President proposes to end Perkins Loan

Ryan Loew

In an effort to bolster a fluctuating Federal Pell Grant program, President Bush’s $2.5 trillion budget proposal may spell the end of the Federal Perkins Loan program.

Bush’s proposal, which was sent to Congress yesterday, is asking for a recall of federal funds from the Perkins Loan. The funds would then be redirected to the Federal Pell Grant program, according to a report by the Chronicle of Higher Education. The money would be used to eliminate a $4.3 billion deficit in the grant program and increase the maximum Pell Grant from $4,050 to $4,550 over the next five years.

Mark Evans, the director of Student Financial Aid, said there are currently 2,700 Kent State students with Perkins Loans, and the average amount awarded to students is $2,000. Cuts to the program would likely take place for the 2006-07 school year.

“I think there are a number of details to be worked out,” Evans said, “but I think it sounds like the program will be in existence as we know it for the 2005-2006 school year.”

Pat Myers, director of government relations, said the budget proposal has to make its way through committees and is eventually voted on by Congress, which she estimates won’t happen until early October of this year.

“A lot of times things are proposed, but when they (Congress) understand the impact they will often change their minds,” she said.

Overall, Bush’s budget proposal calls for the elimination or reduction of 150 government programs — the Perkins Loan being one of them, reported

“I think he’s probably becoming concerned with national debt,” Myers said. “I’m assuming he’s looking at a number of different areas to cut back.”

For every $100 loaned to students in a Perkins Loan, Evans said, $75 comes from the federal government, while $25 comes from the university.

“If the federal government was to want their portion back, about 75 percent of our funding level would have to be returned to the Department of Education,” Evans said.

The first option for students losing Perkins Loans would be federal subsidized or unsubsidized loans.

“Students then, if they needed to, would have to go to a less favorable loan program such as a private educational loan,” Evans said.

Private loans, he said, are unfavorable because they require a credit check and usually have higher interest rates.

Students such as freshman English major Sara Noyes then may have to pay more through private loans if they lose their Perkins Loans.

“It does make me kind of upset,” Noyes said. “I have private loans, too, so I’m concerned I’ll have to pay more back in the long run.”

Contact administration reporter Ryan Loew at [email protected].