A Peek at the ‘New’ Perkins Loan Program | 07.14.09
SAN ANTONIO — Most of the attention surrounding the Obama administration’s plan to restructure the federal financial aid programs focuses on the fate of the guaranteed student loan program, but equally interesting — and perhaps more significant in the long term — is the Education Department’s vision of an altered Perkins Loan Program, about which administration officials offered a few more details during sessions at the National Association of Student Financial Aid Administrators here Monday. The Perkins proposal is noteworthy because department officials say they would use the billions of dollars they plan to allocate to colleges in “loan authority” to encourage them to pursue policies the administration favors, like graduating low-income students, limiting tuition increases, and providing need-based aid to students. Dan Madzelan, who is acting as assistant secretary of postsecondary education, said that the department was still developing the exact measures it would use to achieve those goals. But he said that after making whole the colleges that now receive about $1.5 billion in Perkins loan funds, the department could distribute the remaining $4.5 billion in lending authority to institutions based on the extent to which they (1) graduate Pell Grant recipients, (2) keep their published tuition below the average or median for their sector (public two-year, private four-year, etc.), and (3) award non-federal need-based aid to their students. “When we’re thinking about the kinds of incentives we can provide, money’s a pretty good one,” Madzelan said.
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