(December 2009) Legislation making major changes to the Perkins Loan Program, including creating a new Direct Perkins Program and eliminating the current program, will likely not take effect until July 1, 2011, according to a statement made by Acting Assistant Secretary of Education Dan Madzelan at the ED Office of Federal Student Aid Conference in Nashville this week. It is up to Congress to decide whether or not to approve a change to Perkins and to set the date the change takes effect, a fact Madzelan noted, but he indicated near certainty that there would be a delay.

Reports from multiple sources have indicated that the Department wants to concentrate all its resources on preparing to convert all 4,000 remaining FFELP schools to Direct Lending rather than at the same time preparing for the substantial logistical problems involved in creating a new Perkins Program while preparing for the end of the old one.

The Department reported that 5,300 people attended the meeting representing 2,100 schools. Sessions were full to overflowing as financial aid administrators and others tried to learn as much as possible about the major changes in aid programs being contemplated by Congress. The session was themed almost entirely on converting schools from FFELP to Direct Lending, although Department officials were careful to say that they understand that Congress hasn't actually passed legislation requiring such a conversion.

Among the bits of news coming out of the conference:

• The Department on Monday will release three-year cohort default rates to schools, releasing them publicly next Monday.
• The Department remains confident that they are prepared to convert all FFELP schools to Direct Lending by July 1, 2010.
• The Department is working to determine what the role will be for guaranty agencies in providing financial literacy, default aversion, and outreach services if the SAFRA legislation passes.
• 2017 schools have originated loans under the Direct Loan Program, while 4003 are still participating in the FFEL. (Many additional schools have signed up for DL just in case.)

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