Bush proposes cutting Perkins Loans for ’08 federal budget

President Bush proposed a new budget for 2008 that would limit the Federal Perkins Loan Program. The Bush administration proposed a restriction on the amount of money colleges can collect from students paying off Perkins Loans, while at the same time providing the federal government with the authority to demand that interest money from the loans goes directly to federal collection agencies. Congress has yet to approve this budget.\nThe Perkins Loan, which accounts for approximately 3 percent of financial aid in the United States, is a loan for students with exceptional financial need. The U.S. Department of Education Web site lists the federal Perkins Loan as providing anywhere from $2,500 to $4,000 per year for an undergraduate student who qualifies. Graduate students can receive as much as $6,000 annually.\n“It’s a very complicated issue,” said IU’s Director of Federal Relations Doug Wasitis in reference to student loans, “and, keep in mind, that this is just one element of the student loan.”\nWasitis said Bush proposed to eliminate the federal Perkins Loan in 2006 and 2007, but that part of the budget did not pass Congress. \n“Usually what will happen is that the president will propose but Congress will not go along with that,” Wasitis said. “I think that’s what happened in 2006 and 2007. Congress will then make a recommendation for the budget, and Bush can choose to go along with it or not.”\nJeremy Guthrie is one student who would be affected if the Perkins Loan were eliminated. Guthrie said he has been able to attend college because he has demonstrated to the government that he has extreme financial need. Guthrie was a student at IU for two years, but due to financial need, he decided to take some time off. He works a night shift at Wal-Mart replenishing merchandise on the shelves. Guthrie receives four different forms of financial aid: the Perkins Loan, the Stafford Loan, Sallie Mae and the 21st Century Scholarship.\n“That money is very important to me,” Guthrie said. “If I didn’t have that loan, I’d have to go through a bank and get a higher interest rate. I’m very thankful for it.”\nIn addition to Bush proposing the elimination of the Perkins Loan, he also is keeping with previous budget practice in increasing the Pell Grant. Although some are dissatisfied that the Perkins Loan may be eliminated, others are glad that more money is being allocated toward the Pell Grant.\n“I get the Pell Grant, which increases as I go along with school,” said junior Lacy Padgett. “When I was a freshman, I got $600, and now it’s up to $1,200.”\nLike Guthrie, Padgett is a 21st Century Scholar. She said that the Pell Grant cushions her living expenses and allows her enough money to buy necessary books.\nAlthough Bush has proposed to get rid of the Perkins Loan and increase the Pell Grant, Congress must approve the budget before enacted.\nSusan Pugh, associate vice chancellor for enrollment services and director of the Office of Student Financial Assistance, said that the budget will probably not be finalized until fall of this year.\n“We’re already awarding federal Perkins Loans to new freshmen and will be doing so in June for next year,” Pugh said. “Any change in allocation won’t be made for this coming year (‘07-’08). We’ve already gotten confirmation from the federal (government), so we know we have the money. It’s a sure thing that we are going to get the money for next year.”