Order Code RL31618
Campus-Based Student Financial Aid Programs
Under the Higher Education Act
Updated May 14, 2007
David P. Smole
Specialist in Social Legislation
Domestic Social Policy Division

Campus-Based Student Financial Aid Programs
Under the Higher Education Act
Summary
Three Higher Education Act (HEA) 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. Funding authorization for the campus-based and other
HEA programs is extended through June 30, 2007, under the Third Higher Education
Extension Act of 2006 (P.L. 109-292). Reauthorization of the HEA, including the
campus-based programs, is expected to be considered by the 110th Congress.
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 of
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 award criteria, such as that applicable for Pell Grants and subsidized
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 past
(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 having
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 need-based. At present, a relatively small proportion of all
students receive campus-based financial aid. Over the past decade, the number of
institutions participating in the programs has also declined.
The 110th Congress is expected to consider amending and extending the campus-
based programs as part of debate over reauthorizing the Higher Education Act. This
report will be updated to reflect legislative developments.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Program Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Federal Supplemental Educational Opportunity Grants . . . . . . . . . . . . . . . . 2
Allocation of Funds to Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Federal Work-Study Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FWS Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FWS Community Service Employment . . . . . . . . . . . . . . . . . . . . . . . . . 6
Job Location and Development Programs . . . . . . . . . . . . . . . . . . . . . . . 7
Federal and Non-Federal Shares of Compensation . . . . . . . . . . . . . . . . 7
Work-Colleges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Allocation of Funds to Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Federal Perkins Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Award Procedures and Terms of Perkins Loans . . . . . . . . . . . . . . . . . 10
Deferment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Forbearance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Loan Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Allocation of Funds to Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Distribution of Assets from Perkins Loan Funds . . . . . . . . . . . . . . . . . 15
Transfer of Funds Between Campus-Based Programs . . . . . . . . . . . . . . . . . 15
Administrative Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Funding and Program Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Funding for the Campus-Based Programs . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Institutional Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Students Served and Average Aid Amounts . . . . . . . . . . . . . . . . . . . . . . . . 19
FSEOG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
FWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Perkins Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
List of Figures
Figure 1. Institutions Participating in the Campus-Based Programs:
Award Years 1985-1986 through 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 2. FSEOG: Number of Students Receiving Awards
and Average Award Amounts, 1985-1986 through 2004-2005 . . . . . . . . . . 20
Figure 3. FWS: Number of Students Receiving Awards
and Average Award Amounts, 1985-1986 through 2004-2005 . . . . . . . . . . 21
Figure 4. Perkins Loans: Number of Students Receiving Awards
and Average Award Amounts, 1985-1986 through 2004-2005 . . . . . . . . . . 22

List of Tables
Table 1. FWS Requirements for Federal Share
of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 2. Perkins Loan Cancellation Rates by Type
of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 3. Administrative Cost Allowances
for the Campus-Based Programs: Award Year 2004-2005 . . . . . . . . . . . . . 16
Table 4. Campus-Based Program Funding:
FY1999-2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 6. Perkins Loan and FFEL/DL Cohort Default Rates:
1997-2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Campus-Based Student Financial Aid
Programs Under the Higher Education Act
Introduction
Three postsecondary student financial aid programs authorized under the Higher
Education Act of 1965, as amended (HEA) — 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 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 is determined by each institution’s financial
aid administrator according to institution-specific award criteria, rather than
according to non-discretionary award criteria, such as that applicable for Pell Grants
and subsidized Stafford Loans.1
Reauthorization of the HEA is expected to be considered by the 110th Congress.
The campus-based programs were last significantly amended under the Higher
Education Amendments of 1998 (P.L. 105-244), which reauthorized the programs
that are part of the HEA. While funding authorization for these programs expired at
the end of FY2003, the General Education Provisions Act (GEPA) provided for an
automatic one-year extension through FY2004. Authorization for the programs has
been extended incrementally, and ultimately through June 30, 2007, under a series
of Higher Education Extension Acts (P.L. 108-366, P.L. 109-81, P.L. 109-150, P.L.
109-212, P.L. 109-238, and P.L. 109-292). Several HEA programs were amended
under the Higher Education Reconciliation Act of 2005 (HERA), enacted as part of
the Deficit Reduction Act of 2006 (P.L. 109-171); however, the campus-based
programs were largely unaffected by this legislation.2
This report begins by providing a brief description of each of the campus-based
programs, including the terms under which financial aid is awarded to students and
the procedures under which federal funds are allocated to institutions for that
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 information on how the Deficit Reduction Act of 2006 affects HEA programs, see CRS
Report RS22308, Student Loans and FY2006 Budget Reconciliation, by Adam Stoll.

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purpose.3 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.
Current 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.
Federal Supplemental Educational Opportunity Grants
The FSEOG program authorizes the Secretary to grant funds to institutions of
higher education 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. 89-329),
served a similar purpose.
From the funds allotted to them by the Secretary, institutions award FSEOGs to
eligible students as part of their financial aid packages. Institutions are required to
award FSEOGs first to students with exceptional financial need, according to the
HEA need analysis provisions,4 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.”5 Categorization of awards
3 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.
4 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 post-service benefits under Title I of the National and Community
Service Act of 1990.
5 U.S. Department of Education, Federal Student Aid Handbook, 2006-2007, vol. 3 —
Calculating Awards & Packaging, pp. 3-95 through 3-97, at [http://www.ifap.ed.gov/
IFAPWebApp/currentSFAHandbooksPag.jsp], visited July 31, 2006. (Hereafter cited as
ED, FSA Handbook.)

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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.
FSEOGs consist 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-federal share of at least 25%. 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. ED has determined that all state scholarships and grants can be
counted toward meeting the non-federal share, except for funds provided under the
Leveraging Educational Assistance Partnership (LEAP) and the Special Leveraging
Educational Assistance Partnership (SLEAP) programs.6
Unlike the other two campus-based programs, students are eligible to receive
FSEOGs 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 independent students7 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 FSEOGs.
Allocation of Funds to Institutions. FSEOG funds are allocated to IHEs
according to procedures prescribed in the authorizing statute. Institutions first are
allocated funds 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.
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 which are not first- or second-time participants receive a base guarantee
that is the greater 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
6 ED, FSA Handbook, vol. 6 — Campus-Based Programs, pp. 6-13 through 6-15.
7 An independent student is one who is not considered dependent upon his or her parents’
income for financial aid purposes.

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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.8
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 of 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 and LEAP/SLEAP programs 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.9 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 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.10
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
8 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.
9 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 2006-2007 award year is available from ED at
[http://www.ifap.ed.gov/dpcletters/attachments/EFCAverages.xls], visited July 31, 2006.
10 Institutions may receive both an initial fair share increase and an additional fair share
increase, the latter being based on the reallocation of excess funds returned by other
institutions (described in the next section).

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programs authorized under HEA Title IV, Part A,11 to institutions from which 50%
or more of Pell Grant recipients either graduate or transfer to four-year institutions.
Federal Work-Study Programs12
The purpose of FWS is to provide part-time employment to undergraduate,
graduate, and professional students in need of earnings to pursue their course of
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. 88-452) 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 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.13 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.
FWS Employment. FWS employment may consist of work for the higher
education institution a student attends, for a private non-profit organization, for a
federal, state, or local public agency, or for a private 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;
11 HEA Title IV, Part A — Grants to Students in Attendance at Institutions of Higher
Education, includes the following programs: Pell Grants, TRIO, 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, and Learning Anytime Anywhere Partnerships.
12 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.
13 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.

CRS-6
(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 1938.14
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 abovementioned
requirements, also provide student services directly related to the student’s 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.15 In meeting the 7% requirement, institutions are required to ensure that
they are operating 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 for the operation of their FWS
community service 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 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, crime
prevention and control, recreation, rural development, and community
improvement;
14 HEA, § 443(b)(1) (42 U.S.C. § 2753(b)(1)).
15 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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(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.16
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 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.17
Job Location and Development Programs. Institutions may use up to
the lesser of 10% of their FWS allocation or $50,000 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 compliment 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.
Federal and Non-Federal Shares of Compensation. Under the FWS
program, 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.
16 HEA, § 441(c) (42 U.S.C. § 2751(c)).
17 ED, FSA Handbook, vol. 6 — Campus-Based Programs, pp. 6-27 through 6-44.

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Table 1. FWS Requirements for Federal Share of Compensation
Type of FWS
Maximum
Specific requirements
employment
federal share
FWS — In general
75%
General requirement
Private non-profit
May exceed
Employer selected for student on case-by-case
or government
75%, but not
basis and otherwise would be unable to afford
agency other than
exceed 90%,
cost of employment; and no more than 10% of
the institution
consistent with
the institution’s FWS students are employed in
regulations
jobs for which the federal share exceeds 75%
Regulatory
100%
Determination by the Secretary that federal
exceptiona
share in excess of 75% is necessary to further
the purpose of the FWS program
Private for-profit
50%
Employing for-profit organization must provide
sector
non-federal share of compensation
Tutoring and
100%
Priority given to employment of students in
Literacy Projects
projects funded under the Elementary and
Secondary Education Act (ESEA)
Work Colleges
50%
Separate funding authorization; institution must
match dollar-for-dollar with non-federal funds
Source: HEA, §§ 443, 444, 447, 448 (42 U.S.C. §§ 2753, 2754, 2756a, 2756b); and ED, FSA
Handbook
, vol. 6 — Campus-Based Programs, pp. 6-9 through 6-11.
a. Applicable for schools designated as eligible schools under the Developing Hispanic Serving
Institutions Program, the Strengthening Institutions Program, the American Indian Tribally
Controlled Colleges and Universities Program, the Alaska Native and Native Hawaiian-Serving
Institutions Program, the Strengthening Historically Black Colleges and Universities Program.
Work-Colleges. FWS authorizes funding to support comprehensive work-
learning programs at select institutions called “work-colleges.” Work-colleges are
institutions that make work-learning an integral part of their educational programs.
For an institution to qualify for the Work-Colleges program, all resident students
must be required by the institution to participate in a work-learning program that is
an integral part of its educational philosophy. For purposes of the program, work-
colleges can only be public or private nonprofit institutions and must have a
commitment of service to the community. Activities authorized under the Work-
Colleges program include those generally authorized under FWS grants, including
job location and development. In addition, Work-Colleges program funds may be
used to provide payments or credits to students participating in work-learning
programs, to promote and administer work-learning, and for the study of work-
learning programs. Funding for the Work-Colleges program is authorized separately
from the remainder of the FWS program. Institutions may transfer funds from the
FWS and Perkins Loan programs to the Work-Colleges program.
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 to institutions based on previous years’ allocations, with priority

CRS-9
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.18
Institutions that began participating after FY1999, but which are not first- or second-
time participants receive a base guarantee that is the greater 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 of the amount required to meet institutions’ base guarantee are
allocated according to institutions’ proportionate share of excess eligible need. For
the FWS program, excess eligible need is the amount by which an institution’s share
of self-help need (fair share) exceeds its base guarantee. Self-help need is calculated
separately for undergraduate students and 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 year 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, have their next year’s allocation
reduced by the amount returned.
18 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 for that year. These funds were awarded according
to criteria described below, to institutions that certified that they graduated or transferred
at least 50% of their Pell Grant recipients.

CRS-10
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 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 these 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 $4,000 for
undergraduate students and $6,000 for graduate and professional students. The
maximum aggregate amount that a student may borrow is limited to $20,000 in
unpaid principal for undergraduate students who have completed two years of study,
but who have not completed their baccalaureate degree; $40,000 for graduate and
professional students; and $8,000 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.19 However, no
interest accrues prior to a student beginning repayment, nor while repayment is
19 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%.

CRS-11
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 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 of
national emergency (for up to three years);20
! is experiencing economic hardship (for up to three years); or
! is engaged in a type of service that makes the borrower eligible for
loan cancellation (discussed later).
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.
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 services in
AmeriCorps or for reasons due to a “national military mobilization or other national
emergency.”21 Borrowers are required to request forbearance in writing. Forbearance
20 This provision applies to loans for which the first disbursement was made on or after July
1, 2001.
21 ED, FSA Handbook, vol. 6 — Campus-Based Programs, p. 6-75.

CRS-12
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.
Cancellation. Individuals who have engaged in the following types of public
service are eligible to have part or all of their loans canceled:22
! elementary or secondary school teacher at a public or private school
located within the school district of a local educational agency
(LEA) eligible for federal aid under Title I-A of the ESEA and in
which low-income students are more than 30% of the school’s
enrollment;23
! full-time staff member in a Head Start program;
! full-time special education teacher or a professional provider of
Individuals with Disabilities Education Act (IDEA) early
intervention services;
! member of the U.S. Armed Forces in an area of hostilities;
! Peace Corps or Americorps*VISTA volunteer;24
! full-time federal, state, or local law enforcement or corrections
officer (including prosecuting attorneys, but not public defenders);
! full-time teacher of mathematics, science, foreign languages,
bilingual education, or other shortage subject area;
! full-time nurse or medical technician; or
! full-time employee of a public or private nonprofit agency serving
high-risk children from low-income communities and their families.
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. 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.
(Funds for the reimbursement of Perkins Loan cancellations are appropriated
separately from funds for Perkins Loan FCCs.)
22 HEA, § 465(a) (20 U.S.C. § 1087ee(a)).
23 Teacher cancellations may be granted only to individuals teaching in a school serving
children from low-income families and which is listed in the Directory of Designated Low-
Income Schools for Teacher Cancellation Benefits
.
24 Borrowers who have received a national service education award for volunteer service
with Americorps under Title I-D of the National and Community Service Act of 1990 are
not eligible for loan cancellation benefits.

CRS-13
Table 2. Perkins Loan Cancellation Rates by Type of Service
Percent of Perkins Loan principal canceled
per year of service
Type of service
1st and 2nd
3rd and
5th year
Max.
years
4th years
and later
total
Elementary or secondary school
teacher in a designated low-income
15%
20%
30%
100%
school
Staff member in Head Start program
15%
15%
15%
100%
Special education teacher/IDEA
15%
20%
30%
100%
professional provider
Armed Forces in area of hostilities
12½%
12½%
N/A
50%
Peace Corps or Americorps*VISTA
15%
20%
N/A
70%
volunteer
Law enforcement or corrections
15%
20%
30%
100%
officer
Full-time teacher in shortage subject
15%
20%
30%
100%
area
Nurse or medical technician
15%
20%
30%
100%
Employee of provider of services to
15%
20%
30%
100%
high-risk children and families
Source: HEA, § 465 (20 U.S.C. § 1087ee).
A borrower’s liability to repay Perkins Loans is also canceled upon death or
becoming permanently and totally disabled, as determined according to regulations
issued by the Secretary. However, institutions are not reimbursed by the Secretary
for loans canceled due to death or disability.
Loan Default. 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 on Perkins Loans
received for attendance at that institution who default on their loans before the end
of the following award year.25 For institutions with less than 30 students entering
repayment in any year, the cohort default rate is calculated over a three-year period.
A borrower who has defaulted on a loan may rehabilitate the loan by making 12
consecutive on-time payments. Rehabilitated borrowers are returned to regular
25 HEA, § 462(g) [42 U.S.C. § 1087bb(g)].

CRS-14
repayment status, begin a new 10-year repayment schedule, and have the default
remove from their credit history. A borrower may rehabilitate a loan only once.
In certain instances where a school has followed due diligence procedures and
is unable to collect payments on a loan in which the amount owed is $25 or more, the
school may assign a Perkins Loan (or NDSL) for collection to Federal Student Aid
(FSA) Collections at ED. Upon accepting a loan, ED acquires all rights in the loan
and any payments made to the lending institution must be forwarded to ED.26 Any
collections on Perkins Loans referred, transferred, or assigned to ED are returned to
the U.S. Treasury.27
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 first 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 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.”
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 program in FY1999. These institutions are eligible to
receive 100% of their FY1999 allocation.28 Institutions that began participating in
the Perkins Loan program after FY1999, but which 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 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-capita 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.”
26 ED, FSA Handbook, vol. 6 — Campus-Based Programs, pp. 6-118 through 6-120.
27 The Secretary is authorized, but not required, to reallocate collections received on such
loans (less an amount not to exceed 30% to cover collection costs) to IHEs according to the
procedures for allocating federal capital contributions (described below).
28 According to the Department of Education’s Explanation of Worksheet 2006-2007 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.

CRS-15
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 separately for
undergraduate students, and graduate and professional students according to formulas
that take into account the institution’s COA and the approximate EFCs of students
attending the institution. However, for the Perkins program, an institution’s eligible
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).
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 regulation 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
participate in the Perkins Loan program or if authorization of the program expires
(discussed later in this report), institutions are required to begin a distribution of
assets from their revolving loan funds.29 Should either occur, institutions must repay
the Secretary a portion of the balance of their loan funds that is proportional to the
amount constituted by FCCs. In many instances, this percentage could range
between 85% and 90% of an institution’s Perkins Loan fund.30 In its FY2006,
FY2007, and FY2008 budget proposals, the Administration has recommended
terminating the Perkins Loan program.
Transfer of Funds Between Campus-Based Programs
Institutions are afforded flexibility in being able to transfer funds between the
campus-based programs in which they participate. They may transfer a total of 25%
of their allotment under the Perkins Loan program for use in the FSEOG or FWS
programs, or both. Institutions also may transfer up to 25% of their allotment under
the FWS program for use in the FSEOG program. However, no funds may be
transferred out of the FSEOG program.
29 HEA, Section 466 (20 U.S. C. § 1087ff).
30 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%.

CRS-16
Institutions generally have used their transfer authority to move funds to the
FSEOG program, primarily from FWS. For award year 2004-2005, based on data
reported to ED, 1,488 institutions participating in the FWS program transferred a
total of $92.7 million to the FSEOG program. Also in that year, 180 institutions
transferred $6.4 million from Perkins to FSEOG and 55 institutions transferred $1.9
million from Perkins to FWS.31
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 expenditures; plus
! 4% of the institution’s expenditures greater than $2.75 million and
less than $5.5 million; plus
! 3% of the institution’s expenditures in excess of $5.5 million.
In calculating administrative costs, institutions include both federal and institutional
expenditures.32 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.
Table 3. Administrative Cost Allowances for the
Campus-Based Programs: Award Year 2004-2005
Campus-based
Administrative cost
program
allowance
FSEOG
$15,941,556
FWS
55,667,626
Perkins Loans
77,145,221
Total
148,754,403
Source: U.S. Department of Education, Office of Postsecondary Education, Federal Campus-Based
Programs Data Book 2006
.
31 U.S. Department of Education, Office of Postsecondary Education, Federal Campus-
Based Programs Data Book 2006
, at [http://www.ed.gov/finaid/prof/resources/data/
databook2006/databook2006.html], visited July 31, 2006. (Hereafter cited as ED, Federal
Campus-Based Programs Data Book, 2006
.)
32 HEA, § 489 (20 U.S.C. § 1096); ED, FSA Handbook, vol. 6 — Campus-Based Programs,
pp. 6-25 through 6-26.

CRS-17
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 campus-based aid according to student and
institutional characteristics.
Funding for the Campus-Based Programs
The share of postsecondary student financial aid provided through the campus-
based programs has decreased steadily over the past 30 years. According to the
College Board, whereas in the 1971-1972 award year, 19.7% of total federal student
aid was provided through the campus-based programs, preliminary figures indicate
that only 3.3% was in academic year 2005-2006.33 Now the greatest proportion of
student aid is provided through federal loans (other than Perkins Loans) and an
increasing amount is provided through higher education tax benefits. Over the past
several years, funding has increased modestly for the FSEOG program, while funding
for the FWS and Perkins Loan programs (FCCs and loan cancellations) has
decreased. FY2004 was the last fiscal year in which discretionary funding was
appropriated for Perkins FCCs. Annual funding levels for each of the campus-based
programs, beginning with FY1999 (the first year since the last HEA reauthorization),
are presented in Table 4.
Under each of the campus-based programs federal funds are 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 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.
33 The College Board, Trends in Student Aid 2006, “Online Table 1 (History), Aid Used to
Finance Postsecondary Education Expenses in Current Dollars (in Millions), 1963-64 to
2005-06,” 2006, at [http://www.collegeboard.com/prod_downloads/press/cost06/06-aid_
charts.xls], visited January 25, 2007.

CRS-18
Table 4. Campus-Based Program Funding: FY1999-2008
(in thousands of dollars)
Perkins-
Perkins Loan
Fiscal year funding
FSEOG
FWS
FCC
cancellations
1999 Appropriation
$619,000
$870,000
$100,000
$30,000
2000 Appropriationa
631,000
934,000
100,000
30,000
2001 Appropriation
691,000
1,011,000
100,000
60,000
2002 Appropriation
725,000
1,011,000
100,000
67,500
2003 Appropriation
760,028
1,004,428
99,350
67,061
2004 Appropriation
770,455
998,502
98,764
66,665
2005 Appropriation
778,720
990,257
0
66,132
2006 Appropriationb
775,462
999,523
4,731
65,471
2007 Appropriation
770,933
980,354
0
65,471
2008 Budget request
0
980,492
0
0
Sources: U.S. Department of Education, Budget Service, FY2008 President’s Budget; and historical
tables.
a. FSEOG includes a $10 million emergency appropriation for victims of Hurricanes Dennis and
Floyd.
b. Includes a mandatory reappropriation of $28,429 million in expired FY2005 funds pursuant to the
National Disaster Student Aid Fairness Act (P.L. 109-86).

Institutional Participation
In fall of 2004, 6,617 postsecondary institutions were eligible to participate in
HEA Title IV financial aid programs.34 During award year 2004-2005,
approximately 58% of Title IV-eligible institutions participated in the FSEOG
program, while approximately 51% participated in FWS. However, only
approximately 27% of Title IV institutions participated in 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.35 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.
34 U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System (IPEDS), Peer Analysis System, 2004.
35 ED, Federal Campus-Based Programs Data Book, 2004.

CRS-19
Over the past decade, there has been a slight increase in the number of
institutions 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 two decades. Figure 1 displays the number
of institutions participating in each of the campus-based programs since the 1984-
1985 award year.
Figure 1. Institutions Participating in the Campus-Based Programs:
Award Years 1985-1986 through 2006-2007
5,000
4,000
s 3,000
n
tio
u
tit
s
2,000
In
1,000
-
86
88
90
92
06
19
1987 19
-1989 19
-1991 19
-1993 -1994 -1995 -1996 -1997 -1998 -1999 -2000 2001 -2002 2003 -2004 2005 20
2007
88
90
92
93
94
95
96
97
98
99
01
03
1985- 1986- 1987- 19
1989- 19
1991- 19
19
19
19
19
19
19
19
2000- 20
2002- 20
2004- 2005- 2006-
Award Year
Sources: ED, Federal Campus-Based Programs Data Book, 2005; and
ED, Federal Campus-Based Programs Data Book, 2006.

FSEOG
FWS
Perkins
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 2004 dollars according to the consumer price
index for all urban consumers (CPI-U).
FSEOG. FSEOG program data on the number of students granted awards and
the average award amount since the 1985-1986 award year (in constant 2004 dollars)
are presented in Figure 2. Once the smallest of the three campus-based 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 award
year 1989-1990, 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, reaching 1.4 million in 2004-2005 (more
than twice as many students as received awards in 1985-1986). 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

CRS-20
increased from $598 in 1985-1986 to $756 in 2004-2005. However, in constant
dollars, award amounts have declined by 28%.
Figure 2. FSEOG: Number of Students Receiving Awards and
Average Award Amounts, 1985-1986 through 2004-2005
1,500,000
$2,500
1,250,000
$2,000
d
te

ard
1,000,000
ran
w
G
$1,500
A
G

rds
O
750,000
a
E
w
A

$1,000
G
e FS
O
500,000
E
erag
FS
Av
$500
250,000
0
$-
6
7
9
0
2
3
5
6
7
8
9
0
1
2
3
4
5
-8
-88
-8
-91
-9
-94
-9
-9
-9
-0
-0
-0
85
6-8 87 88
9-9 90 91
2-9 93 94
5-9
97
8-9 200 00
1-0
03
4-0
19
198 19
19
198 19
19
199 19
19
199 1996 19
199 99-
20
200 2002 20
200
19
Students Served
Avg. Award
Avg. Award (2004 $'s)
Source: U.S. Department of Education. Office of Postsecondary Education. Federal Campus-Based
Programs Data Book 2006.

FWS. FWS program data are presented in Figure 3. For most of the past two
decades, between 650,000 and 750,000 students have been served annually through
FWS; however, in recent years there has been a marked increase in participation —
more than 810,000 students received FWS aid in 2004-2005. Since the mid-1980s,
the average FWS award has increased from $901 in 1985-1986 to $1,335 in 2004-
2005. However, when adjusted for inflation, this amounts to a decrease of 16.2% in
constant dollars. From the 1994-1995 award year through the 1999-2000 award year,
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 award year 2000-2001, institutions are now
required to expend 7% of their FWS allotment on community service and to 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 award year 1994-1995 to 135,758 in
award year 2004-2005. The shaded portion of the bars in Figure 3 indicates the
number of students employed in community service.

CRS-21
Figure 3. FWS: Number of Students Receiving Awards and
Average Award Amounts, 1985-1986 through 2004-2005
1,500,000
$2,500
1,250,000
$2,000
d
te

rd
1,000,000
a
w

ran
$1,500
A
G
S
750,000
ards
w

$1,000
rage FW
500,000
S A
e
v

FW
A
$500
250,000
0
$-
86
87
88
89
-90
91
92
93
94
95
96
97
-98
99
01
02
03
04
05
85-
86-
88-
89
90-
91-
92-
93-
94-
96-
97
98-
2000 00- 01- 02-
04-
19
19
1987- 19
19
19
19
19
19
19
1995- 19
19
19
99-
20
20
20
2003- 20
19
Students Served
Students in Community Service
Avg. Award
Avg. Award (2004 $'s)
Source: U.S. Department of Education. Office of Postsecondary Education. Federal Campus-Based
Programs Data Book 2006.

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.
Information on the expenditure of FWS funds for community service, by IHE for
AY2004-2005, 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 15.75% of their allocations to compensate students
employed in community service jobs. Of 3,323 IHEs reporting data for AY2004-
2005, 3,011 (90.6%) either met the 7% expenditure requirement or received a
waiver.36
Perkins Loans. Historical data on the Perkins Loan program are provided in
Figure 4. Slightly fewer students receive aid through the Perkins Loan program than
through FWS, making it the smallest of the three campus-based programs in terms
of number of students served.
36 Corporation for National and Community Service, Volunteering in America, The Role of
the Federal Government, Federal Work-Study Program, at [http://www.nationalservice.gov/
about/volunteering/federal.asp], visited May 14, 2007. Note: data are not reported on
tutoring and family literacy projects.

CRS-22
Since 1985-1986, the annual number of students served has averaged between
630,000 and 760,000. The average Perkins Loan amount, however, is considerably
greater than the amount of aid provided under either FSEOG or FWS. Over the past
two decades, average Perkins Loan amounts have more than doubled, increasing
from $1,003 in 1985-1986 to $2,206 in 2004-2005. In constant dollars, this
represents an increase of 25.3%.
Figure 4. Perkins Loans: Number of Students Receiving Awards and
Average Award Amounts, 1985-1986 through 2004-2005
1,500,000
$2,500
1,250,000
$2,000
d
n
1,000,000
arde
s Loa
w
$1,500
n
s A
rki
750,000
e
an
o

e P
L
$1,000
s
500,000
n
erag
rki
e

Av
P
$500
250,000
0
$-
6
9
0
3
8
9
0
2
5
5-8
-87
-88
-8
-9
-91
-92
-94
-95
-96
-97
-9
-9
-01
-03
-04
-0
86
87
89
90
91
2-9 93 94 95 96
98
200 00
1-0 02 03
198 19
19
1988 19
19
19
199 19
19
19
19
1997 19
99-
20
200 20
20
2004
19
Students Served
Avg. Award
Avg. Award (2004 $'s)
Source: U.S. Department of Education. Office of Postsecondary Education. Federal Campus-Based
Programs Data Book 2006.

Perkins Loans cohort default rates have declined from a high of 12.95% in 1997
to 8.12% in 2005. (See Table 6.) Four-year institutions typically have the lowest
cohort default rates, while those of two-year and proprietary institutions are much
higher. In comparison, FFEL/Direct Loan cohort default rates typically have been
a few percentage points lower than rates for Perkins Loans.37 At the end of FY2004,
the Administration reported a total of $1.2 billion in outstanding defaulted Perkins
Loans, with $321 million of this amount assigned to ED for collection.38
37 U.S. Department of Education, National Student Loan Default Rates, at [http://www.ed.
gov/offices/OSFAP/defaultmanagement/defaultrates.html].
38 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2005 — Appendix
, “Department of Education, Office of Student Financial Assistance,” p.
361.

CRS-23
Table 6. Perkins Loan and FFEL/DL Cohort Default Rates:
1997-2005
Loan type
1997
1998
1999
2000
2001
2002
2003
2004
2005
Perkins Loansa
12.95
12.48
11.54
10.61
9.99
8.35
8.85
8.29
8.12
FFEL/DLb
10.4
9.6
8.8
6.9
5.6
5.9
5.4
5.2
4.5
Sources: ED, Federal Campus-Based Programs Data Books, 1997 through 2006; U.S. Department
of Education, Official Cohort Default Rates for Schools, National Student Loan Default Rates.
a. Perkins Loan cohort default rates are for the two-year period ending June 30 of the year indicated.
b. FFEL/DL cohort default rates are for the two-year period ending Sept. 30 of the year indicated.