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Campus-Based Student Financial Aid
Programs Under the Higher Education Act
Alexandra Hegji
Analyst in Social Policy
David P. Smole
Specialist in Education Policy
January 9, 20125, 2015
Congressional Research Service
7-5700
www.crs.gov
RL31618
CRS Report for Congress
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Campus-Based Student Financial Aid Programs Under the Higher Education Act
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Summary
Three Higher Education Act (HEA) student financial aid programs—the Federal Supplemental
Educational Opportunity Grant (FSEOG) program, the Federal Work-Study (FWS) program, and
the Federal Perkins Loan program—collectively are referred to as the campus-based programs.
The campus-based programs were reauthorized under the Higher Education Opportunity Act
(HEOA; P.L. 110-315), which amended and extended authorization for programs funded under
the HEA. The campus-based programs are currently authorized to be funded through FY2014’ authorization, along with many other provisions under the
HEA, expired at the end of FY2014. However, section 422 of the General Education Provisions
Act (GEPA) automatically extended the programs’ authorization through FY2015.
Under the campus-based programs, federal funding is provided to institutions of higher education
for the provision of need-based financial aid to students. Institutions participating in the programs
are required to provide a match ofmatching funds equal to approximately one-third of the federal funds they
receive. The
campus-based programs are unique among the need-based federal student aid
programs in that the
mix and amount of aid awarded to students are determined by each
institution’s financial aid
administrator according to institution-specific award criteria (which
must be consistent with
federal program requirements), rather than according to non-discretionary nondiscretionary
award criteria, such as
those applicable for Pell Grants and subsidizedSubsidized Stafford Loans.
Each program provides students with a distinct type of aid. The FSEOG program provides grant
aid only to undergraduate students. The FWS program provides undergraduate, graduate, and
professional students the opportunity for paid employment in a field related to their course of
study or in community service. The Perkins Loan program provides low-interest loans with
favorable terms and conditions to undergraduate, graduate, and professional students.
Funding is provided to institutions separately for each program according to formulas that take
into account both the allocation institutions received in years pastpast years (their base guarantee) and their
proportionate share of eligible students’ need that is in excess of their base guarantee (their fair
share increase). From these funds, institutions’ financial aid administrators award aid to eligible
students who have financial need.
The programs are among the oldest of the federal postsecondary aid programs; however, they
now operate amidst a host of other aid programs and tax benefits, some of which are not needbased. At present, a relatively small proportion of all students receive campus-based financial aid.
This report describes the FSEOG, FWS, and Federal Perkins Loan programs, as amended by the
HEOA. It also presents historical information on appropriations provided for the programs and
the federal student aid that has been made available to students through the programs. It will be
updated to reflect legislative action in the 112th Congress.
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Contents
Introduction...................................................................................................................................... 1
Program Descriptions ...................................................................................................................... 1
Federal Supplemental Educational Opportunity Grants ............................................................ 2
Allocation of Funds to Institutions ...................................................................................... 3
Federal Work-Study Programs................................................................................................... 4
FWS Employment ............................................................................................................... 5
Job Location and Development Programs........................................................................... 8
Work Colleges ..................................................................................................................... 8
Allocation of Funds to Institutions ...................................................................................... 9
Federal Perkins Loans ............................................................................................................. 10
Award Procedures and Terms of Perkins Loans ................................................................ 10
Allocation of Funds to Institutions .................................................................................... 1415
Transfer of Funds Between Campus-Based Programs ............................................................ 16
Administrative Costs ............................................................................................................... 1617
Funding and ProgramParticipation Data ............................................................................................................ 17
Funding for the Campus-Based Programs ............................................................................... 1718
Institutional Participation ........................................................................................................ 1819
Students Served and Average Aid Amounts ............................................................................ 1920
FSEOG .............................................................................................................................. 1920
FWS................................................................................................................................... 2021
Perkins Loans .................................................................................................................... 2122
Figures
Figure 1. Institutions Participating in the Campus-Based Programs ............................................. 19
Figure 2. FSEOG: Number of Students Receiving Awards and Average Award Amounts ............ 20
Figure 3. FWS: Number of Students Receiving Awards and Average Award Amounts ................ 21
Figure 4. Perkins Loans: Number of Students Receiving Awards and
Average Award
Amounts.......................... Amounts ............................................................................................................ 2223
Tables
Table 1. FWS Requirements for Federal Share of Compensation ................................................... 7
Table 2. Perkins Loan Cancellation Rates by Type of Service ...................................................... 13
Table 3. Administrative Cost Allowances for the Campus-Based Programs ................................ 17
Table 4. Campus-Based Program Funding: Appropriations for FY2002-FY2012FY2005-FY2015 ....................... 1718
Table 5. Perkins Loan Cohort Default Rates ................................................................................. 23
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Contacts
Author Contact Information........................................................................................................... 2324
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Introduction
Three postsecondary student financial aid programs authorized under the Higher Education Act of
1965 (HEA) are collectively referred to as the campus-based programs—the Federal
Supplemental Educational Opportunity Grant (FSEOG) program, the Federal Work-Study (FWS)
program, and the Federal Perkins Loan program. The campus-based programs are unique among
the need-based federal student aid programs in that federal funds are awarded to institutions of
higher education (IHEs) according to formulas that take into account past institutional awards and
the aggregate financial need of students attending the institutions. The mix and amount of aid
students receive under the programs isare determined by each institution’s financial aid administrator
administrator according to institution-specific award criteria, rather than according to non-discretionary award
nondiscretionary award criteria, such as that applicable for Pell Grants and subsidizedSubsidized Stafford
Loans.1
The campus-based programs were most recently amended and extended under the Higher
Education Opportunity Act (HEOA; P.L. 110-315), which reauthorized the programs that are part
of the HEA.2 Authorization for the appropriation of funds for the campus-based programs was
extended through FY2014.3 Several changes were made to the Federal Perkins Loan program,
including including
increases to loan limits and an expansion of loan cancellation benefits. Minor changes
were made to the FSEOG and FWS programs.
to the FSEOG and FWS programs. Authorization for the appropriation of funds for the campusbased programs expired at the end of FY2014 and was automatically extended through the end of
FY2015 under section 422 of the General Education Provisions Act (GEPA). 3
This report begins by providing a brief description of each of the campus-based programs,
including the terms under which such financial aid is awarded to students and the procedures under
under which federal funds are allocated to institutions for that purpose.4 It then provides historical
information on federal funds appropriated for each of the programs, an analysis of the number
and types of students served, and selected program statistics.
Program Descriptions
This part of the report provides a description of each of the three HEA campus-based financial aid
programs—the FSEOG program, the FWS program, and the Federal Perkins Loan program.
Program descriptions explain the purpose of each program and the terms under which aid is
provided to students. They also include a brief explanation of how federal funds are allocated to
institutions for the purpose of providing aid to students.
1
Institutions are required to establish written procedures for selecting recipients of campus-based financial aid. These
selection procedures must meet the requirements of each campus-based program, and must be kept on file at each
institution. Consistent with the availability of funds, institutions must make campus-based aid reasonably available to
all eligible students demonstrating financial need.
2
For additional information on the HEOA and the reauthorization of the HEA, including amendments to the campusbased programs, see CRS Report RL34654, The Higher Education Opportunity Act: Reauthorization of the Higher
Education Act, by David P. Smole et al.
3
Authorization of appropriations is automatically extended for an additional fiscal year according to § 422(a) of the
General Education Provisions Act (GEPA). Thus, authorization of the programs would be provided through FY2015.
For additional information on GEPA, see CRS Report R41119, General Education Provisions Act (GEPA): Overview
and Issues, by Rebecca R. Skinner and Jody Feder.
4
The allocation procedures for each of the three campus-based programs are described in greater detail in CRS Report
RL32775, The Campus-Based Financial Aid Programs: A Review and Analysis of the Allocation of Funds to
Institutions and the Distribution of Aid to Students, by David P. Smole.
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Federal Supplemental Educational Opportunity Grants
The FSEOG program authorizes the Secretary to grant funds to institutions of higher educationof Education (the Secretary) to grant funds to IHEs
for the purpose of providing financial assistance to undergraduate students with exceptional
financial need to aid them in obtaining the benefits of postsecondary education. The FSEOG
program is authorized by Title IV, Part A, Subpart 3 of the HEA. It first was incorporated into the
HEA under the Education Amendments of 1972 (P.L. 92-318). Prior to authorization of the
FSEOG program, Education Opportunity Grants, authorized under the HEA of 1965 (P.L. 89329), served a similar purpose.
From the funds allotted to them by the Secretary, institutions award FSEOG aid to eligible
students as part of their financial aid packages. Institutions are required to award FSEOG aid first
to students with exceptional financial need, as determined according to the HEA need analysis
provisions,5 with priority going to students receiving Pell Grants. Institutions may establish
categories of students for purposes of packaging FSEOG awards. For example, “categories may
be based on class standing, enrollment status, program, date of application, or a combination of
factors.”6 Categorization of awards may not be used to arbitrarily deny FSEOG aid to students,
for example by establishing a policy of awarding aid on a first-come, first-served basis.
FSEOG aid consists of a federal share, not to exceed 75% (except if the Secretary determines that
a larger share is necessary to further the purpose of the program), and a non-federalnonfederal share of at
least 25%.7 The nonfederal The non-federal share is required to be funded through the institution’s resources, such
as institutional grants and scholarships, tuition or fee waivers, state scholarships, and foundation
or other charitable organization funds. EDThe Department of Education (ED) has determined that all
state scholarships and grants
can be counted toward meeting the non-federalnonfederal share, except for funds provided under the
Leveraging Educational Assistance Partnership (LEAP) and the Special Leveraging Educational
Assistance Partnership (SLEAP) programs.7 (Under the HEOA, the SLEAP program was repealed
and replaced with the
funds provided under the Grants for Access and Persistence (GAP) program.)8
Unlike the other two campus-based programs, students are eligible to receive FSEOG aid only
during the period required to complete a first undergraduate baccalaureate course of study. The
maximum FSEOG award amount per academic year is the lesser of the student’s financial need or
$4,000. In the case of a student studying abroad, and if the cost of studying abroad exceeds the
cost of studying at the student’s home institution, the FSEOG award may be increased to a
maximum of $4,400. The minimum value of an FSEOG award is $100 per year. For students
enrolled for less than a full academic year, the value of FSEOG awards must be proportionately
reduced. Institutions are required to award a “reasonable proportion” of FSEOG aid to
5
Per HEA Title IV, Subpart F—Need Analysis, a student’s financial need is calculated as the cost of attendance, minus
the expected family contribution (EFC)—the amount that a student’s family is expected to contribute toward the
student’s education, and minus the estimated financial assistance (EFA) not received under HEA Title IV (this includes
scholarships, grants, loans, veterans’ education benefits (Section 480(c)), national service educational awards, and postservice benefits under Title I of the National and Community Service Act of 1990.
6
U.S. Department of Education, 2011-20122014-2015 Federal Student Aid Handbook, vol. 3—Calculating Awards & ackaging,
pp. 3-124 through 3-125, at http://ifap.ed.gov/ifap/byAwardYear.jsp?type=fsahandbook&awardyear=2011-2012.
(Hereafter cited as ED, 2011-2012 FSA Handbook.)
7
U.S. Department of Education, 2010-2011 Federal Student Aid Handbook,, vol. 6—Campus-Based Programs, pp. 612, at http://ifap.ed.gov/ifap/byAwardYear.jsp?type=fsahandbook&awardyear=2010-2011. (Hereafter cited as ED,
2010-2011 FSA Handbook.)
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independent students8 and to those who are enrolled less than full-time if the institution’s
allocation of FSEOG funds was based in part on the financial need of such students. (Students
enrolled less than half-time are eligible for aid under each of the campus-based programs.)
Students do not repay FSEOG awards.Packaging,
pp. 3-131, at http://ifap.ed.gov/fsahandbook/1415FSAHandbookCompleteActiveIndex.html (Hereafter cited as ED,
2014-20145FSA Handbook).
7
Institutions designated as eligible under the Strengthening Institutions Program (HEA §311), Developing Hispanic
Serving Institutions Program (HEA §501), Strengthening American Indian Tribally-Controlled Colleges and
Universities Program, Strengthening (HEA §316), Strengthening Alaska Native and Native Hawaiian-Serving
Institutions Program (HEA §317), Strengthening Historically Black Colleges and Universities Program (HEA §323), or
the Strengthening Historically Black Graduate Institutions Program (HEA §326) are exempt from the matching
requirement. Institutions must reapply for the exemption annually; 2014-2015 FSA Handbook, vol. 6—The CampusBased Programs, p. 6-17.
8
ED, 2014-2015 FSA Handbook, vol. 6—The Campus-Based Programs, pp. 6-20 through 6-21. The GAP programs is
not funded for FY2014-2015, therefore, the full amount (100%) of state scholarships and grants that an FSEOG eligible
student receives from a state can be used to meet the nonfederal requirement for 2014-2015.
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maximum of $4,400. The minimum value of an FSEOG award is $100 per year. For students
enrolled for less than a full academic year, the value of FSEOG awards must be proportionately
reduced. Institutions are required to award a “reasonable proportion” of FSEOG aid to
independent students9 and to those who are enrolled less than full-time, if the institution’s
allocation of FSEOG funds was based in part on the financial need of such students.10 Students do
not repay FSEOG awards.11
Allocation of Funds to Institutions
The federal share of FSEOG funds are allocated to IHEs according to procedures prescribed in
the authorizing statute. Institutions first are allocated fundsFunds are first allocated to institutions in proportion to the amount they
received in previous years, with priority going to institutions that participated in the program in
FY1999 or earlier. Next, funds are allocated to those institutions that began participating after
FY1999, but which are not first- or second-time participants. Following this, funds are allocated
to institutions that are first- or second-year participants.12
Provided that sufficient funds are appropriated, institutions that participated in the FSEOG
program in FY1999 or earlier receive 100% of their FY1999 allocation. This is referred to as their
base guarantee. Institutions that began participating after FY1999, but whichthat are not first- or
second-time participants receive a base guarantee that is the greatest of 90% of the amount they
received in their second year of participation, or $5,000. Institutions participating in the FSEOG
program for their first or second year receive as their base guarantee, the greatest of $5,000, 90%
of an amount proportional to that received by comparable institutions, or 90% of what the
institution received in its first year of participation. However, if an institution began participating
in FSEOG after FY1999 and received a larger allocation in its second year of participation than in
its first, it is allocated 90% of the amount it received in its second year of participation.
Institutions’ base guarantees are adjusted to be proportional to the ratio of total funds available for
the FSEOG program to the national total of institutions’ base guarantees. This amount is called an
institution’s adjusted base guarantee.913
After allocating institutions their adjusted base guarantee, any remaining FSEOG funds are
allocated to institutions proportionately according to their eligible amount of need that is in
excess ofgreater
than their adjusted base guarantee. An institution’s eligible amount of need, or fair share, is
calculated by subtracting the sum of aid provided under the Pell Grant, Academic
Competitiveness Grant (ACG), National Science and Mathematics Access to Retain Talent
(SMART) Grant, and LEAP/SLEAP programs from the Leveraging Educational Assistance Partnership (LEAP) program14 from
the aggregate financial need of the
institution’s undergraduate students. Undergraduate student
financial need is determined through
a formula that takes into account the cost of attendance
(COA) at the institution and the expected
family contribution (EFC) of a representative sample of
students.1015 Institutions with a fair share
amount of need that is greater than their FSEOG adjusted base guarantee are considered to have
an excess eligible amount of need. These institutions receive an allocation in excess of their base
8
An independent student is one who is not considered dependent upon his parents’ income for financial aid purposes.
9
An independent student is one who is not considered dependent upon his parents’ income for financial aid purposes.
Students enrolled less than half-time are eligible for aid under each of the campus-based programs.
11
HEA, §§413A-413C (20 U.S.C. §S 1070b through 1070b-2).
12
HEA, §413D (20 U.S.C. §1070b-3).
13
In instances where total funds available is greater than or equal to the national total of base guarantees, then the base
guarantee and the adjusted base guarantee would be equal.
1014
The ACG, SMART Grant, and LEAP programs have not been funded in several years.
15
ED has calculated a table of EFCs used in the campus-based funding process. The table includes average EFCs
within 14 income bands for dependent and independent undergraduates, and for graduate and first-professional
students. The EFC for students is based on information from the second preceding fiscal year. EFCs from this table,
rather than the actual EFCs of students at a particular institution, are entered into the allocation formula. The table of
EFCs for the 2011-2012 award year is available from ED http://www.ifap.ed.gov/eannouncements/attachments/
012511AttachStandard20112012EFCs.pdf.
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base guarantee are considered to have an excess eligible amount of need. These institutions
receive an allocation greater than of their base guarantee, which is called their fair share increase.
Institutions’ total allotments are the sum of
their adjusted base guarantee and their total fair share
increase.1116
Other FSEOG Funding Provisions
Institutions are provided flexibility to carryover up to 10% of their allocation for use in a
succeeding fiscal year to carry out the FSEOG program. They also may carry-back funds to make
grants to students prior to the beginning of the fiscal year, but after the end of the prior academic
year. The Secretary is authorized to reallocate any excess funds returned by institutions. An
institution returning more than 10% of its allocation will have its next year’s allocation reduced
by the amount returned, unless the Secretary determines it would be contrary to the interest of the
program. Finally, the Secretary is authorized under FSEOG to allocate up to 10% of funds
appropriated in
excess of $700 million for the programs authorized under HEA Title IV, Part A,12
17 to institutions from which
50% or more of Pell Grant recipients either graduate or transfer to fouryearfour-year institutions.
Federal Work-Study Programs13Programs18
The purpose of FWSFederal Work Student programs (FWS) is to provide part-time employment to
undergraduate, graduate, and
professional students in need of earnings to pursue their course of study;
study and to encourage student
participation in community service activities. FWS programs are
authorized under the HEA at
Title IV, Part C. They first were authorized under the Economic
Opportunity Act of 1964 (P.L. 8845288-452) and administered by the U.S. Department of Labor’s
Office of Economic Opportunity. In
1968, under P.L. 90-575, authority for the Work-Study Programs FWS programs
was transferred to Title IV of the
HEA.
An institution’s financial aid administrator is responsible for awarding FWS aid to eligible
students. Unlike the FSEOG and Perkins Loan programs in which aid is required to be awarded
first to students with exceptional financial need, FWS aid may be provided to any student
demonstrating financial need. Awards typically are based on factors such as each student’s
financial need, the availability of FWS funds, and whether a student requests FWS employment
and is willing to work.14 Students receive their award as compensation for the hours they have
worked. Earnings from FWS employment are considered “excludable income” in determining a
student’s financial need for the subsequent year. Awards are based on a combination of factors
11
(...continued)
within 14 income bands for dependent and independent undergraduates, and for graduate and first-professional
students. The EFC for students is based on information from the second preceding fiscal year. EFCs from this table,
rather than the actual EFCs of students at a particular institution, are entered into the allocation formula. See ED, EFC
Procedures 2014-2015, at http://ifap.ed.gov/eannouncements/attachments/
010614Tentative1415FundLevelsForCampusBasedProgsEFCProceduresAttach.pdf.
16
Institutions may receive both an initial fair share increase and an additional fair share increase, the latter being based
based on the
reallocation of excess funds returned by other institutions (described in the next section).
1217
HEA Title IV, Part A—Grants to Students in Attendance at Institutions of Higher Education, includes the following
programs: Pell Grants, the TRIO programs, GEAR-UP, Academic Achievement Incentive Scholarships, FSEOG,
LEAP, Migrant and Seasonal Farmworker Programs, the Robert C. Byrd Honors Scholarship Program, Child Care
Access Means Parents in School, Learning Anytime Anywhere Partnerships, and TEACH Grants.
1318
This report covers only FWS programs authorized under Part C of the HEA. The LEAP program provides federal
funds that can be used by states to support state work-study programs. The Department of Veterans Affairs also
administers the Veterans Administration Student Work-Study Allowance Program (VASWSAP) for veterans and
eligible persons. Authorization for this program is codified at 38 U.S.C. §§ 3485 and 3537.
14
U.S. Department of Education, Office of the Under Secretary, Planning and Evaluation Service, Postsecondary,
Adult, and Vocational Education Division, The National Study of the Operation of the Federal Work-Study Program:
Summary Findings from the Student and Institutional Surveys (Washington, DC: 2000), p. 57.
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and is willing to work.19 Students receive their award as compensation for the hours they have
worked. Earnings from FWS employment are considered “excludable income” in determining a
student’s financial need for the subsequent year. Awards are based on a combination of factors
such as a student’s financial need, financial aid available from other sources, the wage rate, and
how many hours per week the student can work. There is no maximum award amount.20
FWS Employment
FWS employment may consist of work for the higher education institution a student attends, for; a
private non-profit organization, fornonprofit organization; a federal, state, or local public agency,; or for a private forprofit for-profit
organization. Conditions applicable to all types of FWS employment include that it:
(A) will not result in the displacement of employed workers or impair existing contracts for
services;
(B) will be governed by such conditions of employment as will be appropriate and
reasonable in light of such factors as type of work performed, geographical regions, and
proficiency of the employee;
(C) does not involve the construction, operation, or maintenance of so much of any facility
as is used or is to be used for sectarian instruction or as a place for religious worship; and
(D) will not pay any wage to students employed ... [through the FWS program] that is less
than the current federal minimum wage as mandated by Section 6(a) of the Fair Labor
Standards Act of 1938.15
Students21
In addition to the above requirements, students working for private for-profit organizations must
be employed in jobs that are
academically relevant to their pursuits. Furthermore, such students
cannot be employed under
FWS if they otherwise would have been employed by the
organization. Students employed by
proprietary institutions that they also attend either must be
employed on-campus in jobs that, in
addition to the aforementioned requirements, also provide student services directly related to the
student’s education;
education or in community service jobs. Proprietary institutions cannot employ FWS
students in
jobs that involve the solicitation of other students to attend the institution.
Employment by private
for-profit organizations must be arranged between the sponsoring
institution and the for-profit
organization.
FWS Community Service Employment
Since FY2000, institutions participating in FWS have been required to use at least 7% of their
FWS allocation to compensate students employed in community service jobs, including 100% of
any excess FWS funds they receive through reallocation of other institutions’ unspent FWS
funds.1622 In meeting the 7% requirement, institutions are required to ensure that they are operating
19
U.S. Department of Education, Office of the Under Secretary, Planning and Evaluation Service, Postsecondary,
Adult, and Vocational Education Division, The National Study of the Operation of the Federal Work-Study Program:
Summary Findings from the Student and Institutional Surveys (Washington, DC: 2000), p. 57.
20
HEA, §441 et seq. (42 U.S.C. §2751 et seq.)
21
HEA, §443(b)(1) (42 U.S.C. §2753(b)(1)).
22
From FY1994 through FY1999, institutions were statutorily required to use 5% of their FWS allocation to
compensate students employed in community service jobs.
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at least one tutoring or family literacy project in service to the community. Institutions may use
up to 10% of the funds they receive for administrative expenses under Section 489 of the HEA
and attributable to the FWS program for the operation of their FWS community service-learning
programs. The HEA defines community service as follows:
COMMUNITY SERVICES.—For purposes of this part, the term “community services”
means services which are identified by an institution of higher education, through formal or
15
HEA, § 443(b)(1) (42 U.S.C. § 2753(b)(1)).
From FY1994 through FY1999, institutions were statutorily required to use 5% of their FWS allocation to
compensate students employed in community service jobs.
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informal consultation with local nonprofit, governmental, and community-based
organizations, as designed to improve the quality of life for community residents,
particularly low-income individuals, or to solve particular problems related to their needs,
including:
(1) such fields as health care, child care (including child care services provided on campus
that are open and accessible to the community), literacy training, education (including
tutorial services), welfare, social services, transportation, housing and neighborhood
improvement, public safety, emergency preparedness and response, crime prevention and
control, recreation, rural development, and community improvement;
(2) work in a project, as defined in Section 101(20) of the National and Community Service
Act of 1990 (42 U.S.C. § 12511(20));
(3) support services to students with disabilities, including students with disabilities who are
enrolled at the institution; and
(4) activities in which a student serves as a mentor for such purposes as—
(A) tutoring;
(B) supporting educational and recreational activities; and
(C) counseling, including career counseling.1723
Tutoring and family literacy projects include those that employ students as reading tutors of
children who are of preschool age or who are in elementary school, or in family literacy projects.
In In
many instances, FWS jobs in tutoring and family literacy projects count toward an institution’s
7% community service requirement. However, this may not always be the case. For instance, ED
has determined that if FWS students are employed as tutors in an institution’s daycare center and
the center is not open and accessible to the community, then the job could not be counted toward
satisfying the institution’s 7% community service requirement.1824
Civic Education and Participation Activities
The HEOA amended the FWS programs to establish new categories of employment for
participating students. To the extent practicable, IHEs must give priority to the employment of
students participating in FWS projects that educate or train the public about evacuation,
emergency response, and injury prevention strategies relating to natural disasters, terrorist acts,
and other emergencies. Institutions may also use FWS funds to employ students employed in
in projects that
teach civics in schools, raise awareness about government functions or resources, or
increase civic participation. Institutions also must ensure that participating students are
appropriately trained to carry out these activities.19
17
HEA, § increase
23
24
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HEA, §441(c) (42 U.S.C. § 2751(c)).
ED, 2010-20112014-2015 FSA Handbook, vol. 6—The Campus-Based Programs, pp. 6-29 through 6-39.
19
HEA, § 443(e) (42 U.S.C. § 2753(e)).
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civic participation. Institutions also must ensure that participating students are appropriately
trained to carry out these activities.25
Federal and Nonfederal Shares of Compensation
Under the FWS programs, students are compensated with a combination of federal funding and a
matching amount provided either by the institution or the employer. The share of compensation
that may be provided through federal funding varies according to the type of FWS employment.
For most FWS jobs, the maximum federal share of compensation is 75%; however, in certain
instances, the federal share may be higher (see Table 1). For employment in the private for-profit
sector, the federal share of compensation is limited to 50%. An institution’s matching share of
compensation may come from any source (other than FWS), and may be paid in the form of
services, such as tuition, room, board, or books provided by the institution. Table 1 highlights the
maximum federal share of compensation for the various types of FWS employment.
Table 1. FWS Requirements for Federal Share of Compensation
Type of FWS
Employment
Maximum
Federal Share
Specific Requirements
FWS—In general
75%
General requirement
Private non-profitnonprofit or
government agency other
than the institution
May exceed 75%, but
may not exceed 90%,
consistent with
regulations
Employer selected for student on case-by-case basis and
otherwise would be unable to afford cost of employment; and
no no
more than 10% of the institution’s FWS students are
employed in jobs for which the federal share exceeds 75%
Regulatory exceptiona
100%
Determination by the Secretary that federal share in excess
of 75% is necessary to further the purpose of the FWS
program
Private for-profit sector
50%
Employing for-profit organization must provide the
nonfederal share of compensation
Tutoring and Literacy
Projects
100%
Priority given to employment of students in projects funded
under the Elementary and Secondary Education Act (ESEA)
Work-Colleges
50%
Separate funding authorization; institution must match dollarfor-dollar with non-federalnonfederal funds
Civic education and
participation activities
100%
Projects must teach civics in school, raise awareness of
government functions or resources, or increase civic
participation.
Source: HEA, §§ 443, 444, 447, 448 (42 U.S.C. §§ 2753, 2754, 2756a, 2756b); and ED, 2010-20112014-2015 FSA Handbook,
vol. 6—The Campus-Based Programs, pp. 6-1017 through 6-13.
a.19.
a.
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Applicable for schools designated as eligible schools under the Developing Hispanic Serving Institutions
Program, the Strengthening Institutions Program, the Strengthening American Indian Tribally Controlled
Colleges and
Universities Program, the Strengthening Alaska Native and Native Hawaiian-Serving
Institutions Program, the
Strengthening Historically Black Colleges and Universities Program.
b.
This provision was added by the HEOA. Specific requirements may be addressed in future regulations, and the
Strengthening Historically Black Graduate Institution Programs.
HEA, §443(e) (42 U.S.C. §2753(e)).
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.
Off-Campus Community Service Employment
The HEOA established an FWS Off-Campus Community Service Employment program with a
separate authorization of appropriations. Under the program, the Secretary is authorized to make
grants to IHEs otherwise participating in the FWS programs to supplement off-campus
community service employment. Recipient institutions must use funds to recruit and compensate
students, and may use funds to compensate students for travel and training directly related to their
community service employment. In awarding grants to institutions, the Secretary is required to
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give priority to institutions whose students would be employed in community service related to
early childhood education and the preparation for emergencies and natural disasters.2026
Flexibility in Making Payments to Disaster-Affected Students
Institutions located in areas affected by a major disaster may continue to make FWS payments to
students affected by the disaster who during. During the award year had, the students must have earned FWS aid and who
and, as a
result of the disaster, became unable to fulfill their work-study obligation and were
unable to be
reassigned to another work-study job. Disaster-affected students may receive FWS compensation
compensation for no more than one academic year. Payments to disaster-affected students also
must meet
maximum federal matching requirements, unless waived by the Secretary.27
Job Location and Development Programs
Institutions may use up to the lesser of 10% of their FWS allocation or $75,000 to establish or
expand a job location and development program operated either by the institution or jointly with
another institution. The program must locate and develop jobs, including community service jobs,
for currently enrolled students. Jobs located and developed should be compatible with students’
scheduling needs and complement their educational and vocational goals. The federal share of
funds used to operate the program cannot exceed 80%. Job location and development programs
cannot be used to find jobs at the institution, nor should they be used to find jobs for students
after graduation.28
Work Colleges
The FWS programs authorize funding to support comprehensive work-learning-service programs
at select institutions called “work colleges.” Work colleges are public and private nonprofit, fouryear, degree-granting institutions with a commitment to community service that require students
. They require
students to participate in comprehensive work-learning-service programs that contribute to their education
education and the welfare of the broader community. Specifically, at least half of full-time
students must
participate in a comprehensive work-learning-service program for at least five
hours per week, or
at least 80 hours per each period of enrollment. In work colleges, all resident
students must be
required to participate in work-learning-service programs that are an integral
and stated part of
the institution’s educational philosophy and program,; participation by all
resident students must
be required for enrollment and graduation, work. Work-learning-service must be
included as part of
students’ college records, and there must be consequences for nonperformance or failure in the
26
HEA, §447(b) (20 U.S.C. §2756a(b)).
HEA, §445(d)(1) (20 U.S.C. §2755(d)(1)).
28
HEA, §446 (42 U.S.C. §2756).
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or failure in the work-learning-service program that are similar to the consequences for failure in
the regular academic program.
The Work Colleges program contains its own authorization of appropriations. Institutions also
may transfer funds from their regular FWS program allocation and their Perkins Loan FCC
federal
capital contributions allocation to the Work Colleges program. Authorized activities under the
Work Colleges program
include providing support to students participating in work-learning-servicelearningservice programs; promoting
the work-learning-service experience in postsecondary education;
carrying out traditional FWS
and job location and development programs; developing,
administering, and assessing
comprehensive work-learning-service programs; coordinating and carrying out joint projects to
20
HEA, § 447(b); (20 U.S.C. § 2756a(b)).
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carrying out joint projects to promote work-learning-service; and carrying out comprehensive
longitudinal studies of worklearningwork-learning-service programs.29
Allocation of Funds to Institutions
Similar to the FSEOG program, FWS funds are allocated to IHEs according to statutorily
prescribed procedures. Funds first are allocated first to institutions based on previous years’
allocations, with priority going to institutions that participated in the program in FY1999. These
institutions are eligible to receive 100% of their FY1999 allocation as their base guarantee.2130
Institutions that began participating after FY1999, but whichthat are not first- or second-time
participants, receive a base guarantee that is the greatest of 90% of the amount they received in
their first year of participation, or $5,000. Institutions participating in the FWS program for their
first or second year receive as their base guarantee, the greatest of $5,000, 90% of an amount
proportional to that received by comparable institutions, or 90% of what the institution received
in its first year of participation. However, if an institution began participating in FWS after
FY1999 and received a larger allocation in its second year of participation than in its first, it is
allocated 90% of the amount it received in its second year of participation. If sufficient funds are
not appropriated, then institutions’ awards are reduced proportionately, resulting in an amount
called their adjusted base guarantee.
Funds in excess ofgreater than the amount required to meet institutions’ base guarantee are allocated
according to institutions’ proportionateproportional share of excess eligible need. For the FWS program,
excess excess
eligible need is the amount by which an institution’s share of self-help need (fair share)
exceeds exceeds
its base guarantee. Self-help need is calculated separately for undergraduate students and
graduate graduate
and professional students according to formulas that take into account the cost of
attendance at
the institution and the approximate EFCs of students attending the institution.
Institutions whose
grants are based, in part, on the need of independent students or those attending
less than full-time
are required to assist these students through FWS employment with a
reasonable portion of the
FWS grant. The Secretary is authorized to allocate up to 10% of funds
appropriated for FWS that
are in excess of $700 million to institutions from which 50% or more
of Pell Grant recipients
either graduate or transfer to four-year institutions.
Institutions are provided flexibility to carryover up to 10% of their FWS funds for use in a
succeeding fiscal year to carry out the FWS program. If an institution neither uses funds in the
29
HEA, §448 (42 U.S.C. §2756b).
This is equal to the sum of its FY1999 (award year 1999-2000) base guarantee, plus its initial award year 1999-2000
pro rata increase, plus the additional FWS funds the institution received from the $17 million set aside that year for
allocation to institutions that certified that they graduated or transferred at least 50% of their Pell Grant recipients.
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year for which they were grantedyear for which they were granted, nor carries them over to the next fiscal year, the Secretary may,
in the next succeeding fiscal year, reallocate them to other institutions within the same state. Up
to 10% of an institution’s allocation may be granted by the Secretary for the purpose of making
grants to students prior to the beginning of the fiscal year, but after the end of the prior academic
year. The Secretary also is required to reallocate any excess funds returned by institutions to
eligible institutions that in the previous fiscal year used at least 5% of their FWS allocation to
compensate students employed in tutoring in reading or family literacy activities. Reallocated
funds must be distributed to such institutions according to their excess eligible need. Institutions
returning more than 10% of their allocation may, at the discretion of the Secretary, be subject to
having their next year’s allocation reduced by the amount returned.
21
This is equal to the sum of its FY1999 (award year 1999-2000) base guarantee, plus its initial award year 1999-2000
pro rata increase, plus the additional FWS funds the institution received from the $17 million set aside that year for
allocation to institutions that certified that they graduated or transferred at least 50% of their Pell Grant recipients.
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Federal Perkins Loans
The Federal Perkins Loan program authorizes the allocation of federal funds to IHEs to assist
them in capitalizing revolving loan funds for the purpose of making low-interest loans to students
with exceptional financial need. The Federal Perkins Loan program is authorized under the HEA
at Title IV, Part E. It supersedes Title II—Loans to Students in Institutions of Higher Education,—
of the National Defense Education Act of 1958 (P.L. 85-864), which was incorporated into the
HEA through the Education Amendments of 1972 (P.L. 92-318). Previously, these loans were
known as National Defense Student Loans (Defense Loans) and National Direct Student Loans
(NDSLs).
Institutions capitalize revolving loan funds created under the Federal Perkins Loan program with
a combination of federal and institutional capital contributions (FCCs and ICCs, respectively).
Institutions apply to ED for FCC funds, which are allocated according to procedures similar to
those used for the FSEOG and FWS programs. Each institution’s ICC must be equal to one-third
of the FCC. After making loans, institutions recapitalize their loan funds by depositing the
principal and interest repaid by students who borrowed under the program, as well as any other
charges or earnings associated with the operation of the program.
Award Procedures and Terms of Perkins Loans
Institutions are required to establish written selection procedures for awarding Perkins Loans to
eligible students and to keep thesethem on file at the institution. Loans must be made reasonably
available to all eligible students, to the extent that funds are available, and priority must be given
to students with exceptional financial need. Institutions’ selection procedures may include
individuals’ willingness to repay the loan.
Undergraduate students (including those seeking an additional undergraduate degree, if they are
otherwise eligible), and graduate and professional students are eligible to borrow from the
institutions they attend under the Perkins Loan program. Students studying abroad in programs
approved for academic credit by participating institutions also may receive Perkins Loans. Under
the terms of the program, the maximum amount a student may borrow per academic year is
$5,500 for undergraduate students and $8,000 for graduate and professional students. The
maximum aggregate amount that a student may borrow is limited to $27,500 in unpaid principal
for undergraduate students who have completed two years of study, but who have not completed
31
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their baccalaureate degree; $60,000 for graduate and professional students; and $11,000 for any
other students. Both the annual and aggregate loan limits may be increased by up to 20% for
students studying abroad in approved programs. If the amount of an institution’s FCC is based in
part on independent students or those studying less than full-time, then these students must be
provided with a reasonable portion of the Perkins Loans made by the institution.
Interest on Perkins Loans is fixed at a rate of 5% per year.2232 However, no interest accrues prior to
a student beginning repayment, nor while repayment is suspended during deferment (described
below). Borrowers must begin repaying Perkins Loans nine months after they no longer are
enrolled at least half-time, and must complete repayment within 10 years after beginning
repayment. Institutions may establish incentive repayment programs in which they may reduce
22
Loans made prior to July 1, 1981 were at 3%; loans made between July 1, 1981 and September 30, 1981 were at 4%;
and loans made on or after October 1, 1981 are at 5%.
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the interest rate by up to one percentage point in instances where a student makes 48 consecutive
payments. In addition, if a student repays a Perkins Loan in full prior to the end of the repayment
period, an institution may discount the loan balance owed by up to 5% at the time the repayment
is made. However, institutions may not use either federal or institutional funds from the Perkins
revolving loan fund to absorb the costs of incentive repayment programs and must reimburse the
fund on a quarterly basis for any lost income.
Deferment
In general, deferment is a period during which a borrower is not required to make payments on
the loan balance and during which interest does not accrue. A Perkins Loan borrower is granted a
deferment if the borrower:
•
is enrolled at least half-time at an eligible institution;
•
is pursuing a graduate fellowship or rehabilitation training program approved by
the Secretary (excluding medical internship and residency programs);
•
is seeking, but unable to find, full-time employment (for up to three years);
•
is serving on active duty in the military or is performing qualifying National
Guard duty during a war or other military operation ofor national emergency, and
for 180 days following such service;
•
is experiencing an economic hardship (for up to three years);
•
is engaged in a type of service that makes the borrower eligible for loan
cancellation (discussed later); or
•
is a member of the National Guard or other, of another reserve component of the armed
forces, or a member of the armed forces in retired status, who was called to
active duty
service while enrolled, or within six months after being enrolled, at
an eligible
institution (for up to 13 months following the completion of such
service or re-enrollment).23
Borrowers are not required to request deferment in writing,reenrollment).33
32
Loans made prior to July 1, 1981 were at 3%; loans made between July 1, 1981 and September 30, 1981 were at 4%;
and loans made on or after October 1, 1981 are at 5%.
33
Other types of deferments may be available to borrowers of Perkins Loans made before July 1, 1993. See ED, 20142015 FSA Handbook, vol. 6—The Campus-Based Programs, pp. 6-130 through 6-132.
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Borrowers are not required to request deferment in writing but must provide the institution with
information necessary to document their deferment status. They also are not required to resume
making payments until six months following the completion of any of the periods described
above for which they are exempted from making payments. Time in deferment does not count
toward the 10-year repayment period.34
Forbearance
In general, forbearance is a temporary suspension or postponement of payments during which
interest continues to accrue. A borrower may be granted forbearance from paying principal and
interest or of principal only if the borrower’s debt burden, due to HEA student financial assistance
loans, is greater than or equal to 20% of the borrower’s gross income, or if the institution
determines that forbearance should be granted for other reasons. Examples include servicesservice in
AmeriCorps or for reasons due to a “national military mobilization or other national
23
Other types of deferments may be available to borrowers of Perkins Loans made before July 1, 1993.
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emergency.”24emergency.”35 Forbearance may be granted for a period of up to one year at a time, and may be
renewed for a total period of up to three years.36
Loan Cancellation
Individuals who have engaged in the following types of public service are eligible to have part or
all of their loans cancelled25cancelled:37
•
full-time elementary or secondary school teacher employed at a public school,
private nonprofit school, or location operated by an educational service agency,
in which low-income students are more than 30% of the total enrollment;2638
•
full-time staff member employed in a Head Start preschool program, or a
prekindergarten or child care program that is licensed or regulated by the state;
•
full-time special education teacher employed in a public or nonprofit elementary
or secondary school system (including a system of an educational service
agency), or a professional provider of Individuals with Disabilities Education Act
(IDEA) early intervention services in a public or nonprofit program;
•
member of the U.S. Armed Forces serving in an area of hostilities;
•
Peace Corps or Americorps*AmeriCorps VISTA volunteer;2739
•
full-time law enforcement or corrections officer employed in a local, state, or
federal law enforcement or corrections agency, or full-time attorney employed in
a public defender organization;
•
full-time teacher of mathematics, science, foreign languages, bilingual education,
or other shortage subject area (as determined by the SEA);
•
full-time nurse or medical technician28 providing health care services;
•
full-time employee of a public or private nonprofit agency serving high-risk
children from low-income communities and their families;
•
full-time firefighter serving in a local, state, or federal fire department or district;
•
full-time faculty member at a Tribal College or University;
•
librarian with a master’s degree in library science employed in an elementary or
secondary school eligible for assistance under ESEA , Title I-A, or in a public
library serving a geographic area that contains such a school; or
24
ED, 2010-2011 FSA Handbook, vol. 6—Campus-Based Programs, pp. 6-75 through 6-88.
HEA, § 465(a) (20 U.S.C. § 1087ee(a)).
26 or full-time attorney employed in
a public defender organization;
34
HEA, §464(c)(2)(A) (20 U.S.C. §1087dd(c)(2)(A)).
ED, 2014-2015 FSA Handbook, vol. 6—The Campus-Based Programs, p. 6-122.
36
HEA, §464(e) (20 U.S.C. §1087(e)).
37
HEA, §465(a) (20 U.S.C. §1087ee(a)).
38
Teacher cancellations may be granted only to individuals teaching in a schoolschools serving children from low-income
families and which isthat are listed in the Directory of Designated Low-Income Schools for Teacher Cancellation Benefits.
2739
Borrowers who have received a national service education award for volunteer service with AmericorpsAmeriCorps under Title
I-D of the National and Community Service Act of 1990 are not eligible for loan cancellation benefits for the same
volunteer service.
28
For additional information on the definition of “medical technician” see U.S. Department of Education, Office of
Postsecondary Education, Dear Colleague Letter CB-08-14, “Medical Technician Loan Cancellation Benefit in the
Federal Perkins Loan Program,” (December 8, 2008), at http://ifap.ed.gov/dpcletters/attachments/CB0814Attach.pdf.
25
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•
full-time teacher of mathematics, science, foreign languages, bilingual education,
or other shortage subject area (as determined by the state education agency);
•
full-time nurse or medical technician40 providing health care services;
•
full-time employee of a public or private nonprofit agency serving high-risk
children from low-income communities and their families;
•
full-time firefighter serving in a local, state, or federal fire department or district;
•
full-time faculty member at a Tribal College or University;
•
librarian with a master’s degree in library science employed in an elementary or
secondary school eligible for assistance under ESEA , Title I-A, or in a public
library serving a geographic area that contains such a school; or
•
full-time speech language pathologist with a master’s degree and working
exclusively with schools eligible for assistance under ESEA, Title I-A.
Perkins Loan cancellation is based on both the number of years of service an individual has
completed and a rate of cancellation applicable to the particular type of service. Table 2 presents
the percentage of the principal of Perkins Loans that is canceled for each year of service in an
activity eligible for Perkins Loan cancellation. The terms of the program prescribe that the
amount of principal and interest canceled for public service shall not be considered as income for
purposes of the Internal Revenue Code (IRC) of 1986.
The Secretary is required to reimburse institutions for Perkins Loans canceled for students
engaged in public service. Funds for reimbursing institutions for loan cancellations may not come
from the appropriation designated for FCCs. Rather, funds for the reimbursement of Perkins Loan
cancellations are appropriated under a separate authorization from funds for Perkins Loan FCCs.
Each year, the Secretary is required (to the extent feasible), to reimburse institutions within three
months after they file their applications for reimbursement of campus-based funds.
Table 2. Perkins Loan Cancellation Rates by Type of Service
Type of Service
PercentPercentage of Perkins Loan Principal Canceled
Per Year of Service
1st and 2nd
Years
3rd and 4th
Years
5th Year
and Later
Max.
Total
Full-time elementary or secondary school teacher in a
designated low-income school
15
20
30
100
Full-time staff member in preschool, prekindergarten, or
child care program
15
15
15
100
Full-time special education teacher/IDEA professional
provider
15
20
30
100
Member of Armed Forces in area of hostilities
15
20
30
100
Peace Corps or Americorps*VISTA volunteer
15
20
N/A
70
AmeriCorps VISTA volunteer
15
20
N/A
70
Type of Service
40
For additional information on the definition of “medical technician” see U.S. Department of Education, Office of
Postsecondary Education, Dear Colleague Letter CB-08-14, “Medical Technician Loan Cancellation Benefit in the
Federal Perkins Loan Program,” December 8, 2008, at http://ifap.ed.gov/dpcletters/attachments/CB0814Attach.pdf.
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.
Percentage of Perkins Loan Principal Canceled
Per Year of Service
1st and 2nd
Years
3rd and 4th
Years
5th Year
and Later
Max.
Total
Full-time law enforcement/corrections officer or public
defender
15
20
30
100
Full-time math, science, foreign language, bilingual
education, or other shortage subject area teacher
15
20
30
100
Full-time nurse or medical technician
15
20
30
100
Full-time employee of agency serving high-risk children and
their families
15
20
30
100
Full-time firefighter
15
20
30
100
Full-time faculty member at a Tribal College or University
15
20
30
100
Librarian with a master’s degree in an ESEA, Title I-A,
school
15
20
30
100
Full-time speech language pathologist with a master’s
degree working in an ESEA, Title I-A, school
15
20
30
100
Type of Service
Source: HEA, § 465 (20 U.S.C. § 1087ee).
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1087ee).
Loan Discharge
Institutions must discharge a borrower’s liability to repay Perkins Loans if the borrower dies;
becomes permanently and totally disabled, as determined according to regulations issued by the
Secretary; becomes unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment that is expected to result in death, or that has
continuously lasted or can be expected to continuously last for 60 months; or is determined by the
Secretary of Veterans Affairs (VA) to be unemployable due to a service-connected disability.2941
Collections may be resumed if a borrower whose loan has been discharged subsequently receives
a loan under HEA, Title IV, if the borrower earns income in excess of the poverty line, or if the
Secretary determines the resumption of collections to beis necessary. Institutions are not
reimbursed reimbursed
by the Secretary for losses due to the discharge of Perkins Loans.
Loan Default and Rehabilitation
In general, a Perkins Loan is considered to be in default if the borrower has failed to comply with
the terms of the promissory note or failed to make payments on a loan for 240 days (for a loan
repayable monthly) or 270 days (for a loan repayable quarterly). The cohort default rate for an
institution is defined as the percentage of current and former students entering repayment in that
award year on on
Perkins Loans received for attendance at that institution and who default on their
loans before the end
of the following award year.3042 For institutions with less than 30 students
entering repayment in
any year, the cohort default rate is calculated over a three-year period.
41
For additional information on the discharge of Perkins Loans, see CRS Report R42110, Federal Student Loan
Discharge Procedures for Borrowers Who Become Totally and Permanently Disabled: Current Issues and Policy
Considerations, by David P. Smole and Umar Moulta-Ali.
42
HEA, §462(g) (42 U.S.C. §1087bb(g)).
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A borrower who has defaulted on a loan may rehabilitate the loan by making 9nine consecutive ontime payments. Rehabilitated borrowers are returned to regular repayment status, begin a new 10year repayment schedule, and have the default removed from their credit history. A borrower may
rehabilitate a loan only once.
Allocation of Funds to Institutions
Under the Perkins Loan program, funds are allocated to IHEs according to procedures using a
two-stage process somewhat similar to that used for the FSEOG and FWS programs—funds firstfirst, funds
are allocated according to institutions’ previous year’s allocations (base guarantee), and any
remaining funds are allocated according to institutions’ share of excess eligible amounts of
student need (fair share increase). Unlike the formulas for the FSEOG and FWS programs,
however, the Perkins Loan allocation formulas also include a default penalty applicable to
institutions with large proportions of borrowers defaulting on their Perkins Loans. The default
penalty is used to limit the awarding of Perkins Loan FCCs to only to institutions with cohort
default rates below a maximum threshold. Institutions with a cohort default rate of less than 25%
are assigned a default penalty of “1” and those with a default rate of 25% or greater are assigned a
default penalty of “0.”
29
For additional information on the discharge of Perkins Loans, see CRS Report R42110, Federal Student Loan
Discharge Procedures for Borrowers Who Become Totally and Permanently Disabled: Current Issues and Policy
Considerations, by David P. Smole and Umar Moulta-Ali.
30
HEA, § 462(g) [42 U.S.C. § 1087bb(g)].
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The FCC for institutions with a “0” default penalty is reduced to $0 in the
following cycle of allocations.
According to the allocation formulas, FCC funds first are allocated to IHEs according to their
previous year’s allocations with priority going to institutions that participated in the Perkins Loan
program in FY1999. These institutions are eligible to receive 100% of their FY1999 allocation.3143
Institutions that began participating in the Perkins Loan program after FY1999, but whichthat are not
first- or second-time participants, are eligible to receive 100% of the amount they received in
their first year of participation. Those institutions that began participating after FY1999, and
which that
are first or second time participants, generally are eligible to be awarded either 90% of the
amount they received in the previous year or 90% of the amount awarded to comparable
institutions on a per-capitastudent basis. However, if an institution began participating in the Perkins
Loan program after FY1999 and received a larger allocation in its second year of participation
than in its first, it is allocated 90% of the amount it received in its second year of participation if
this is a larger amount than it would otherwise receive. The minimum grant amount is $5,000.
Any institution with a default penalty of “0,” however, has its FCC allotment reduced to $0.
After allocating funds according to institutions’ previous year’s allocations, any remaining FCC
funds are allocated based on each institution’s fair share of excess eligible student need. This is
the amount by which an institution’s share of eligible self-help need exceeds the amount already
allocated to it according to its base guarantee. Like in the FWS program, self-help need is
calculated calculated
separately for undergraduate students, and for graduate and professional students
according to
formulas that take into account the institution’s COA and the approximate EFCs of
students students
attending the institution. However, for the Perkins Loan program, an institution’s eligible
amount amount
of need is the amount of the institution’s self-help need, minus the institution’s collections
(defined as the amount the institution collected in the second year prior to the award year,
multiplied by 1.21), multiplied by its cohort default penalty (either 1 or 0).
43
According to the Department of Education’s Explanation of Tentative Funding Level Worksheets: 2014-2015 Award
Period for the campus-based programs, this is equal to the institution’s award year 1999-2000 conditional guarantee,
multiplied by its award year 1999-2000 cohort default penalty factor, multiplied by a 60.77% reduction factor.
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The Secretary is authorized to reallocate any excess Perkins Loan funds returned by institutions.
Eighty percent of these funds must be reallocated to institutions according to their excess eligible
amounts of student need, while the remaining 20% can be reallocated according to regulationregulations
established by the Secretary. An institution returning more than 10% of its allocation will have its
subsequent year’s allocation reduced by the amount returned, unless waived by the Secretary as
contrary to the interest of the program.
Distribution of Assets from Perkins Loan Funds
Upon ceasing to participateending participation in the Perkins Loan program, institutions are required to begin a
distribution of assets from their revolving loan funds.32 Upon such occurrence44 In doing so, an institution must
repay the
Secretary a portion of the balance of its loan funds that is proportional to the amount
constituted by of FCCs. In
many instances, this percentage could range between 85% and 90% of an
institution’s Perkins Loan fund.33
31
According to the Department of Education’s Explanation of Worksheet 2011-2012 Award Period for the campusbased programs, this is equal to the institution’s award year 1999-2000 conditional guarantee, multiplied by its award
year 1999-2000 cohort default penalty factor, multiplied by a 60.77% reduction factor.
32
Statutory language at HEA, § 466 (20 U.S. C. § 1087ff) provides that institutions must begin a distribution of assets
from their
Loan fund.45
Section 466 of the HEA states that institutions were to begin distributing assets from their
revolving loan funds after October 1, 2012; however, ED has determined that this language is superseded by
language at HEA, § 461(b), and GEPA, § 422(a), which together authorize the Perkins Loan program through
September 30, 2015. For additional information, see ED, Dear Colleague Letter, GEN-11-02, “Status of the Federal
Perkins Loan Program,” February 17, 2011, at http://www.ifap.ed.gov/dpcletters/GEN1102.html.
33
U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter CB-00-05, Enclosure 1.
(continued...)
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Campus-Based Student Financial Aid Programs Under the Higher Education Act. However, ED determined that Section 461 of the
HEA, which authorized appropriations for the Perkins Loan programs through FY2014,46 and
Section 422 of the General Education Provisions Act (GEPA), which authorizes an automatic
one-year extension of appropriations if Congress does not act otherwise,47 supersede the October
1, 2012, distribution provisions. Under ED’s interpretation, the Perkins Loan program is
authorized through FY2015, as the program’s HEA authorization expired at the end of FY2014
and Congress did not extend or repeal the program’s authorization.48
Transfer of Funds Between Campus-Based Programs
Institutions have flexibility to transfer funds between the campus-based programs in which they
participate. They may transfer up to a total of 25% of their allotment under the Federal Perkins
Loan program for use in the FSEOG or FWS programs, or both. Institutions may transfer up to
25% of their allotment under the FWS program for use in the FSEOG or Federal Perkins Loan
program, or both. Institutions also may transfer up to 25% of their FSEOG allocation for use in
the FWS programs. As noted earlier, work colleges also may transfer up to 100% of their Perkins
Loan FCC or FWS allocation to their Work Colleges program.
For award year (AY) 2009-20102012-2013, based on data reported to ED, 1,460234 institutions transferred a
total of $115.3approximately $77.9 million from the FWS to the FSEOG program; 214308 institutions
transferred a total
of $4 of approximately $7.2 million from the FSEOG to the FWS program; and 24 9
institutions transferred a total of
$2.1 approximately $1.0 million from the FWS to the Perkins Loan program.34 In prior years when Perkins Loan
FCCs were appropriated, some institutions also transferred funds from the Perkins Loan program
44
ED, 2014-2015 FSA Handbook, vol. 6—The Campus-Based Programs, p. 6-102.
U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter CB-00-05, Enclosure 1.
Institutions participating in the Perkins Loan program typically have received FCCs throughout the duration of their
participation in the program. From the inception of the program through the 1992-1993 award year, the federal share
was 90%. In the 1993-1994 award year, the federal share was 70%. Since the 1994-1995 award year the federal share
has been 75%.
46
20 U.S.C. §1087aa.
47
20 U.S.C. §1226a.
48
ED, Dear Colleague Letter, GEN-11-02, “Status of the Federal Perkins Loan Program,” February 17, 2011, at
http://www.ifap.ed.gov/dpcletters/GEN1102.html.
45
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program.49 In prior years when Perkins Loan FCCs were appropriated, some institutions also
transferred funds from the Perkins Loan program to the FSEOG and FWS programs.
Administrative Costs
Institutions participating in the campus-based programs are entitled to an administrative cost
allowance to cover the expenses of administering the programs. Administrative cost allowances
are determined according to the following schedule:
•
5% of the institution’s first $2.75 million in campus-based expenditures; plus
•
4% of the institution’s campus-based expenditures greater than $2.75 million and
less than $5.5
million; plus
•
3% of the institution’s campus-based expenditures in excess of $5.5 million.
In calculating administrative costs, institutions include both federal and institutional
expenditures.3550 Institutions take their administrative cost allowances out of federal funds allocated
for the FSEOG and FWS programs, and from cash on hand in their revolving loan funds for the
Perkins Loan program. Institutions have some discretion in determining how to allocate
administrative costs across the three campus-based programs. Administrative cost allowances as
claimed for the campus-based programs are shown in Table 3.
(...continued)
Institutions participating in the Perkins Loan program typically have received FCCs throughout the duration of their
participation in the program. From the inception of the program through the 1992-1993 award year, the federal share
was 90%. In the 1993-1994 award year, the federal share was 70%. Since the 1994-1995 award year the federal share
has been 75%.
34
Table 3. Administrative Cost Allowances for the
Campus-Based Programs
(AY2012-2013)
Campus-Based Program
Administrative Cost Allowance
FSEOG
$ 14,415,002
FWS
$ 46,970,897
Perkins Loans
$ 50,977,251
Total
$ 112,363,150
Source: U.S. Department of Education, Office of Postsecondary Education, Federal Campus-Based Programs Data
Book 2014.
Funding and Participation Data
This section presents budget information on past funding levels for the campus-based programs
and program information including the number of institutions participating in each program, the
number of students awarded aid and average award amounts, and the distribution of campusbased aid according to student and institutional characteristics.
49
U.S. Department of Education, Office of Postsecondary Education, Federal Campus-Based Programs Data Book
20112014, http://www2.ed.gov/finaid/prof/resources/data/databook2011/databook2011.html.databook2014/databook2014.html (Hereafter cited as ED,
Federal Federal
Campus-Based Programs Data Book, 2011.)
352014).
50
HEA, § 489 (20 U.S.C. § 1096); ED, 2010-20112014-2015 FSA Handbook, vol. 6—Campus-Based Programs, pp. 6-6 through
6-7.23.
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Table 3. Administrative Cost Allowances for the
Campus-Based Programs
(AY2008-2009)
Campus-Based Program
Administrative Cost Allowance
FSEOG
$12,605,202
FWS
58,278,715
Perkins Loans
40,817,891
Total
111,701,808
Source: U.S. Department of Education, Office of Postsecondary Education, Federal Campus-Based Programs Data
Book 2011.
Funding and Program Data
This section presents budget information on past funding levels for the campus-based programs,
and also program information including the number of institutions participating in each program,
the number of students awarded aid and average award amounts, and the distribution of campusbased aid according to student and institutional characteristics17
Campus-Based Student Financial Aid Programs Under the Higher Education Act
.
Funding for the Campus-Based Programs
In recent yearsOverall, funding for the FSEOG program has decreased slightly. Funding for the FWS
program has also decreased slightly in recent years, with the exception of, however, in recent years its
funding has increased. In FY2009, an additional $200
million provided in FY2009 million was provided for the program
under the American Recovery and Reinvestment Act (ARRA; P.L.
111-5). Funding for the FWS
Off-Campus Community Service program, which was established
under the HEOA, was only
provided for FY2010. Discretionary appropriations were last provided
for Perkins Loan FCCs in
FY2004; and funding was last provided for Perkins Loan Cancellations
in FY2009. Appropriation
figures for the campus-based programs are presented in Table 4 for the
past decade.
Table 4. Campus-Based Program Funding:
Appropriations for FY2002-FY2012FY2005-FY2015
(in thousands of dollars)
Fiscal Year
FSEOG
FWS
FWS OffCampus
Community
Service
Perkins Loan
FCCs
Perkins Loan
Cancellations
Fiscal Year
FSEOG
FWS
FY2002
725,000
1,011,000
—
100,000
67,500
FY2003
760,028
1,004,428
—
99,350
67,061
FY2004
770,455
998,502
—
98,764
66,665
FY2005
778,720
990,257
—
0
66,132
FY2006a
775,462
999,523
—
4,731
65,471
FY2007
770,933
980,354
—
0
65,471
FY2008
757,465
980,492
—
0
64,327
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FWS OffCampus
Community
Service
Perkins Loan
FCCs
Perkins Loan
Cancellations
Fiscal Year
FSEOG
FWS
FY2009b
757,465
1,180,492
0
0
67,164
FY2010
757,465
980,492
750
0
0
FY2011
735,990
978,531
0
0
0
FY2012
734,599
976,682
0
0
0
FY2013c
696,175
925,595
0
0
0
FY2014
733,130
974,728
0
0
0
FY2015
733,130
989,728
0
0
0
Sources: U.S. Department of Education, Budget Service, “Department of Education Fiscal Year 2012
2015 Congressional Action”
Table” at http://www2.ed.gov/about/overview/budget/budget15/15action.pdf; and historical tables.
a.
Amounts include a mandatory reappropriation of $28,429 million in expired FY2005 funds pursuant to the
National Disaster Student Aid Fairness Act (P.L. 109-86 ): $4.5 million for FSEOG, $19.2 million for FWS,
and $4.7 million for Perkins Loan FCCs.
b.
FWS includes a $200 million appropriation under the American Recovery and Reinvestment Act (ARRA;
P.L. 111-5).
c.
The FY2013 appropriations reflect the final amount appropriated, including the spending reduction
authorized by the Budget Control Act of 2011 (BCA; P.L. 112-25), commonly referred to as
“sequestration.”
Under each of the campus-based programs, federal funds are generally required to be matched by
the participating institution (or the employer under FWS, if other than the institution). As
previously described, under each of the programs, the institutional match generally is one-third
the amount of the federal share (however, in the FWS program, the required match can be as high
as one-half of the federal share or as low as zero, depending on the type of employment). Because
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of the matching requirements, the campus-based programs leverage federal funding to provide an
amount of student financial aid that is greater than the amount of federal funds appropriated for
each program.
Institutional Participation
In AY2009-2010, 6,896AY2012-2013, there were 7,508 postsecondary institutions were participating in HEA Title IV financial
financial aid programs.3651 Approximately 5650% of Title IV institutions awarded FSEOG aid, while
approximately 5044% employed students in FWS. However, only approximately 2420% of Title IV
institutions advanced loans under the Perkins Loan program. While fewer institutions of all types
participate in the Perkins Loan program than in either FSEOG or FWS, far fewer two-year and
proprietary participate in the Perkins Loan program than the other two programs.3752 It is possible
that these lower levels of participation are due to factors such as the administrative burden of
administering a revolving loan fund and the generally higher cohort default rates of students who
attend these types of institutions.
Over the past decade, there has been a slight increase in the number of IHEs participating in the
FSEOG and FWS programs. Institutional participation in the Perkins Loan program, however, has
continued a pattern of decline that has occurred over the past quarter century. Figure 1 displays1displays
the number of institutions participating in each of the campus-based programs since the 19851986 award year.
36
L.G. Knapp, J.E. Kelly-Reid, and S.A. Ginder, Enrollment in Postsecondary Institutions, Fall 2009; Graduation
Rates, 2003 & 2006 Cohorts; and Financial Statistics, Fiscal Year 2009, (NCES 2011-230), U.S. Department of
Education, Washington, DC, National Center for Education Statistics, 2011, p. 1.
37
ED, Federal Campus-Based Programs Data Book, 2011.
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19871988 award year.
Figure 1. Institutions Participating in the Campus-Based Programs
(AY1985-1986 through AY2011-2012AY1987-1988 through AY2012-2013)
5,000
4,500
4,000
3,500
Institutions
3,000
2,500
2,000
1,500
1,000
500
19
85
19 198
86 6
19 198
87 7
19 198
88 8
19 198
89 9
19 199
90 0
-1
19 99
91 1
19 199
92 2
19 199
93 3
19 199
94 4
-1
19 99
95 5
19 199
96 6
19 199
97 7
19 199
98 8
-1
19 99
99 9
20 200
00 0
20 200
01 1
20 200
02 2
20 200
03 3
20 200
04 4
-2
20 00
05 5
20 200
06 6
20 200
07 7
20 200
08 8
20 200
09 9
20 201
10 0
-2
20 01
11 1
-2
01
2
-
Award Year
FSEOG
FWS
Perkins
Source: ED, Federal Campus-Based Programs Data Book, 2011; and prior editions
Institutions
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Award Year
FSEOG
FWS
Perkins
Source: ED, Federal Campus-Based Programs Data Book 2014; and prior editions.
51
52
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ED, Federal Campus-Based Programs Data Book 2014.
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Students Served and Average Aid Amounts
This section presents information on the number of students being served and the average award
amounts for each of the three campus-based programs based on program data from ED. To
facilitate comparison of student award amounts over time, these data have been adjusted to 20092012
dollars according to the consumer price index for all urban consumers (CPI-U).
FSEOG
FSEOGFederal Supplemental Education Opportunity Grant program data on the number of students
granted awards and the average award amount
since the 1989-19901992-1993 award year (in constant 20092012
dollars and nominal dollars) are presented in Figure 2. Once the
smallest of the three campus-basedcampusbased programs in terms of the number of students served, the
FSEOG program has grown
steadily since its inception in the 1967-1968 award year to become
the largest today. Since AY1989-1990
AY1991-1992, it has served more students annually than either of the
other two campus-based
programs. The number of students receiving FSEOG awards increased
considerably during the
1990s, and since AY2004-2005, more than 1.4 million students annually
have received awards.
The average amount of aid provided per student under the FSEOG
program is the lowest among
the three campus-based programs. Over the past two decades,
increasing numbers of students
have been served through the FSEOG program, and the average
award amount has increased from $641 in AY1989-1990 to $669 in AY2009-2010. However, in
constant dollars, award amounts have declined by 40%.
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had increased
slightly (in nominal dollars) from $667 in AY1992-1993 to $778 in AY2001-2002. Beginning in
AY2002-2003, however, the average award amount steadily decreased, to $599 by AY2011-2012.
In constant dollars, average award amounts have declined by approximately 45% since AY19921993.
Figure 2. FSEOG: Number of Students Receiving Awards
and Average Award Amounts
(AY1989-1990 through AY2009-2010)
1,600,000
$3,000
1,400,000
1,200,000
$2,000
1,000,000
800,000
$1,500
600,000
$1,000
400,000
Average FSEOG Award
FSEOG Awards Granted
$2,500
$500
200,000
$-
19
89
19 -19
90 90
19 -19
91 91
19 -19
92 92
19 -19
93 93
19 -19
94 94
19 -19
95 95
19 -19
96 96
19 -19
97 97
19 -19
98 98
19 -19
99 99
20 -20
00 00
20 -20
01 01
20 -20
02 02
20 -20
03 03
20 -20
04 04
20 -20
05 05
20 -20
06 06
20 -20
07 07
20 -20
08 08
20 -20
09 09
-2
01
0
-
Students Served
Avg. Award
Avg. Award (2009 $s)
Source: ED, Federal Campus Based Programs Data Book, 2011, and prior editions.
FWS
FWS program data are presented in Figure 3. For most of the past two decades, between 675,000
and 750,000 students were served annually through FWS, although more than 810,000 students
received FWS aid in AY2004-2005. Over the past two decades, the average FWS award has
increased from $980 in AY1989-1990 to $1,700 in AY2009-2010; however, in constant dollars,
compensation amounts have remained level. From AY1994-1995 through AY1999-2000,
institutions participating in the FWS program were required to expend at least 5% of their initial
and supplemental FWS allocations to compensate students employed in community service jobs.
Beginning with AY2000-2001, institutions must expend 7% of their FWS allotment on
community service and operate at least one tutoring or family literacy project. Since the
community service requirements have been in place, ED reports that the number of students
employed in community service increased from 58,596 in AY1994-1995 to 132,424 in AY20092010. The darkly shaded portion of the bars in Figure 3 indicates the number of students
employed in community service.
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Figure 3. FWS: Number of Students Receiving Awards
and Average Award Amounts
(AY1989-1990 through AY2009-2010)
1,600,000
$3,000
1,400,000
$2,500
$2,000
1,000,000
800,000
$1,500
600,000
$1,000
400,000
Average FWS Award
FWS Awards Granted
1,200,000
$500
200,000
$-
19
89
19 -19
90 90
19 -19
91 91
19 -19
92 92
19 -19
93 93
19 -19
94 94
19 -19
95 95
19 -19
96 96
19 -19
97 97
19 -19
98 98
19 -19
99 99
20 -20
00 00
20 -20
01 01
20 -20
02 02
20 -20
03 03
20 -20
04 04
20 -20
05 05
20 -20
06 06
20 -20
07 07
20 -20
08 08
20 -20
09 09
-2
01
0
-
Students Served
Students in Community Service
Avg. Award
Avg. Award (2009 $s)
Source: ED, Federal Campus Based Programs Data Book, 2011,
Amounts
(AY1992-1993 through AY2012-2013)
1,600,000
3,000
2,500
1,200,000
2,000
1,000,000
800,000
1,500
600,000
1,000
400,000
Average FSEOG Award
FSEOG Awards Granted
1,400,000
500
200,000
-
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
-
Students Served
Avg. Award (nominal $s)
Avg. Award (2012 $s)
Source: ED, Federal Campus-Based Programs Data Book 2014; and prior editions.
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FWS
Federal Work Study program data are presented in Figure 3. For most of the past two decades,
between 675,000 and 750,000 students were served annually through FWS, although more than
810,000 students received FWS aid in AY2004-2005. Over the past two decades, the average
FWS award has increased (in nominal dollars) from $1,092 in AY1992-1993 to $1,673 in
AY2012-2013; however, in constant dollars, compensation amounts have remained level.
From AY1994-1995 through AY1999-2000, institutions participating in the FWS program were
required to expend at least 5% of their initial and supplemental FWS allocations to compensate
students employed in community service jobs. Beginning with AY2000-2001, institutions must
expend 7% of their FWS allotment on community service and operate at least one tutoring or
family literacy project. Since the community service requirements have been in place, ED reports
that the number of students employed in community service increased from 58,596 in AY19941995 to 120,571 in AY2012-2013. The darkly shaded portion of the bars in Figure 3 indicates the
number of students employed in community service.
Figure 3. FWS: Number of Students Receiving Awards and Average Award Amounts
(AY1992-1993 through AY2012-2013)
1,600,000
3,000
1,400,000
2,500
2,000
1,000,000
800,000
1,500
600,000
1,000
Average FWS Award
FWS Awards Granted
1,200,000
400,000
500
200,000
-
-
Students Served
Students in Community Service
Avg. Award (nominal $s)
Avg. Award (2012 $s)
Source: ED, Federal Campus-Based Programs Data Book 2014; and prior editions.
Success in meeting the community service requirements is determined by dividing the total funds
used to compensate students employed in community service jobs by the institution’s total FWS
allocation; and by determining whether the institution expended part of its allocation to
compensate students for community service employment as reading tutors or for family literacy
activities. Institutions may apply to the Secretary for a waiver from either or both of the FWS
community service requirements. There is no explicit penalty for failing to meet the requirement.
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.
Information on the expenditure of FWS funds for community service, by IHE for AY2006-2007AY2009-20010,
has been reported by the U.S. Department of Education and is available from the Corporation for
National and Community Service. Overall, participating IHEs spent 15.7519% of their allocations to
compensate students employed in community service jobs. Of 3,329 IHEs reporting data for
AY2006-2007, 3,025 (90.9%) either met the 7% expenditure requirement or received a waiver.3853
Perkins Loans
Historical data on the Perkins Loan program are provided in Figure 4. Between AY1989-1990AY1992-1993
and AY2007-2008, the annual number of students served has ranged between approximately
38
Corporation for National and Community Service, Volunteering in America, The Role of the Federal Government,
Federal Work-Study Program, at http://www.nationalservice.gov/for_organizations/highered/fws.asp. Note: data are
not reported on tutoring and family literacy projects.
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640,000 and 760,000. However, by AY2009-2010640,000 and 760,000. However, by AY2012-2013, the number of Perkins Loan borrowers had
dropped to approximately 442,000. During most of502,000. In constant dollars, during the past two decades, average
Perkins Loan
amounts generallyinitially remained relatively level, then increased, reaching an average (in
constant dollars) of $2,703 in AY2003-2004. By AY2012-2013, however of $2,231 in AY2006-2007. However, by
AY2009-2010, average Perkins Loan
amounts had decreased to $1,852.
a low $2,014.
53
Corporation for National and Community Service, Annual Financial Report: Fiscal Year 2010, Table 3,
http://www.nationalservice.gov/sites/default/files/documents/11_1115_final_fy_10_afr_0.pdf.
Note: data are not reported on tutoring and family literacy projects.
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.
Figure 4. Perkins Loans: Number of Students Receiving Awards
and and
Average Award Amounts
(AY1989-1990 through AY2009-2010AY1992-1993 through AY2012-2013)
1,600,000
$3,000
1,400,000
Perkins Loans Awarded
1,200,000
$2,500
2,000
1,000,000
800,000
$1,500
600,000
$1,000
400
1,000
Average Perkins Loan
$2,500
$500
200,000
$-
19
89
19 -19
90 90
19 -19
91 91
19 -19
92 92
19 -19
93 93
19 -19
94 94
19 -19
95 95
19 -19
96 96
19 -19
97 97
19 -19
98 98
19 -19
99 99
20 -20
00 00
20 -20
01 01
20 -20
02 02
20 -20
03 03
20 -20
04 04
20 -20
05 05
20 -20
06 06
20 -20
07 07
20 -20
08 08
20 -20
09 09
-2
01
0
-
Students Served
Avg. Award
Avg. Award (2009 $s)
Source: ED, Federal Campus Based Programs Data Book, 2011, and prior editions.
During AY2009-2010, $818 million in Perkins Loans were made to approximately 442,000
students. At the end of AY2009-2010, the total net worth of the Perkins Loan fund of the 1,929
institutions that participate in the Perkins Loan program was nearly $8.6 billion. (Some IHEs
Perkins Loans Awarded
1,200,000
400,000
500
200,000
-
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
-
Students Served
Avg. Award (nominal $s)
Avg. Award (2012 $s)
Source: ED, Federal Campus-Based Data Book 2014; and prior editions.
During AY2012-2013, $1.1 billion in Perkins Loans were made to approximately 502,000
students. Some IHEs continue to service previously made Perkins Loans, but have stopped
making new loans.)
Perkins Loans cohort default rates (see previous discussion of Perkins Loans default and
rehabilitation) declined from a high of 12.95% for the AY1995-1996 cohort to
7.81% for the
AY2005-2006 cohort, before increasing again beginning with the AY2006-2007
cohort. (See Table 5.) cohort (see Table
5). Four-year institutions typically have the lowest cohort default rates, while
those of two-year
and proprietary institutions are much higher.
Congressional Research Service
22
Campus-Based Student Financial Aid Programs Under the Higher Education Act
Table 5. Perkins Loan Cohort Default Rates
(AY1995-1996 through AY2008-2009)
AY2011-2012)
c11173008
Year Borrowers Entered
Repayment
Cohort Default
Rate
AY1995-1996
12.95
AY1996-1997
12.48
AY1997-1998
11.54
Congressional Research Service
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Campus-Based Student Financial Aid Programs Under the Higher Education Act
.
Year Borrowers Entered
Repayment
Cohort Default
Rate
AY1998-1999
10.61
AY1999-2000
9.99
AY2000-2001
8.35
AY2001-2002
8.85
AY2002-2003
8.29
AY2003-2004
8.12
AY2004-2005
8.10
AY2005-2006
7.81
AY2006-2007
8.32
AY2007-2008
10.04
AY2008-2009
10.08
SourceAY2009-2010
10.45
AY2010-2011
11.09
AY2011-2012
10.67
Sources: ED, Federal Campus-Based Programs Data Books, 2011,Book 2014; and prior editions.
Author Contact Information
Alexandra Hegji
Analyst in Social Policy
adhegji@crs.loc.gov , 7-8384
c11173008
Congressional Research Service
David P. Smole
Specialist in Education Policy
dsmole@crs.loc.gov, 7-0624
Congressional Research Service
2324