The Federal Perkins Loan Program — a campus-based federal loan program administered by many universities, including Truman State University — has expired, and Congress has not renewed it.
While renewal is still possible, the funds will be unavailable to students after the current school year if the program is not renewed. Four hundred to Truman students receive Perkins Loans, totalling up to $800,000 yearly. This money is meant for low-income students in addition to federal direct loans and Pell Grants.
Financial aid director Kathy Elsea said Perkins Loans are federal loans, but they are separate from federal direct loans. The University administers the loans and they are taken out of a revolving fund, which means the money paid back is distributed to other students. Elsea said the fund is self-sustaining and does not cost the federal government anything beyond the initial seed money given to the University when the fund was established.
Elsea said the program was established such that it would expire if it was not renewed by Congress. No renewal action was taken by the Sept. 30 deadline. However, Elsea said this is not the first time the program has expired. In 2015, the program expired, but was reinstated for a two-year extension in December of that year, with additional restrictions. The loans are no longer available to graduate students, and students may not change majors while receiving the loans.
“It didn’t look good last time, but we got it back,” Elsea said. “It’s that same thing. It doesn’t look good, but it’s possible.”
Elsea said 428 Truman students have received Perkins Loans for this semester. She said there is no interest on the loan while the student is in school and for a nine-month period following graduation. After the grace period ends, interest is 5 percent.
Elsea said while there is support for the program from both parties in Congress, some politicians favor a transition to a single loan program as opposed to the multiple loans the federal government currently has available.