ED Plans to Treat Perkins Loans Like…

ED Plans to Treat Perkins Loans Like All HEA Programs Unless Congress Says Otherwise, Will Provide Additional Guidance in Advance of FSA Conference 

On October 1, just like all programs in the Higher Education Act (HEA), the Perkins Loan Program received an automatic one-year extension to operate through September 30, 2015, under section 422(s) of the General Education Provisions Act (GEPA). Prior to the extension, a variety of Federal Student Aid programs, including Perkins Loans, were authorized through September 30, 2014.  Perkins is authorized under Section 461(b) of the Higher Education Act (HEA).

The Higher Education Act contains a conflict on the Perkins Loan Program that has caused a great deal of confusion.  One section of the law, Section 466, says the program sunsets starting October 1, 2012, while Section 461 says the program is authorized to continue through 2014, like the other federal student aid programs.  To resolve the conflict, the Department of Education released guidance in 2011 via Dear Colleague Letter GEN-11-02 declaring the sunset language in Section 466 “outdated” and that the authorization in Section 461 takes precedence since it was the most recent Congressional action on the program.

If Congress does not pass a bill to reauthorize the Higher Education Act (HEA) by the end of FY 2015 (September 30, 2015), an extension to continue the authorization of numerous programs, including Perkins Loans, will be required.  That means that the Perkins Loan Program, like other HEA programs, continues without change until Oct. 1, 2015, unless Congress acts between now and then.

COHEAO attended a briefing by several Department of Education officials where a question was asked about Departmental guidance on how institutions should deal with the conflict in the law regarding the future of the Perkins Loan Program.  The Department re-affirmed existing guidance and provided some new information.

If Congress, as it did 15 times during the previous HEA reauthorization cycle, simply extends the expiration date of the HEA programs, the Department will consider that to include Perkins, unless Congress specifically says otherwise.   This reaffirms the information provided by a Department official at the COHEAO Mid-Year Conference in early August.

The Department is aware of questions institutions have regarding how to structure award notices to students this coming winter and spring, when award letters go out to students for the 2015-16 academic year.  They also are working to be prepared for how to handle a Perkins wind-down should Congress decide not to continue the program.  The Department plans to announce their guidance and proposals just prior to the upcoming Federal Student Aid Conference and include sessions on the information at the conference.  They plan to inform schools how to handle Perkins awards for the next academic year if Congress has not yet acted by the time award letters are sent to students.  The FSA Conference takes place Dec. 2-5, 2014, in Atlanta.

COHEAO will be attending the FSA Conference and has also offered to work with the Department on these issues.  COHEAO believes that the Department should recognize that if a program is authorized at the beginning of the school year that schools can make awards for the entire year.  This logic applies to the other programs that would expire as of October 1, 2015, and is the practice Congress followed between 2004 and 2008, the last time the HEA was reauthorized.

COHEAO members are strongly encouraged to get involved with our advocacy efforts to preserve the program.  Additional information is available on our Advocacy webpage.  COHEAO members interested in becoming more involved in advocacy efforts may also contact Jan Hnilica or Karen Reddick.

The advocacy effort will remain ongoing, and we could use the support of every COHEAO member, but in the meantime, schools should continue to operate the Perkins Loan funds in a normal fashion.  In addition to GEN 11-02, the Department has continued to encourage schools to maintain a “business as usual” attitude toward Perkins Loans for the upcoming award year.

Information provided by Karen Reddick – COHEAO Membership Chair 11-3-14

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