More than 2,400 Northwestern students would lose their federal Perkins loans if Congress passes President Bush’s 2006 budget proposal. But Northwestern officials said the school’s financial aid base is strong enough to make up for the cuts.
Bush’s proposal eliminates the Perkins Loan Program while increasing funding for the federal Pell Grant Program.
More than 30 percent of NU’s undergraduate students received Perkins loans for the 2003-04 academic year and 897 students received Pell grants, according to Rebecca Dixon, associate provost for university enrollment.
Dixon noted in an e-mail to The Daily that the number of students receiving Perkins loans has increased in the past 10 years while the number of students receiving Pell grants has decreased. Last year, about 1,000 more Perkins loans were awarded to NU students than Pell grants.
“Pell grants go to the neediest students,” Dixon said. “(NU) doesn’t have the neediest students as opposed to other universities.”
She estimated NU would lose about $200,000 in federal aid but its $10 million financial aid fund is large enough to compensate for the cut.
Under Bush’s proposal, the maximum Pell grant award is set to reach $4,550 in 2010.
According to Harrison Wadsworth, executive director of the Coalition of Higher Education Assistance Organizations, if Bush phases out Perkins loans, students will be forced to take out other loans from banks and credit unions — agencies that require good credit history.
“To receive federal loans (such as Perkins loans) all you have to do is be a student and have need,” he said, adding that the loan program has been underfunded for years.
Bush and U.S. Department of Education officials said funding is better spent towards the Pell grant program because Perkins loans only benefit 3 percent of the nation’s student population and the number of participating universities decreased from 3,338 in 1983 to 1,796 in 2003.
All eligible students are guaranteed to receive Pell grants, but students only can receive Perkins loans if their university participates in the program.
“We just feel (funding) is better served in Pell grants, which don’t have to be repaid and (which) serve all eligible students,” said Jane Glickman, spokeswoman for the U.S. Department of Education. “Why should a student be punished if their institution doesn’t participate in the program?”
Unlike Pell grants, Perkins loans must be paid back to the university, which acts as the lender. The loan pool — or revolving fund — is composed of university money, federal contributions and student repayment of loans.
To compensate for the elimination of Perkins loans, Bush is proposing to increase the maximum Stafford loan limit from $2,625 to $3,500 for first-year students and from $3,500 to $4,500 for second-year students. Students can receive Stafford loans regardless of what school they attend.
But some education advocates argue that increasing the Stafford loan limits will not cover the cuts in Perkins loans.
According to the U.S. Department of Education, 567,000 students received Perkins loans and 13.4 million students received Stafford loans in the 2004-05 school year.
James Boyle, president of College Parents of America said increased funding for Pell grants is an appropriate plan because grants do not have to be paid back.
“In today’s budget environment, there are limited dollars available for higher education,” Boyle said.
Perkins loan recipients at NU said they just hope the school will keep its commitment to meet students’ full financial need.
“I’d be more worried about public school kids than private school kids,” said Kendahl Moser-Bleil, a Weinberg junior, “because we have a larger endowment.”
Reach Helena Oh at [email protected]
