(February, 2009). President Obama released an outline of a budget that includes mention of the Perkins Loan Program. The budget outline says: “The Budget also makes campus-based, low-interest loans more widely available through a new modernized Perkins Loan program, overhauling the inefficient and inequitable current Perkins program.”

We understand that the Department of Education wishes to create a nationwide alternative loan program that can also provide short-term funding. This would likely eliminate the current allocation formula for the distribution of the Federal Capital Contribution – which hasn’t mattered in recent years since there hasn’t been a contribution -- and expand the program to more campuses. It could also mean some additional major changes to program’s terms and conditions. It must be emphasized that any changes to the law must be made by Congress, subject to approval by the President. We expect the Administration and Congress will work closely together, but it will be up to Congress to actually change the Higher Education Act.

The budget proposal that was released today is the outline of the full budget proposal that is expected about the first of April. At that time, additional details and cost estimates will be forthcoming. For now, COHEAO is working to determine the Department of Education’s intentions and has offered to work with the Department as this proposal is developed further. We will keep you informed as more information is forthcoming.

Click HERE to see a summary from the Department of Education on Perkins in the FY2010 Budget.

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