With Perkins loans ending, students scramble

Abigail Anderson had it all figured: With multiple loans, a work-study job and scholarships, she could pay for Immaculata University for all four years.

Not anymore.

Anderson, a freshman majoring in fashion merchandising, found out recently that after this year she will lose her federal Perkins loan, which amounts to almost $2,000.

"It changes everything," said the Magnolia, Del., native, who will have to look for other scholarships, or turn to her parents, whom she said can't afford it. "Every little amount counts. It all makes a difference."

Thousands of students in Philadelphia and across the nation may find themselves scrambling next year with the loans that higher education officials call a critical piece of financial aid that keeps many students in school.

Calling the Perkins loan program costly and overly complicated, the Senate allowed the federal loan program to expire Sept. 30, though a group of bipartisan senators last week mounted yet another effort to try to revive it.

Students who received the loans in 2014-15 or earlier will be grandfathered until 2020. But those who got the money for the first time this year - like Anderson - and high school students who would qualify will not have access to the loans next year.

Nearly 50,000 students in Pennsylvania, New Jersey and Delaware received about $90 million in Perkins loans in 2013-14, says the U.S. Department of Education.

"This is what can make or break somebody's ability to stay in school," said David Glezerman, assistant vice president and bursar at Temple. "It really helps a lot of people."

Local colleges and universities account for some of the greatest numbers of loans nationally, according to education department data. At Temple, which was third-highest, 6,200 students received more than $7.9 million in 2013-14. Rutgers University is another heavy user. More than 4,318 students received $6.9 million.

"Hopefully Congress will come to some agreement," said Courtney McAnuff, Rutgers' vice president for enrollment management. "We have a needy student population, and it's just critical to the future of the state - and the future of the country - that these kids be well-educated, because that's the only way out of poverty."

The finance team at Rutgers is working on a proposal to cover the loss of the Perkins loans and will make a recommendation to its chancellors in the next month or so, he said. But it would take several years to make up the full loss, he said.

Begun in 1958 and aimed at low- and middle-income students, the Perkins Loan Program was designed to fill any financial gap remaining after other forms of aid are applied to a student's college or graduate school costs.

Undergraduates can receive up to $5,500 a year, no more than $27,500 total; graduate and professional students can receive up to $8,000 at a time, no more than $60,000 total.

They are meant to be a cheaper and more-forgiving option than private loans, with an interest rate of five percent and with repayment grace periods until after graduation.

Perkins loans are only one form of federal higher education aid and actually account for a small amount - about $8.2 billion - of the total $1.2 trillion in federal loans currently given out. Perkins are different in that they are administered by the colleges, which act as their students' lenders.

U.S. Sen. Lamar Alexander, a Tennessee Republican and former U.S. Secretary of Education, pushed for expiration of the Perkins program. He said that reauthorizing it for the next 10 years would cost $5 billion, money that may be better spent on Pell grants.

Alexander said in a statement that he's hoping to replace the Perkins program with simpler, lower-interest student loans with "more generous income-based repayment opportunities."

Sen. Robert P. Casey Jr. (D., Pa.) said he understands the desire to make the program simpler. But that will take time.

"Don't let the program expire while you're working on those potential changes," said Casey, who is among 54 senators who sent a letter to Senate leaders last week, urging an extension.

Though the loans may seem small, they are an important way to cover non-tuition costs of college, such as rent, textbooks, groceries and school supplies, said Donna Safar, 22, a Rutgers-Camden student who has received small amounts, such as $500 in spring 2012.

Safar entered Rutgers-Camden as part of a state program to support low-income, first-generation college students.

"Even if you receive full financial aid, there's still going to be some sort of gap you need to bridge," said Safar, a full-time student who works two jobs totaling more than 40 hours a week. "And it's really important. Those small gaps discourage people from low-income backgrounds from even attending college. When you know that you don't have it and your family doesn't have it, you might give up."

For Victor Rosario Jr., son of a single mother who earns $16,000 a year, Perkins loans helped him pay for his education at Temple University his first two years - and even that wasn't enough. He is attending Temple part time this semester so that he can work two jobs and commute to campus one day a week from New York City.

Without the loans though, he says he would have been hard-pressed to start at Temple, let alone pursue his dream of becoming New York City's first Dominican mayor.

Because the 21-year-old junior majoring in economics is from out of state, tuition and fees ran more than $25,000 last year and room and board another $10,000 or so. Rosario secured several loans including $1,500 from Perkins the first year and $2,500 the second and a Pell grant. He also worked on campus.

Even so, he expects to graduate owing more than $100,000.

Amber Gunn, 18, a Temple freshman biology major from Hazleton, didn't have enough money to pay her tuition bill this summer. She said she couldn't get a loan on her own, and her mother wasn't able to cosign. So she went to Temple's financial aid office, which helped her get a $5,000 Perkins loan.

"Without that I probably wouldn't have been able to enroll for my first semester of school," she said.

Gunn said she's not sure what she'll do next year without the loan: "I'm kind of in a predicament."

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