March 30, 2006

The House this afternoon passed H.R. 609, the complete Higher Education Act reauthorization bill, by a vote of 221-199. This legislation includes a reauthorization of the Perkins Loan Program, an increase in Perkins Loan limits and other changes to the program. It does not fund the federal capital contribution or loan cancellations; that is done through the separate appropriations process.

The Senate now would be next to take up the legislation, although when it will act is not known at this time. The Senate’s HEA reauthorization bill, S. 1614, also reauthorizes the Perkins Loan program and increases loan limits. The entire reauthorization bill actually passed the Senate as part of the Deficit Reduction Act, which was signed into law in February, but most of the legislation was taken out in conference for procedural reasons.

House passage means that both the full House and Senate have said they support the continuation of the Perkins Loan Program, a very positive development for the program, given the fact that the President’s budget called for its elimination. During the debate on H.R. 609 yesterday and today, a number of Representatives, Republicans and Democrats, spoke strongly in support of the Perkins Loan Program. The new chairman of the Subcommittee on 21st Century Competitiveness, Rep. Ric Keller (R-FL) and Education and Workforce Committee Chairman Buck McKeon (R-CA) were especially supportive of Perkins.

The bill passed generally on a partisan basis, with all but 18 Republicans who voted supporting passage and all but 14 Democrats who voted opposing it. The Democrats said their opposition was based on what they consider to be inadequate funding overall for student financial assistance, concern about increased fraud, and concern about federal interference in campus procedures; several Democrats who opposed the bill overall indicated support for Perkins.

The continued grassroots work of COHEAO and our allies in the higher education community in support of Perkins is paying off.

One significant change affecting the Perkins Loan Program was made to H.R. 609 this week before it was brought up in the House: the proposed change in the allocation formula for federal funding of the three campus-based programs was dropped by Chairman McKeon, leaving the current “hold harmless” provision in place.

Perkins changes included in the bill are:

• The program is reauthorized through 2012.
• Perkins Loan annual borrowing limits are increased to $5,500 for undergraduates and to $8,000 for graduate students with cumulative limits increased correspondingly.
• Loan forgiveness for people serving in the military is raised to 100%, the level of forgiveness for other covered professions.
• Loan rehabilitation is allowed after nine on-time payments.
• Requests for forbearance are no longer required to be in writing. The three-year forbearance limit is retained.
• The allocation formulas for campus-based programs – Perkins, SEOG and Work study -- are not changed.
• H.R. 609 increases the Books and Supplies allowance increases to $600.
• The “defense of infancy” to avoid responsibility for repaying a Perkins Loan is prohibited, a change conforming Perkins to Stafford and PLUS loans.
• Compromise repayments on defaulted loans are permitted, subject to the Department of Education’s approval.

Andrew Stringer
Legislative Associate
Washington Partners, LLC
(P) 202-289-3903
(F) 202-371-0197
astringer@wpllc.net