WASHINGTON, D.C. (NEXSTAR) – A federal loan program offered at 1,500 schools is set to expire at the end of the month — unless Congress extends it. A bipartisan group of senators is working to save the program.
The federal government provides student loans in two ways — Stafford Loans and Perkins Loans.
Stafford is the main program that most people know. Students borrow from the government and pay the government back.
Perkins Loans are made up of federal funding but schools issue the loans, and students have to pay their college back.
About 500,000 students rely on Perkins Loans, which let low-income students borrow up to $5,500 a year. But it could be gone by the end of September.
“I know in some cases, it’s a lifeline,” Sen. Tammy Baldwin said.
Democratic Sen. Tammy Baldwin and Republican Sen. Rob Portman introduced a bill to extend the Perkins Loans program by at least two years.
In a statement, Portman said:
No one should be denied the chance to pursue higher education simply because of their financial status.”
Critics want Congress to let the program expire in order to streamline the student loan system.
“Why is Congress creating this complicated two-step process? Students are repaying their loans to two different entities — one to the government and one to the school — even though these are both federal loans,” said Jason Delisle, with the American Enterprise Institute.
Delisle said if Congress wants to make sure students have money for college, they should just let students borrow more in Stafford Loans so they only have to make one payment.
Baldwin said it’s not that simple.
“There is a real asset to having campus-based flexibility and not having everything run in a centralized fashion.”
The bill has several Republican and Democratic senators on board as co-sponsors. More than 160 lawmakers have signed on to a companion bill in the House.