Congresswoman Elise Stefanik, seen here visiting Fort Drum Exchange, introduced the Federal Perkins Loan Extension Act of 2017.
The Federal Perkins Loan Extension Act of 2017, which would extend the Federal Perkins Loan Program for two years, picked up its 52nd cosponsor last week on June 15.
The Perkins loan program is set to expire at the end of September 2017 unless legislative action extends the program. If the legislative piece was to expire, approximately 500,000 students would be left without access to financial aid. Program renewals are a recurring annual or biannual tradition in Congress, and the Perkins loan program is no exception.
“Perkins Loans are an important resource for low income families in our district who are pursuing their higher education dreams,” Rep. Elise Stefanik (R-NY), the bill’s original sponsor, said, “I am pleased that this legislation continues to gain momentum, and I will continue to work with my colleagues to ensure this legislation gets brought up for a vote.”
Many borrowers who utilize the Perkins loan program come from lower income families and are often the first in their family to attend college. These student borrowers rely heavily on the availability of the program as well as the guaranteed, fixed interest rate of 5 percent.
Roughly 67 percent of Perkins borrowers are dependent students, while an additional 34 percent come from families with household incomes below $30,000. Additionally, 20 percent of Perkins borrowers are independent students while 70 percent have a personal income of less than $20,000.
Perkins Loans are handled directly by the colleges and universities who originate the loans, help their students through repayment, and choose contractors for servicing and collection. Furthermore, the Perkins Loan Program is a risk-sharing program as the colleges and universities contribute one-third of their students’ awards by the end of repayment. Higher education institutions are supposed to administer a program that best fits the borrower’s and school’s situations.
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