Loan and Direct Loans, had greater availability to students.
“This program is duplicative and unnecessary given the broad availability of need-based, subsidized, relatively low interest loans available through the two larger student loan programs,” according to the budget proposal for the Department of Education.
Seawood will be the first child on both sides of her family to graduate from college.
She said the Bush Administration should take into consideration what it would take away from young adults if the loans were eliminated.
If students weren’t able to get the loans, it would probably cause more unemployment because more teenagers would not have the opportunity to go to college, Seawood said.
The University of Kansas was given $30,000 a year for the Perkins Loan Program, an amount determined by the federal government for each school.
This year, the University awarded about $3 million in Perkins loans to 892 students. When students pay back their loans, their money goes directly to the school they got the loans from and the money is reused, Maigaard said.
“We have not seen clear detection whether or not they are going to cancel the current money we receive annually or if they will make us give back all the money we have as a result of Perkins loans,” she said.
Students are consolidating their loans and paying them back together because interest rates are at an all-time low of 2.77 percent.
Maigaard said the impact on students would be determined after it was clear what the Bush Administration would do with the money from Perkins loans.
There were other viable options for students, but they did not have the same benefits of the Perkins loan, she said.
Benefits such as low, fixed interest rates, loan forgiveness under certain circumstances and the opportunity to postpone loan repayment make the Perkins loan a practical option for students.
“The Perkins loan program is a small program,” Maigaard said. “But to those students it is very important to their funding.”
If the budget proposal passes, Maigaard said the Office of Student Financial Aid would continue to provide information about other federal loan programs such as alternative loans and the parent loans.
Students must apply by the March 1 deadline each year to be eligible for a Perkins loan. They must also show their need for assistance by having an expected family contribution to attendance of less than $5,000. They may receive anywhere from $1,000 to $4,000 in Perkins loans each year.
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