Federal Relations

By Cynthia Littlefield, Vice President for Federal Relations, AJCU

Perkins Loans Are Resurrected

The Federal Perkins Loan Program was discontinued on September 30th, causing uncertainty and confusion for over 500,000 students across the country. Over the next two and a half months, significant efforts were made by AJCU and the Campus-Based Aid Coalition to save the program. Working with Senators Tammy Baldwin (D-WI), Patty Murray (D-WA) (Ranking Member of the Senate Health, Education, Labor and Pensions [HELP] Committee) and Bob Casey (D-PA) (Jesuit alumnus of College of the Holy Cross) proved to be fruitful for their negotiations with Senate HELP Committee Chair Senator Lamar Alexander (R-TN). 

Senator Baldwin’s first efforts to offer two Unanimous Consent (UC) agreements on the Senate Floor were met with opposition from Chairman Alexander. She was undaunted and introduced an amendment to extend the Perkins Loan Program in the Elementary and Secondary Education Act [ESEA] conference; while this was withdrawn, the point was made. 

Two weeks ago, the higher education community sent a letter from the American Council on Education (ACE), signed by 53 organizations (including AJCU) and 536 higher education institutions (including all 28 Jesuit colleges and universities) to the Senate in support of Baldwin’s amendment. This show of support also contributed toward a compromise for Perkins Loans.

On December 15th, the Senate reached agreement on a Unanimous Consent to extend Perkins Loans for two years. This time, the effort was led without any objections by Senators Alexander, Baldwin and Casey, together with Kelly Ayotte (R-NH) and Rob Portman (R-OH). The House finished their UC on Thursday, December 18th in less than two minutes; Representative Mike Bishop (R-MI) asked if there were any objections and without any, it passed. The bill will soon be signed by President Obama.

In essence, Perkins Loans are saved for two years, giving time for AJCU and the higher education community to keep working to fine-tune this critical program through Higher Education Act (HEA) Reauthorization. In addition, institutions will not have to return their Perkins Loan revolving funds to the U.S. Department of Education because Perkins Loans are now reauthorized.

However, the policies used as offsets to pay for this extension are problematic: 1) The Perkins Loan Program was eliminated for graduate students, although current graduate students can receive their loans through the 2016-17 academic year. 2) Undergraduate Perkins Loan recipients will receive their loans through 2017, but new undergraduate Perkins recipients would have to exhaust subsidized and unsubsidized Stafford Loans before their Perkins Loans could be dispersed.

Omnibus Bill Passes Both Chambers

On December 18th, the House passed the Omnibus bill by 316-113, followed by the Senate vote of 65-33. Included in this $1.1 trillion bill is the tax extender package which produced a permanent Charitable IRA Rollover, Research & Experimentation Tax Credit (R&D Tax Credit), and above-the-line tuition deductions for two years.

The Omnibus bill had a $1.2 billion increase for education. Higher education fared well by receiving an increase of $140 on the Pell Grant maximum award to $5,915. Important Campus-Based Aid programs such as the Supplemental Educational Opportunity Grant (SEOG) program and the Federal Work Study (FWS) program were level-funded. Support for these vital need-based programs will be helpful for future HEA Reauthorization discussions. The TRIO and GearUp programs also received increases. None of the proposed higher education riders on gainful employment, credit hour, and state authorization or teacher regulations were included in the bill.

All in all, AJCU and Jesuit institutions received many Christmas presents this year: saving Perkins Loans; increases for Pell Grants; saving SEOG and FWS; making the Charitable IRA Rollover permanent; and above-the-line tuition credits.

We wish all of you a Merry Christmas and a healthy and joyous year ahead!