The Federal Perkins Student Loan Program, formerly the National Defense Student Loan Program, was first authorized by the National Education Act of 1958. The program offers low interest rates to students of higher education institutions through campus-based revolving funds. New funds are added to the revolving fund by federal capital contributions and matching contributions by institutions. Since that time, the total worth of the revolving fund has grown to over $8 billion dollars and nearly 630,000 students across the nation receive loans every year.

The loan specifically targets financially needy students, such that 71% percent of independent students receiving Perkins Loans have incomes below $20,000 dollars a year and 29% percent of families of dependent students have incomes below $30,000 dollars a year.

For the 2006 budget, the Bush Administration proposed to cut the Perkins Student Loan Program in order to compensate for shortfalls in other areas of the budget. This is a move which would effect over 4,500 students at the University of Washington, and 630,000 students nationwide. Since this proposal, Affordable Tuition Now has been actively working to save the Perkins Student Loan Program.

Who Gets Perkins Loans?
During the 2003-2004 school year, over 4,500 students at the University of Washington benefited from Perkins Student Loan Program, receiving approximately $15 million dollars in student loans. 70% percent of recipients were undergraduates, while 30% percent were graduate students.

How Can I get a Perkins Loan?
All undergraduate and graduate students at the University of Washington are eligible to receive a Perkins Student Loan, regardless of their credit rating. Students with financial are given priority, consequently, all applicants must fill out a Free Application for Federal Student Aid (FAFSA) in order to determine if they are eligible for a loan.

How is Perkins Different from Other Forms of Federal Financial Aid?
Unlike other federally subsidized students loans, such as the Pell Grant or Stafford Loan, the Perkins Student Loan is based at the institutional level, rather than the federal level. In other words, the loan is dulled out by a participating college or university, rather than the Federal Government.

The Perkins Student Loan Program also differs from the Stafford loan, in that it has an interest rate of 5% percent, which begins to accrue 9 months after the borrower ceases to be a student. The loan also encourages students to work in areas of high demand. Students who go into the following fields can have their loans cancelled: Teaching special education, math, science, foreign languages or in Head Start. law enforcement, VISTA, the Peace Corps, the armed forces, or as social work.

History
The Perkins Student Loan was originally created in 1958 with the passage of the National Defense Act. At the time it was called the “National Defense Student Loan.” In 1972 it was renamed the "National Direct Student Loan," fifteen years later in 1987 it was renamed to the Perkins Student Loan Program.

Since 1958 over $27 billion dollars in student loans have been made to students throughout the country, helping them to realize their goals of a college degree.

The program is funded through a revolving funds system. The initial contribution was made by the federal government in 1958; the fund’s low interest rates, defaults and other costs are offset by a yearly federal contribution which is matched by the participating institutions. Each institution manages its own program.

Proposed Removal of Perkins Loan Program
Under President Bush’s proposed 2006 budget, both the federal capital contribution and the federal portion of funds for the Perkins Loan Program, in order to compensate for the growing deficit. The removal of this program would severely impact over 4,500 students at the University of Washington and nearly 630,000 students nationwide, severely limiting their access to higher education.

How Can I Help Save the Perkins Loan Program?
Affordable Tuition Now is always looking for additional volunteers to help in supporting higher education. In regards to the Perkins Loan Program, we strongly encourage everyone to write a letter or make a phone call to their congressman in support of the loan, and to let their peers know what is going on. If anything, alerting the public to the possible removal of this program is the best thing you can do.

Additional questions regarding the Perkins Loan Program can be addressed to Corwin Hockema, Chairman of Affordable Tuition Now.

Links
Coalition of Higher Education Assistance Organizations Perkins Loan Site
Department of Education Perkins Loan Website
Congress Threatens UW’s Financial Aid
A Graduation Present From Bush
Perkins Loans May Be Cut


Read more about the Perkins Loan here.