Higher education groups have warned that students currently receiving Federal Perkins Loans could see them cut next year under a new budget submitted by President George W. Bush.
On Feb. 7, Bush released his 2006 budget, recommending the elimination of the program that provides low-interest loans to needy students.
The funds from the program would be used to increase the maximum Pell Grant awards by $100 per year over the next five years. The grants, which do not have to be repaid, are awarded to undergraduate students who exhibit financial need.
“The budget achieves $34 billion in savings over 10 years by reducing unnecessary subsidies and payments to lenders, guarantee agencies and loan consolidators,” the presidential budget states. “These savings will be used to increase the Pell Grant maximum award, pay off the current $4.3 billion Pell shortfall and improve benefits to students in school by increasing loan limits for first-year students and extending the current favorable interest rate framework.”
Currently, almost 3,000 students at UCSD qualify for Perkins Loans, and receive more than $5.9 million, according to University Outreach Communications Director Pat JaCoby. These students include undergraduates as well as graduate and professional students who are generally ineligible for Pell Grants.
Several educational groups have said that Perkins Loans are important to ensure that higher education is accessible to students with financial need. The American Council on Education, the Association of American Universities and other national organizations said that the budget sends a mixed message to college students.
“We are heartened that the president has made increased Pell Grants and enhanced student loans such a prominent part of his 2006 budget,” the groups stated in a joint letter. “At the same time, we are disappointed with other proposals in the president’s budget that would eliminate long-standing, successful programs that have done a great deal to help students and families.”
In addition, student organizations like the U.S. Student Association said they oppose cuts in the presidential proposal.
“While increasing the maximum Pell Grant award is an important part of college affordability, the current proposal is misleading,” USSA President Ajita Talwalker stated. “A modest increase to the Pell Grant, while simultaneously attacking the other parts of a student’s aid package that are necessary for a student to go to school, is not educational access.”
The Department of Education, however, stated that many of the programs eliminated were cut due to redundancy and inefficiency.
“The president’s budget is a common-sense approach that would improve the effectiveness of the student aid programs while reducing program costs and subsidies to private lenders,” the department stated in a press release. “The savings generated from the student aid reforms would result in a $19 billion investment in the Pell Grant program over the next 10 years, including the funds needed to provide a $500 increase in the maximum award over the next five years.”
Overall, Bush’s proposed budget reduces education spending by half a billion dollars. The White House press office did not return calls seeking comment.
