Perkins Federal Student Loan Program Ends
As of October 1, students can no longer take out federal Perkins Loans to help them pay for college.
The government’s oldest federal student aid program, established in 1957, ended Sept. 30, after Congress failed to extend the program. As a result, up to 500,000 eligible students at 1,500 colleges will no longer be able to take advantage of this financial aid program.
Expired program provided billions in financial aid
According to an article from Credible News, colleges and universities issue $1.2 billion each year to students who need financial aid through the Perkins Loan Program.
ACA International reports that the program has provided more than $28 billion in loans through nearly 26 million awards to students across the United States, according to the office of U.S. Sen. Tammy Baldwin, D-Wis.
To be eligible for a Perkins Loan, student also had to attend one of about 1,500 schools that participated in the program. These colleges served as the lenders for the loans, although they were financed by the federal government.
End of Perkins hurts needy students
The expiration of the Perkins Loan program is a blow to students with financial need.
Unlike Unsubsidized Stafford loans and Graduate or Parent PLUS loans, Perkins Loans do not accrue interest while the student is in school, saving many borrowers up to thousands in interest.
Also unlike both Subsidized and Unsubsidized Stafford and PLUS Loans, there are no origination fees for Perkins Loans. And depending on what year a student borrowed for college, the interest rate for a Perkins Loan could be lower than their Stafford loans, as well as their Graduate or Parent PLUS loans.
Since there are caps on Stafford Loans and college costs continue to rise, the demise of the Perkins Loan program means more students with financial need will be forced to take out private student loans to pay for college, which don’t always come with the same protections as federal student loans.
We’re also likely to see more parents and graduate students take out PLUS loans, which come with high interest rates and fees.
How to make up for Perkins Loans
We’re very disappointed to see the Perkins Loan program end, and we recognize the burden this places on students and families.
While we work to help students and families minimize their college debt, the Perkins program provided a relatively safe student loan option for students with additional financial need.
But if you need additional funding for college, there are still alternatives.
While some private loan lenders can be shady, we’ve had great experiences working with LendKey, a company that provides private student loans through their network of not-for-profit credit unions. Their private loan interest rates start at just 3.89%, which is lower than the current federal Stafford Loan interest rate and lower than the former Perkins Loan interest rate.
If you’re affected by the end of the Perkins Loan program and want personalized help sorting through your options, or need help figuring out how to pay for college, feel free to give our experts a call at 1-888-234-3907 or send us a message and we’ll get back to you ASAP.