The Honorable Tom Harkin s1

Coalition of Higher Education Assistance Organizations 1101 Vermont Avenue N.W., Suite 400 Washington, D.C. 20005-3586 (202) 289-3910 Fax (202) 371-0197

May 24, 2012

The Honorable Tom Harkin Chairman Senate Appropriations Committee 731 Hart Senate Office Building Washington, DC 20510

Dear Senator Harkin:

On behalf of members the Coalition of Higher Education Assistance Organizations (COHEAO) and the students we serve, we encourage you to support and fund the Perkins Loan Program for FY 2013 in the Department of Education budget. The Perkins program plays a critical role in our nation’s financial aid system, especially for the lowest-income students. We strongly urge you to meet the federal obligation to reimburse campus Perkins Loan funds for cancellations and restore funding for the Perkins Loan Federal Capital Contribution to its authorized level. The cancellation shortfall is now more than $250 million and growing. This is a critical need that should be dealt with this year.

Congress has established unique Perkins Loan cancellation provisions that greatly benefit the neediest students. Several cancellation categories were added with almost unanimous support as recently as 2008. The Higher Education Act requires the Secretary of Education to reimburse institutions’ Perkins Loan revolving funds for cancelled loans.

Perkins Loan borrowers who work in key public service professions in areas of national need, such as teaching, nursing, the military, law enforcement, corrections and the Peace Corps are eligible for loan cancellation. Providing adequate funding for loan cancellations will reimburse schools for the loans they are required by law to cancel. When the funds are not replenished, current and future students lose out on the opportunity to borrow low-cost loan funds with the benefits that Perkins Loans offer.

This year is especially important because recent reductions in eligibility for Pell Grants means thousands of students throughout the country, many of whom are nearing graduation, are about to have their federal grants cut off. For these students, Perkins Loans can fill that financing gap and make the difference between obtaining a diploma or not.

The Administration has said it also supports the mission of the Perkins Loan Program, but the lack of cancellation reimbursements is depleting campus-based loan funds. To date, there are $259 million in unpaid cancellations, a particularly significant sum for a program that extends $1 billion in low-cost financing to students on an annual basis. The Federal Capital Contribution should be restored. Its funding is an essential and extremely efficient use of federal funds because schools contribute matching funds to increase the availability of loans. For example, a capital contribution of only $100 million nationwide will create at least $133 million in low-cost loan funds and likely more since many schools put more than the minimum match into Perkins Loans. Perkins loan capital is used again and again as loans are repaid and re-lent to make college possible for needy students. Without the federal contribution and its minimum school matches, tens of thousands of additional low-income students across the country won’t receive the loans they need for higher education. We urge you to fund the capital contribution this year. The authorized level is $300 million for FY 2013.

COHEAO is a coalition of some 300 colleges, universities and commercial organizations with a shared interest in fostering improved access to postsecondary education, particularly through the Perkins Loan Program. Since the Perkins Loan Program was created in 1958 as the National Defense Student Loan Program, it has served millions of students, including many members of Congress, making the crucial difference that made higher education possible. Today, Perkins Loans remain a key tool for financial aid administrators to tailor aid to their students. Schools also collect loan repayments, keeping them in touch with their former students so that they can offer advice and counseling as they enter loan repayment. These students are often the first from their family to attend college and usually have the greatest financial need.

On behalf of COHEAO members and the students we serve, we urge you to reimburse campuses for cancelled loans so that current and future students can have the same opportunity to achieve and benefit from a higher education. It is important to students and important to our country.

Sincerely,

Bob Perrin President, Coalition of Higher Education Assistance Organizations [email protected]

Maria Livolsi Vice President, Coalition of Higher Education Assistance Organization [email protected]

Harrison Wadsworth Executive Director, Coalition of Higher Education Assistance Organizations [email protected]

On behalf of the members of the Coalition of Higher Education Assistance Organizations.

2 Coalition of Higher Education Assistance Organizations Board of Directors

Alisa Abadinsky Bob Frick Drexel University NCO Financial Systems, Inc.

Lori Hartung Pamela Devitt Todd, Bremer & Lawson University of Illinois, Springfield

Jeane Olson Jackie Ito-Woo University of Northern Arizona University of California Office of the President

Maria Livolsi Lee Ann Wigdahl State University of New York Devry University

Carl Perry Tom Schmidt Progressive Financial Services University of Minnesota

Edgar DelosAngeles Karen Reddick University of California—Irvine National Credit Management

Nancy Paris Laurie Beets Xerox, Inc. Oklahoma State University

Michael Mietelski Rick Wiening Conserv Regional Adjustment Bureau

Michael Kahler Robert Perrin Windham Professionals Williams and Fudge Inc.

David Stocker Account Control Technology