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Senate and House Appropriations Committees Begin Work on LHHS FY09 Spending Bills

(June 24, 2008). The Senate Labor, HHS, Education Appropriations Subcommittee marked up the appropriations bill for the Department of Education today. The campus-based student aid programs were all level funded with the exception of the Perkins Loans. While Perkins Federal Capital Contributions were not funded, Perkins Loan cancellations received an additional $5.673 million to help with the shortfall. TRIO funds were increased by $10 million and GEAR UP was increased by $5 million. Pell Grants were funded at the same level as the President requested for a maximum award of $4,310 which is a $69 increase over FY2008.

It is expected that these levels will prevail when the full Senate Appropriations Committee meets Thursday to complete its work on the legislation.

The House Labor, HHS, Education Appropriations Subcommittee held its markup last week and level funded campus based aid programs and provided increases for Pell grants. The House provided an increase for Pell grants of $169, bringing the maximum award to $4,410. (Another $490 per Pell grant recipient is also available via funding provided by the College Cost Reduction Access Act of 2007.) The full House Appropriations Committee is also scheduled to meet this Thursday to complete its work.

Many expect that the Labor-HHS-Education spending bill will become stalled this year, over the Congressional and Presidential elections as well as various threats from the White House over spending levels.

COHEAO Urges Grassroots Effort to Fund Perkins!

(June 2008). COHEAO needs your help to send letters to Members of Congress asking for funding for the Perkins Loan Program including the Federal Capital Contribution and reimbursements for cancelled loans. Please help in this effort by customizing and faxing or emailing this letter to members of the House and Senate. This is extremely important in order to support advocates in Congress who are working for Perkins Loan funding! We need to seize the chance to get Perkins Loan funding restored.

If you do not know your House Representative, visit www.house.gov to fill in your zip code and it will direct you to your Member. Also attached is a listing of all Senators and their addresses. COHEAO recommends sending letters to both Senators as well as your House Member including the Member from your hometown as well as the Member representing your place of business or school. If you have any questions, please contact Krista, Wes or Harrison at the COHEAO offices: kheckler@wpllc.net, whuffman@wpllc.net, hwadsworth@wpllc.net .

Click here to view the letter.
Click here to see a listing of Senate Members.

COHEAO and NACUBO Survey Reveals Perkins Loan Shortfalls

(May 2008). Recently, the Coalition of Higher Education Assistance Organizations (COHEAO) partnered with the National Association of College and University Business Officers (NACUBO) to survey their membership about a possible shortfall in their Perkins Loan fund.

Of the institutions that responded to the survey, 28 percent indicated that they expected their institution to have a shortfall in their Perkins Loan fund on June 30, 2008, which would require their institution to make a loan to the fund. Another 18 percent were unsure if they would have a shortfall.

The institutions expecting a shortfall are primarily small, private institutions. 68 percent of the 76 institutions are private, four-year institutions, and more than 60 percent have a full-time equivalent student enrollment of 5,000 students or less.

The average projected shortfall anticipated at these institutions is $560,304, or a median of $200,000. Thirty-one percent of institutions anticipated that collections in the upcoming fiscal year would be sufficient to fully repay their institution’s loan to the fund. However, 37 percent indicated that they did not believe that collections would be sufficient.

Colleges and universities are finding themselves in this unprecedented situation due to several factors over the last few years, including the lack of new capital contributions by the federal government and large swings in the number of borrowers choosing to consolidate Perkins loans with their other federally guaranteed loans after leaving school.

This shortfall situation will require institutions to find institutional dollars to lend to their Perkins fund. Even at institutions that do not have shortfalls, students are likely to receive much less support from the Perkins Loan program next year.

ED Changes Rules on FISAP to Allow More Time to Repay Loans to Perkins Funds

(May 2008) In April, the Department of Education issued a Dear Colleague Letter providing information about the Fiscal Operations Report for 2007-08 and Application to Participate for 2009-2010 (FISAP) for the Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant, and Federal Work Study programs.

The letter notes several changes to the FISAP from previous years. Changes included: minor edits for clarity and consistency; instructions that if a school intends to reclaim any additional Institutional Capital Contribution (ICC) that the school deposits into the Perkins Loan Fund during the 2007-2008 Award Year, the additional ICC must be entered as a short-term, no interest loan in its accounting records; and the definition of an Independent Student is revised in the FISAP Instruction Booklet to reflect changes made by the College Cost Reduction and Access Act (the CCRAA).

On a call this week between COHEAO and the Department of Education, Department officials explained that the requirement that an identified, short-term loan be repaid within that academic year has been deleted. ED stated that institutions will be able to reclaim their loans to the fund over a longer period of time as long as accurate accounting records are kept on file and it is specifically noted what the short-term loan to the fund is.

To view the technical changes visit: http://www.ifap.ed.gov/nsldsmaterials/attachments/TechnicalUpdatePK200802.pdf

Congress Passes Fourteenth Extender

(May 2008). The House and Senate passed S. 3035, the fourteenth extension of the Higher Education Act on May 20. The new extender bill is through June 30, 2008 and did not offer further amendments to HEA.

At this time, it is unknown what effect Senator Kennedy’s illness will have on the conference report negotiations. After receiving a diagnosis of a malignant brain tumor (and numerous well-wishes and kind words from political friends and foes alike) this week, Kennedy is currently awaiting further test results and evaluating his treatment options. A plan for a meeting of the chairmen and ranking Republicans of the House and Senate education committees was postponed this week, but staff discussions continued intensively, with hours-long meetings throughout the week. Until Kennedy’s prognosis is known, however, a formal conference process won’t start, and final decisions on some of the remaining sticky issues will have to wait. Improvements to the Perkins Loan program are thought to be receiving favorable consideration.

COHEAO Hosts Teleconference on Mandatory Assignment Regulations

(May 2008). On May 5, COHEAO hosted a teleconference on the new mandatory assignment regulations and what schools needs to know. Mandatory assignment is expanded by a new Education Department regulation scheduled to take effect July 1, unless the law is changed by Congress.

Panelists included Ellen Harris-Small, Assistant Manager of the Office of Billing & Collections in the Department of Student Accounting Services at Rutgers University. She provided helpful information in solving problem accounts and their acceptability by the Department of Education. Lori Hartung, Regional Sales Manager with Todd, Bremer & Lawson, Inc., provided information on current and new regulations, how to prepare your portfolio and how to assign loans.

Staff from the Department of Education also participated in the call. Brian Smith and Shirley Wheeler presented information on how they plan to implement the new regulation. Smith and Wheeler announced that when this regulation takes effect they plan to implement the regulation starting with a pilot group of 10 - 15 schools. ED plans to work one-on-one with these schools in order to get a better understanding of how the process will work and to weed out any problems they may incur when dealing with a larger group of schools. The Department is also working on putting together an “Assignment Update” package for schools.

Wheeler noted that the Department is looking at pursuing loans in default greater than 10 years. These are the loans with the largest volume and ED plans to start there even though the regulations require assignment of loans in default seven or more years – that is just a minimum requirement according to Smith. Smith also noted that the House Higher Education reauthorization bill includes language limiting the Department’s authority to collect these loans. He stated that if this provision is accepted in the conference agreement, ED would need to reassess their mandatory assignment procedures.

COHEAO Submits Comments on HEA Reauthorization Conference

The Senate and House have started to conference the Higher Education Act reauthorization bill (S. 1642 and HR 4137). Last week, COHEAO sent a letter to Capitol Hill urging Members to include the reauthorization of the program in the Conference Report as well as the Perkins Loans Proposals included in H.R. 4137.

The House bill prohibits the Department from requiring the assignment of defaulted Perkins Loans except in cases where schools fail to knowingly maintain records or decide to withdraw from the program or decide not to service the loans. It also requires the Department to return Perkins funds collected from voluntarily assigned loans to the institution that assigned them within 180 days, less collection costs of up to 30 percent.

COHEAO strongly urges you to call and/or send letters to Members of the Senate Health, Education, Labor and Pensions (HELP) committee and the House Education and Labor Committee and urge them to support the reauthorization of the Perkins Loan Program and to support the House position on the assignment of Perkins Loans.

Click HERE for a sample letter. Click HERE to see the COHEAO letter.

Reps. Bishop and McMorris Rodgers Launch DCL Supporting Perkins

Congressman Tim Bishop (D-NY) and Congresswoman Cathy McMorris-Rodgers (R-WA) are circulating a Dear Colleague request asking House members to sign a letter to Chairman David Obey (D-WI) and Ranking Republican James Walsh (R-NY) of the House Appropriations Subcommittee on Labor, Health and Human Services and Education calling for the funding of the Perkins Loan program in FY 2009-- to put $100 million into the Federal Capital Contribution and fully fund loan cancellations. The letter also rejects the proposal by the Administration to eliminate the program. COHEAO members need to do everything we can to encourage Members of Congress to sign on to this letter. Please help in the effort to get signatures on this letter by calling or emailing the U.S. House!

Please call or email House members in your state and ask them to sign the letter being circulated by these two House members supporting the Federal Perkins Loan Program. Be sure to ask them to let you know if they have done so.

Kate Austin in Congressman Bishop’s office at 202-225-3826 and Kristin Garesche in Representative McMorris Rodgers office at 202-225-2006 are the staffers handling this. If you have any questions, please contact Krista or Harrison at 202-289-3900 or email us at kheckler@wpllc.net or hwadsworth@wpllc.net .

CLICK HERE to view the letter.

House Passes Higher Education Act Reauthorization

Thursday, February 7th, the House of Representatives passed HR 4137, the College Opportunity and Affordability Act of 2007 (Higher Education Act reauthorization) by a vote of 354-58. This legislation is a landmark for the Perkins Loan Program, since it demonstrates very strong support in the House for the program in a number of ways, only four days after the Administration again called for its destruction. COHEAO thanks the House for the strong bi-partisan support shown the Perkins Loan Program.

Passing by voice vote was a non-binding amendment offered by Representative Jay Inslee (D-WA) calling for funding of the Federal Capital Contributions to the Perkins Loan Program. Representative Ric Keller (R-FL) also spoke in support of provisions in the bill that strengthen the Perkins Loan Program. He further noted that the Perkins Program, along with Pell Grants, is the “heart of the HEA reauthorization.”

Specifically for the Perkins Loan Program the bill does the following:

• Reauthorizes the Perkins Loan Program through 2014.
• Prohibits the Department from requiring the assignment of defaulted Perkins Loans except in cases where schools fail to knowingly maintain records or decide to withdraw from the program or decide not to service the loans.
• Require the Department to return Perkins funds collected from voluntarily assigned loans to the institution that assigned them within 180 days, less collection costs of up to 30 percent.
• Raises annual loan limits to $5,500 for undergraduates and $8,000 for graduates, with commensurate increases in aggregate levels.
• Raises the maximum authorized Federal Capital Contribution from $250 million to $350 million per year. (Although this would encourage the Appropriations Committees to include funds for Perkins in legislation funding education programs, separate appropriations legislation is required to actually provide the money.)
• Raises the allowance for books and supplies from $450 to $600
• Eliminates the requirement that requests for forbearance be in writing.
• Reduces the number of on-time payments needed for loan rehabilitation from 12 to 9.
• Makes it easier for disabled veterans to have their loans discharged
• Expands the occupations for which Perkins Loans may be cancelled to include: full-time staff member in a pre-kindergarten or child care program that is licensed or regulated by the state; full time faculty member at a tribally controlled university; librarian with a master’s degree in library science who is employed in a school served under Title I of the EASEA, or a public library serving a Title I school; full-time speech language therapists with a master’s degree working exclusively in a Title I schools; and for full time firefighters.
• Expands disclosure requirements when a Perkins Loan is being consolidated to inform the borrower about loss of benefits, etc.
• Prohibits the Department from establishing a national unit record database.

President Calls for Elimination of Perkins

Today the President unveiled his budget proposal for FY 2009. The detailed appendix of the President’s FY 2009 budget for the Department of Education and other departments is now on line at: http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/edu.pdf

Once again, the President requested the elimination of the Federal Perkins Loan Program as well as the “recall” of all federal funds held in the revolving funds of participating institutions, which it claims will save $1.12 billion in FY 2009. (Page 359) The budget document says, “The program is duplicative of the larger and more broadly available Federal Family Education Loan and Direct Loan programs. The Perkins Loan account records amounts recalled from Perkins Loan institutions and subsequent repayments on outstanding Perkins Loans, as well as reimbursements of institutional funds to participating schools.” The budget says that 504,000 students received $1.103 billion in Perkins Loans in FY2008 (10/1/07-9/30/08).

The FY 2009 request includes nearly $19 billion in combined discretionary and mandatory funding for the Pell Grant program to support awards to 5.8 million students and increases the maximum award to $4,800. The Pell Grant discretionary increase ($2.6 billion) proposed for 2009 reflects updated cost estimates for the program as well as a small increase needed to restore the discretionary share of the maximum Pell Grant to $4,310. The 2009 requested increase sets the Pell Grant program on a 5-year path to a $5,400 maximum award as implemented by the College Cost Reduction and Access Act (CCRA).

The budget also would support almost $75 billion in new guaranteed and direct student loans.

The Federal Supplemental Educational Opportunity Grants (SEOG) Program has also been proposed for elimination by the President. The program provides need-based grant aid to eligible undergraduate students to help reduce financial barriers to postsecondary education. According to the Department, “Federal funding allocations are awarded to qualifying postsecondary institutions under an outdated statutory formula, and individual SEOG awards are not optimally allocated based on a student's financial need.”

The FY 2009 budget includes $2.1 billion for Higher Education Programs. The request provides level funding of $885.2 million (discretionary and mandatory funding) in order to maintain college preparation and college student support services in the Federal TRIO Programs, as well as $303.4 million for the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) and $1.17 billion for Work Study.

This afternoon the Department of Education will hold a briefing detailing more specifics in the FY 2009 budget proposal, which COHEAO staff will attend.

COHEAO Announces Results of Directors Election

COHEAO recently held elections for several Board of Directors positions. In accordance with COHEAO’s Bylaws, an election is held each year to fill Board of Director positions on a rotating basis. The following positions were up for election: Treasurer, Secretary, Member at Large (three positions).

COHEAO is pleased to announce that elected to two-year terms are John Lynch from Educational Computer Systems Inc. for Treasurer, Bob Frick with University Accounting Service for Secretary, Lettie Clark from Gonzaga University for Member at Large, Dennis DeSantis of the University of Pittsburgh for Member at Large, and Suzanne Hickey from Bridgewater State College for Member at Large.

Congratulations to the winners! The new members will officially take office at the annual conference. COHEAO thanks all who voted in the election, and especially thanks all who ran for the Board. It is a sign of a strong organization that there is considerable interest in volunteering to help lead it, and we encourage the unsuccessful candidates to try again and in the meantime to stay involved in the other opportunities to help our organization, such as the Perkins Task Force, the Commercial Member Committee, and the Conference Agenda Committees.

House Education And Labor Committee Report Comments on Perkins Loans

Following is the Education and Labor Committee’s explanation of its actions on the Perkins Loan program in its version of the Higher Education Act reauthorization bill, H.R. 4137. The final paragraph refers to mandatory assignment of defaulted loans to the Department.

“Part E--Perkins loans

The purpose of the Perkins loan program is to lend low-cost funds to borrowers with demonstrated financial need. Perkins loans make a significant difference for low-income borrowers who do not otherwise receive enough funds to pay for college. The Committee believes that, given this purpose and the need the Perkins loan program will be an essential of higher education financing for the foreseeable future.

Throughout the history of the Perkins Loan program, $7.9 billion in federal contributions has been leveraged to award over $24 billion in loans to financially needy students through almost 22 million aid awards, making it one of the most effective public-private partnerships in the federal government. Perkins loans offer financially needy students a long-term, fixed 5 percent interest rate loan. Without Perkins loans, the over 700,000 borrowers would be forced to borrow from high-cost alternative sources, such as private education loans.

H.R. 4137 reauthorizes the Perkins loan program and increases the annual maximum loan limits from $4,000 to $5,500 for undergraduates and from $6,000 to $8,000 for graduate or professional students. Additionally, the aggregate loan limits are increased from $20,000 to $27,500 for undergraduates and from $40,000 to $60,000 for graduate and professional students. H.R. 4137 emphasizes that collections of assigned loans should be returned to the revolving fund of the campus that assigned the loan, after deducting the Department's collection costs. The bill harmonizes certain requirements under the Perkins loan program with those of the FFEL and DL programs. In particular, Perkins borrowers would no longer be required to request forbearance in writing. In addition, in order to rehabilitate a defaulted loan, borrowers would be required to make nine consecutive monthly payments. H.R. 4137 also provides improved disclosure in the consolidation process regarding loss of Perkins benefits and allows for expanded cancellation opportunities for full-time firefighters, full-time faculty at tribal colleges, librarians, and speech-language pathologists.

The Committee notes that the Secretary lacks the authority to require assignment of defaulted Perkins loans and it is the intent of the Committee that any funds collected from defaulted Perkins loans, including loans that have been assigned to the Department of Education for additional collection activities, be returned to the program's revolving fund and available for new

House Education and Labor Committee Passes HEA Reauthorization Bill

House Education and Labor Committee Chairman George Miller (D-CA) and Higher Education, Competitiveness, and Lifelong Learning Subcommittee Chairman Rubén Hinojosa (D-TX) introduced legislation to reauthorize the Higher Education Act and the Committee voted unanimously to approve HR 4137, the College Opportunity and Affordability Act of 2007. This bill would make some important improvements to the Perkins Loan program, both keeping it authorized and limiting the ability of the Department to require assignment of defaulted loans.

This bill in general aims to address the rising price of college and remove other obstacles that make it harder for qualified students to go to college. The bill will move on to the House floor for a vote before being conferenced with the Senate bill. The House is about to recess for a two-week Thanksgiving break, but will be in session for two or three weeks in December. It is possible the bill will be considered then. Final passage is highly unlikely before February or March of 2008.

According to statements made by Committee Chairman George Miller, the College Opportunity and Affordability Act would streamline the federal student financial aid application process; make textbook costs more manageable; allow students to receive year-round Pell Grant scholarships; strengthen college readiness programs; increase college aid and support programs for veterans and military families; improve safety on college campuses and help schools recover and rebuild after a disaster; ensure equal college opportunities and fair learning environments for students with disabilities; and strengthen our nation’s workforce and economic competitiveness by boosting science, technology, and foreign language educational opportunities. The bill incorporates “student loan sunshine” restrictions regarding preferred lender lists and expands the definition of illegal inducements, while adding in additional regulation of non-federal education loans.

Although the goals of the bill are widely supported, and it is very beneficial to the Perkins Loan Program, many college and university officials are concerned about the cost of complying with the many new reporting requirements that will be placed on them.

Relative to the Perkins Loan Program the bill includes the following:

• The Perkins Loan Program is reauthorized through 2014.
• The Department is only required to require the assignment of defaulted Perkins Loans in cases where schools failed to knowingly maintain records or decides to not to service the loans
• Requires the Department to return Perkins funds collected from voluntarily assigned loans to the institution that assigned them within 180 days, less collection costs.
• Increases annual loan limits to $5,500 for undergraduates and $8,000 for graduates, with commensurate increases in aggregate levels.
• Increases the maximum Federal Capital Contribution from $250 million to $350 million per year (this is subject to the funds actually being appropriated.)
• Increase the allowance for books and supplies to $600.
• Removes the requirement that requests for forbearance be in writing.
• Changing the number of on-time payments needed for loan rehabilitation from 12 to 9.

Senator Brown Introduces Perkins Loan Forgiveness Legislation for Firefighters

Senator Sherrod Brown (D-OH) introduced legislation that would provide full-time fire fighters student loan forgiveness of their federal Perkins Loans. Brown’s bill, would help communities recruit fire fighters who are proficient in the latest fire protection technologies.

Brown’s legislation, the Fire Fighter Higher Education Incentive Act of 2007 would help federal, state, city, and county fire districts recruit highly educated fire fighters by forgiving their federal Perkins Student Loans. The legislation provides all employees in fire protection to be eligible for the benefit, including fire fighters, paramedics, emergency medical technicians (EMT), rescue workers, ambulance personnel, and hazardous materials workers.

Senator Brown stated, “Loan forgiveness is both well deserved and an effective recruitment tool. America’s fire fighters literally put their lives on the line for us. The least we can do is give them access to the same benefits as their public safety counterparts.”

COHEAO Submits NPRM Response Letter on Perkins Loans Provisions
COHEAO submitted a detailed response to the Department’s Notice of Proposed Rulemaking of June 12, 2007, which contains provisions that would lead to mandatory assignment of defaulted Perkins Loans, define reasonable collection costs and impose a number of new record-keeping requirements on institutions participating in the Perkins Program. The NPRM also sets forth detailed rules on preferred lender lists and of what constitutes an illegal inducement for a FFELP loan.

The COHEAO response, a draft of which was distributed at the Mid-Year Conference, takes exception with the Department’s proposal to require institutions to assign Perkins Loans that have been in default for more than seven years with no payments for one year. COHEAO believes the Department lacks the authority under the Higher Education Act to require assignment. It also believes that, even if the Department had the authority, it should not require assignment sooner than 10 years of default and, most important, should return collected funds, less costs, to the Perkins Loan program. In addition to the NPRM response, COHEAO is submitting a legal opinion that contends that the Department lacks the statutory authority for a blanket requirement that all loans be assigned.

The Department significantly modified its original position on reasonable collection costs, recognizing that a cap of 24 percent being charged the defaulted borrower was too low for Perkins. Instead the Department proposed a cap of 30 percent for first placements and 40 percent for second placements, plus court costs in the case of litigated loans. In order to keep Perkins Loan funds whole, COHEAO is proposing caps of 33 percent for first placements, 40 percent for second placements and 50 percent for loans that are litigated or are collected from borrowers who have left the country.
Click here to view the letter.

Senate Passes Higher Education Amendments of 2007
On Tuesday July 24, 2007, the Senate passed S 1642, the Higher Education Amendments of 2007, which will reauthorize the Higher Education Act. The bill aims to address the rising costs of higher education, reform the student loan system and promotes teacher preparation programs. The House has yet to draft companion legislation. Relative to the Perkins Loan Program, the bill authorizes appropriations with “such sums as may be necessary for FY2008 through FY2012”. The bill also provides for the cancellation of loans for public service. The bill amends current law and adds loan cancellation for full-time faculty members at a Tribal College or University, Librarians (if the Librarian has a master’s degree in Librarian Science and is employed in a Title I eligible school under No Child Left Behind), and full-time speech language therapists with master’s degrees who are working exclusively with schools eligible for Title 1 assistance under No Child Left Behind.

The bill also corrects the elimination of the defense of infancy. When Congress eliminated the defense of infancy from being applied to federal Stafford and PLUS loans, this defense was still permitted for Perkins Loans under state law. This is inconsistent and has been corrected so that the ability of institutions of higher education to collect Federal Perkins Loans is not impaired.

Finally, the bill also significantly expands disclosure in the consolidation process regarding loss of benefits. The bill says that the lender will disclose, in a clear and conspicuous manner, to borrowers who consolidate loans that once the borrower adds the borrower's Federal Perkins Loan to a Federal Consolidation Loan, the borrower will lose all interest-free periods that would have been available, such as those periods when no interest accrues on the Federal Perkins Loan while the borrower is enrolled in school at least half-time, during the grace period, and during periods when the borrower's student loan repayments are deferred; that the borrower will no longer be eligible for loan cancellation of Federal Perkins Loans under any provision of section 465.

This section also provides that the lender shall, upon application for a consolidation loan, provide the borrower with information about the possible impact of loan consolidation, including--the total interest to be paid and fees to be paid on the consolidation loan, and the length of repayment for the loan; whether consolidation would result in a loss of loan benefits under FFELP or Direct Lending, including loan forgiveness, cancellation, and deferment; in the case of a borrower that plans to include a Federal Perkins Loan in the consolidation loan, that once the borrower adds the borrower's Federal Perkins Loan to a consolidation loan-- the borrower will lose all interest-free periods that would have been available for the Perkins loan, such as the periods during which no interest accrues on the Federal Perkins Loan while the borrower is enrolled in school at least half-time, the grace period, and the periods during which the borrower's student loan repayments are deferred; and the borrower will no longer be eligible for cancellation of part or all of a Federal Perkins loan; the ability of the borrower to prepay the consolidation loan, pay such loan on a shorter schedule, and to change repayment plans; that borrower benefit programs for a consolidation loan may vary among different lenders; the consequences of default on the consolidation loan; and that by applying for a consolidation loan, the borrower is not obligated to agree to take the consolidation loan.

House Committee Approves Amendment To Fund Perkins FCC
On Wednesday June 13, the House Education and Labor Committee marked up the “College Cost Reduction Act of 2007.” This bill introduced by Chairman George Miller (D-CA), includes a number of provisions that would, according to Miller, “ease the financial burden imposed on students and families by the cost of college, including: tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools; loan forgiveness for college graduates that go into public service professions; and increased federal loan limits so that students won’t have to rely as heavily on costlier private loans.”

During deliberations, the Committee approved by voice vote an amendment offered by Reps. Tim Bishop (D-NY) and Jason Altmire (D-PA) that would fund the Perkins Loan Capitol Contribution for the next five years. The Bishop-Altmire amendment will provide $100 million for the federal capital contribution (FCC) to the Perkins Loan program, allowing more schools to participate in the Perkins Loan program and more students to receive Perkins Loans.

During debate on the bill, several Republican members of the Committee said they supported the Perkins Loan Program but opposed making the FCC an entitlement, where funding automatically will be available for the next five years. However, the voice vote was accepted in the end.

Before the bill becomes law it must go before the full House, and the Senate must also pass it.

Letter to House Appropriators asking for funding for the Perkins Loan Program
Attached please find a letter to House Appropriators asking for funding for the Perkins Loan Program including the Perkins Loan Capital Contribution and reimbursements for cancelled loans. Please help in this effort by faxing this letter to members of the Labor, Health and Human Services and Education Subcommittee by Friday, May 18. This is extremely important in order to support advocates in Congress who are working for Perkins Loan funding! We need to seize the chance to get Perkins Loan funding restored. Click here to view the letter.

COHEAO Submits Proposal to Amend HEA
As the House begins to prepare for the reauthorization of the Higher Education Act, COHEAO has drafted and submitted a proposal on the distribution of collections that the Department makes on defaulted Perkins loans. Click here to view the letter.

Senators and Representatives Deliver Perkins Dear Colleague Letters
Senators Maria Cantwell (D-WA) and Norm Coleman (R-MN) circulated a Dear Colleague letter asking fellow Senators to sign a letter to Chairman Kent Conrad (D-ND) and Ranking Member Judd Gregg (R-NH) of the Senate Budget Committee in opposition to the Bush Administration’s proposal to eliminate the Perkins Loan Program and in support of funding the Federal Capital Contribution and loan cancellations. The letter was delivered Monday and was a big success with 29 Senators signing the bipartisan letter.

In the House. Representatives Tim Bishop (D-NY) and Cathy McMorris Rodgers (R-WA) have also asked their colleagues to sign a letter to Chairman David Obey (D-WI) and Ranking Member Walsh (R-NY) of the House Labor-HHS-Education Appropriations Subcommittee. Mandy COHEAO members assisted in getting signatures for the letter. The letter was signed by 69 House Members. This was a great response given that there has been much confusion in the House over rules for funding requests. Although funding for Perkins Loans is for a program that is allocated according to law, it until this week some House members were under the impression that a request for funding for a program would be characterized as a request for an “earmark” – as if it was for a specific project. Obey clarified this week that a request for program funding is not considered an earmark. The letter was delivered on March 16 to Obey and Walsh. COHEAO members are urged to keep the pressure on their House and Senate members to encourage funding for the Perkins Loan Program.

To view the Senate letter, click here.
To view the House letter, click here.

COHEAO comments on the proposed Military Deferment form
Recently, the Department of Education requested comments on the proposed Military Deferment form for FFEL, Direct Loans and Perkins Loans. COHEAO sent the attached letter.

COHEAO urges Congress to help low income students who depend on the Perkins Student Loan Program
Continuing its efforts to help low and middle-income students afford a college education, in early January COHEAO urged House and Senate appropriators to fully fund the Perkins Loan Federal Capital Contribution. They also urged them to retain the proposed funding for the Loan Cancellation Fund in the FY2008 Labor-HHS-Education Appropriations bill. To view the press release, click here. To view the letter, click here.

Congress Will Reject Call for Elimination of Perkins Loans
The 110th Congress is taking office today. One of its first decisions will be how to finish vital business left over from the previous Congress - including funding of education programs. To view the memo, click here.

Senate Appropriations Committee Funds Cancellations, No FCC
On July 20, the Senate Appropriations Committee marked-up its FY2007 Labor, Health and Human Services and Education appropriations bill. The bill continues the Perkins Loan Program and funds loan cancellations at $65.4 million. Unfortunately, the bill does not fund the Federal Capital Contribution. The bill is not expected to be considered on the Senate floor anytime this summer. The most likely scenario is that it will be debated sometime after the elections in November.

House Appropriations Subcommittee Continues Perkins Loan Program, Funds Loan Cancellations
On June 7, the House Appropriations Subcommittee on Labor, Health and Human Services, and Education (Labor-HHS-Education) marked up their FY2007 appropriations bill. The Subcommittee rejected the President’s proposal to eliminate the Perkins Loan Program and transfer $664 million in Perkins Loan funds during the year to other programs. The bill funds Loan Cancellations at last year’s level – approximately $65.4 million. Unfortunately, the bill again fails to fund the Federal Capital Contribution.

Members: Read the June 20 Torch online.

COHEAO Members: need to pay your conference fees and membership dues? You can now do so online via the EBS COHEAO ePayment Menu.

COHEAO Merchandise is now available for purchase online at The COHEAO Store.

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