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Perkins Loan Retirement Extended Throughout 2016-17 School Year

Boston College undergraduate students who have demonstrated financial need can still borrow a federal Perkins Loan to help finance next year’s tuition. Congress has recently extended the Perkins Program, but the loan’s expiration date is still upcoming. Under current circumstances, students cannot receive further disbursements after Sept. 30, 2017.

When the Perkins Loan was retired last year, 710 BC students with high financial need were left to grapple with an impending financial aid gap that threatened their ability to pay next year’s tuition. Under the loan’s retirement conditions, students who had a Perkins Loan disbursed before or during the 2014-2015 school year were eligible to receive the loan until they completed their program, as long as they did not change majors and still met the financial need requirements.

Congress enacted the Perkins Loan Extension Act on Dec. 18, 2015. The Act makes it possible for undergraduate students to receive aid until the extended 2017 deadline, but includes a new stipulation. Any student who borrows the loan must exhaust all of his subsidized and unsubsidized Stafford Loan eligibility for that year before being awarded a Perkins Loan.

“The recent Perkins legislative activity has been confusing. The Department of Education has yet to issue any guidance to schools as to how to implement the new law.”

-Director of Financial Aid Mary McGranahan

There are more loan forgiveness options available for Perkins borrowers than for borrowers of any other federal loan. The Perkins Loan also has a fixed interest rate, while Stafford interest rates are variable.

The Extension Act adds several stipulations that apply specifically to graduate students. Under the new rules, graduate students will stop receiving Perkins funds a year before undergraduates. They can receive additional Perkins disbursements until Sept. 30, 2016, but only if they received their first Perkins disbursement from their current school before Oct. 1, 2015.

When the loan was retired last year, students were confused. Several members of the class of 2019 who were eligible for the Perkins Loan this year did not receive their intended disbursements because they failed to submit their paperwork by the Oct. 1 deadline.

“[The termination of the loan will be] absolutely problematic for me,” Montserrat student Jenna Bilak, MCAS ’19, said. “I would initially learn to deal with a very stressful situation, have little to no pocket money or assistance to pay for things other than my tuition … If I failed to pay this tuition, my account would be on hold and I would lose access to things like my meal plan, library access, and many other things on campus.”

Another Montserrat student, Jesse Rascon, MCAS ’19, who grew up in a single-parent household, said that the loan’s discontinuation would cause great financial strain on his family and be detrimental to his future.

“The recent Perkins legislative activity has been confusing,” Director of Financial Aid Mary McGranahan said on the scarcity of information about the loan. “The Department of Education has yet to issue any guidance to schools as to how to implement the new law.”

McGranahan said that it will be difficult for the Office of Student Services to predict exactly what the extension will mean for BC students until the Department of Education issues guidance.

Associate Director of Student Services Kathleen Rosa was advocated for the loan after it was retired last year.

“I think the fact that it’s still in existence is a positive,” she said. “At least it lays the groundwork to continue lobbying for its existence. Is this the best? I think that this is a step.”

Rosa also acknowledged that the Perkins Extension Act does not specify how the financial aid office should respond in certain situations.

“If a student turns down their Stafford, can they get their Perkins?” Rosa said.

Student Services is still awaiting specific instructions from the U.S. government before they will have the answers to questions like this.

Featured Image by Tatiana Petrovick / Heights Archive

February 7, 2016