News Release

Spratt Opening Statement at Hearing on the Importance of Perkins Loans

September 22, 2010

I am pleased that today we have an opportunity to discuss the important issue of college affordability and, specifically, the Perkins loan program and the valuable assistance it provides in helping low-income students pay for college. Especially now, when the economy is still reeling, it makes a world of difference to have a college degree. Tuesday’s New York Times had an article with statistics confirming the economic value of a college education: Americans with a bachelor’s degree earn on average almost 60 percent more than those with only a high school degree, and the difference is even greater for those age 25 to 34. Americans with a college degree are also far less likely to be unemployed; the 4.7 percent unemployment rate for college graduates in 2009 was less than half the 9.7 percent unemployment rate for high school graduates. In fact, over the last twenty years, all of the increase in U.S. employment has been among people with a college degree or at least some college classes. By contrast, employment for those with only a high school degree has actually dropped a bit over time. Today’s hearing will help us understand the fundamental picture: the Perkins loan program improves access to college for hundreds of thousands of students, and it supports thousands of jobs, as well. That’s why I’m determined to keep the Perkins loan program strong – helping students and supporting jobs – and why Congress needs to take action.

The Perkins loans program is an important, campus-based loan program that has been around since its inception in 1958 as the National Defense Student Loan program. Today, more than 1,700 colleges offer these low-interest Perkins loans to their neediest students, loans that often make the difference between those students being able to afford college, or not.

And Perkins loans aren’t just vital to students; the Perkins loan program provides vital employment for thousands of people across the country, both at colleges and at the private loan servicing companies that some colleges use to administer their Perkins loans. These experts work with the students so they know all the details of their Perkins loan, and help ensure that upon graduation they know their options for repayment or loan forgiveness if they enter certain public service jobs. In Rock Hill, South Carolina, in my home district, we have two companies who together employ several hundred people working on Perkins loans. We will hear testimony today from Bob Perrin, the President of Williams and Fudge, and in the audience I see other South Carolinians including Niel Welborn, Hal Todd, and Gina Santoro from Todd, Bremer & Lawson – both local companies that provide the human touch that contributes to making the Perkins loan program successful.

Although Congress has provided no Perkins loan capital contributions since 2004 and no funds for loan forgiveness since 2009, participating colleges are still disbursing new Perkins loans from their revolving funds. The revolving funds contain prior federal contributions, the college’s matching funds, and loan repayments from graduates. But starting in October 2012, colleges will cease making new Perkins loans with the income from loan repayments, and instead send the funds back to the federal government; current law schedules all prior federal capital contributions to be recalled to the Treasury, spelling an end to the Perkins loan program. Congress therefore needs to address Perkins loan legislation, or this program will wither on the vine in 2012.

Given this need for action, I am interested in working with my colleagues, the Administration, and the higher education community to find a cost-effective solution that keeps the Perkins loan program viable. Our colleague, Rep. Bishop, has joined me in introducing HR 5448, the Perkins Loan Extension Act. This bipartisan bill – cosponsored also by Education and Labor Committee Chairman George Miller – would extend the recall date by one year to provide the time to craft a comprehensive approach to keep Perkins loans flowing. In addition, later today I will be sending a letter to Education Secretary Arne Duncan urging the Administration to work with Congress on legislation to extend Perkins loans. I think it is imperative that we ensure that students continue to have access to these low-cost Perkins loans, and that jobs associated with Perkins loans don’t disappear when we can least afford to lose them. I ask unanimous consent to include the letter to the Secretary in the hearing record.

Today we will hear from three witnesses, each of whom can talk about Perkins loans from a different perspective. As I mentioned earlier, Bob Perrin from Rock Hill is both President of Williams and Fudge, and the elected President of the Coalition of Higher Education Assistance Organizations, a group of 300 educational and commercial members that advocates for Perkins and other campus-based aid programs. We also have Sarah Bauder, Assistant Vice President for Enrollment Services and Financial Aid at the University of Maryland in College Park. And finally, we have Joseph Hill, a Georgetown University senior from Philadelphia, who will talk about the important role his Perkins loans played in his attendance and upcoming graduation from college.