The future of the Perkins Loan program has been uncertain since the 2008 reauthorization of the Higher Education Act (HEA), when lawmakers included a September 30, 2014, termination date for the program with an automatic one-year extension to September 20, 2015. This “sunset” provision meant that institutions would no longer be authorized to issue Perkins Loan to new borrowers beginning in the 2016-17 academic year and beyond. Further, institutions would be required to slowly end their Perkins Loan programs and return their federal disbursements from their institutional revolving funds to the U.S. Treasury.
In preparation for the impending termination of the Perkins Loan program, the Department of Education used its limited executive authority to issue guidance which authorized institutions to continue lending to existing Perkins Loans borrowers. According to the guidance, existing borrowers who met certain conditions would be eligible to continue receiving Perkins Loan disbursements until graduation. However, the grandfathering provisions only covered students already receiving loans—no new loans could be disbursed to new borrowers should the sunset date be breached.
Because Congress did not act before the September 30, 2015, sunset date, the Perkins Loan program officially expired. As a result, the incoming freshman class for the 2016-17 academic year would be the first since the 1959-60 class without a Perkins Loan program to help finance the pursuit of a college degree.
However, Perkins Loan advocates on Capitol Hill did not allow the program to die quietly. In fact, due to a well-coordinated and inclusive campaign to save the Perkins Loan program, lawmakers on Capitol Hill have since passed a law that revises the Perkins Loan program for two additional academic years. The details of that package are outlined below.