March 6, 2007
Support the Federal Perkins Loan Program
Help ensure college access to low and moderate-income students across the country
Dear Colleague: Please join us in sending the attached letter to Chairman David Obey and Ranking Member James T. Walsh, of the Subcommittee on Labor, Health and Human Services and Education, urging them to fund the Perkins Loan Program, which has again been slated for elimination. The current proposal would recall the federal portion of the 2008 Perkins Loan collections from revolving funds administered by nearly 1,800 participating post-secondary institutions around the nation. At a better rate than the federal Stafford Loans, the Perkins Loan Program offers low-to-middle income students a 5 percent fixed interest rate, through campus-based revolving funds. Having served more than 10 million students nationwide, these loans help fill "need gaps" in student financial aid packages, enabling them to forego more expensive, private loans. Perkins Loans are available for undergraduate, graduate and professional studies and include important loan forgiveness provisions for fields that address specific areas of national need such as teaching, nursing, military, social work, law enforcement, childcare and public safety. Postsecondary institutions administer the program on their own campuses, thus saving considerable administrative cost for the government. Schools also match the government contribution with their own funds so that for every federal dollar invested in this program, state or institutional funds are leveraged to multiply the benefits of federal investment. For your convenience, a copy of the letter is attached and a state breakdown of Perkins Loan allocations. If you would like to sign this letter or if you have questions, please contact Kate Ryan in Congressman Tim Bishop's office at x53826 or at kate.ryan@mail.house.gov or contact Jaime Herrera in Representative McMorris Rodgers office at x52006 or jaime.herrera@mail.house.gov.
Sincerely,
_______________________ TIM BISHOP Member of Congress (D-NY)
_______________________ CATHY MCMORRIS RODGERS Member of Congress (R-WA)
Honorable David Obey Chairman Subcommittee on Labor, HHS, Education and Related Agencies Committee on Appropriations 2358 Rayburn HOB Washington, D. C. 20515
Honorable James T. Walsh Ranking Member Subcommittee on Labor, HHS, Education and Related Agencies Committee on Appropriations 1016 Longworth HOB Washington, D. C. 20515
Dear Chairman Obey and Ranking Member Walsh: The Perkins Loan Program, created by Congress in 1958, started as our country's first federally supported student loan program. It was developed to respond to fears that the United States was falling behind the technical capability of the Soviet Union after the launch of the Sputnik satellite. The program continues to be a vital part of our country's education system. We must preserve this program and ask for your support to return $100 million to Perkins Loan Capital Contributions and retain the Perkins Cancellations option. As you know, the Administration has again slated this program for elimination in the FY 2008 budget. We ask you to reject any proposal to zero out the Perkins Loan Program, or to let it dissipate through attrition. Perkins Loans have offered long-term, low-interest rates for over 10 million students nationwide. Aimed at specific need-based populations, Perkins Loans offer students a fixed 5 percent interest rate, as compared with Stafford loans which are currently set at 6.8 percent. Further, the Stafford Loan program has extremely tight loan limits, leaving "need gaps" in a student's financial aid package. Rather than lead students to borrow more expensive private loans to pay for college, Perkins is designed to fill in these need gaps with a low-cost alternative. At a time when the cost of education is increasing, we need to give students more options for access to higher education. The Perkins program also has important loan forgiveness options for graduates who choose to serve in fields that address specific areas of national need such as teaching, nursing, military, social work, law enforcement, childcare and public safety. The Continuing Resolution allocated $65.5 million to the Department of Education to reimburse the Perkins Loan Program for loans cancelled for graduates in public service jobs. This is an effective way to incentivize graduates to focus on national priorities. In addition, Perkins Loans are a highly efficient way to allocate federal support for student financial aid. That is because colleges and universities have to match at least 25 percent of the federal contribution and all the funds are recycled year after year in a campus revolving fund to help future generations of students. In the 109th Congress, the House-passed higher education bill would have reauthorized the Perkins Loan Program and though the bill did not make it to the final conference, authorizing committees have again voiced their legislative intent to authorize funds for this program.
Uniquely, Perkins truly does expand college access for relatively low cost. We support the continuation of the Perkins Loan Program, and we ask the Committee on Appropriations to restore its funding in the FY 2008 appropriations bills. Sincerely,