The Federal Perkins Loan Program, one of the oldest student loan programs in the nation, expired Wednesday at midnight after Congress failed to reauthorize it.
About 1,700 public and private institutions, including the University of Maryland, participated in the federal program, which provided low-interest loans to needy students over the past 57 years.
More than 400,000 students nationwide used the loans in 2012-13, including 2,238 students within the University System of Maryland and 650 at this university, according to the latest Education Department data.
READ MORE: Nationwide Perkins loan program faces possible expiration this month
“We hate to see a great program like Perkins go away,” Financial Aid Director Monique Boyd said. “But because of Congress, unfortunately, the university is unable to offer new Perkins loans to students.”
All university students eligible for the loans, generally for between $1,500 and $3,000, started receiving emails at the beginning of September about the program’s potential expiration. Originally, they were told they had to accept their loan offers by Sept. 18 so paperwork could be processed before the congressional deadline. The acceptance deadline was later extended to Sept. 25.
“We wanted to extend it because we wanted students to take advantage of it,” Boyd said. “We know students need it to help subsidize their educations.”
Students who accepted the support will still receive it for the 2015-16 year, Boyd said.
“There’s a grandfather rule in place, so for the students who borrowed the loan for the 2014-15 year and who have already borrowed for 2015-16 and remain in the same major, they can receive the Perkins loan for future academic years,” Boyd said in a Sept. 8 interview. “Even though some students won’t be able to get it for future academic years, there will be a subset who will.”
READ MORE: STUDY: Graduation rate gap for low-income UMD students above average
The Perkins program was previously due to expire last year, but Congress granted a one-year extension through the fiscal year that ended Sept. 30. Although the House unanimously passed a bill Monday that would have extended it once more, the attempt failed in the Senate.
Sen. Lamar Alexander (R-Tennessee), chairman of the Senate Committee on Health, Education, Labor and Pensions, blocked the bill. In the hours before the deadline, he tweeted that he proposes Congress “replace the #PerkinsLoan program … w/ student loans that are simpler and have lower interest rates and more generous income-based repayment opportunities.”
“While I look forward to a broader conversation about improving federal support for students as we look to reauthorize the Higher Education Act,” Sen. Tammy Baldwin (D-Wisconsin) said during a Senate hearing Tuesday, “we simply can not sit idly by and watch the Perkins Loan Program expire as America’s students are left with such uncertainty.”
