Overview
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Overview

As you most likely are aware, President Bush did not include the Perkins Loan Program in the FY2006 budget he submitted to Congress on February 7, 2005. Even before the official announcement was made, Mike Carey, President of Campus Partners, and Paul Carey, our Chairman, had begun strategizing and writing letters to elected officials. Fighting for the Perkins program is one of our highest priorities, with Paul Carey taking the lead in our advocacy efforts.

For now, the elimination of the Perkins program is only a proposal. The House and Senate must approve the budget, and the process will probably take months. However, it is important to act now to protest this provision of the budget.

The proposed elimination of the Perkins program is among many other programs that have been targeted for elimination or reduction. Politicians commonly will propose program cuts, knowing that not all programs targeted will be eliminated. Public opinion is always considered in making final decisions. If senators and representatives from across the country are inundated by telephone calls, letters, e-mails, and office visits advocating for Perkins, they cannot ignore the importance of the program.

In a classic case of robbing Peter to pay Paul, the budget shifts Perkins funding to the Pell grant program. Demand for financial aid from both programs currently exceeds supply, and both must be funded. Choosing between the programs would be akin to forcing a cook to decide between having a stove or refrigerator in the kitchen. The Perkins program is relatively self-sustaining and allows leveraging of funds by requiring colleges to match federal dollars. Pell grants do not have to be repaid. After the Perkins fund is depleted, what will happen to the Pell program? Please make sure that your delegation understands that using Perkins dollars to fund Pell grants is a no-win situation for all.

Letters coming from student loan administrators will have a great impact on lawmakers. If you can cite figures indicating how many students will not receive enough funding to enroll in school or stay in college if Perkins is eliminated, your representative or senator will listen. We urge you to not only contact your representatives and senators, but also call on you to encourage your colleagues, students, and borrowers in repayment to contact them as well. Putting a human face on the Perkins program and its impact on students and the university will be effective.

Our company has already taken a leadership role in advocating for the Perkins program. Since we heard that funding was threatened last summer, we have been alerting colleges and universities of the need to act. Please see the attached list of actions that Campus Partners has already undertaken.

                       ATTACHMENT: Previous Perkins Funding Response

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COHEAO Annual Meeting Update

Although the COHEAO Annual Meeting was held before President Bush submitted his budget for FY 2006, which proposed the elimination of the Perkins Loan Program, COHEAO announced attendance at this year’s annual meeting broke all records. Campus Partners was well represented with Sharon Cameron, Audit and Compliance Specialist; Lisa Koniuto, Director, Sales and Marketing; Mark Olson, Executive Vice President; Sales and Marketing; and Brad Resler, our new Account Executive, in attendance.

In talking to other attendees at the conference, it was apparent that everyone shared a growing concern over the future of the Federal Perkins program. Along with the prior news of zero funding for the Perkins program in FY 2005, there were rumblings at the conference of a possible proposal to eliminate the Perkins program altogether. The following week, on February 7, 2005, the proposal to eliminate Perkins was announced.

One of the primary reasons behind the President’s proposal to eliminate the program largely rests on the Office of Management and Budget’s assessment of the program derived from use of the Program Assessment Rating Tool (PART). Used to evaluate many Federal programs, the PART evaluation deemed the Perkins Loan Program “ineffective.” Despite letters to the Department of Education and other attempts by COHEAO members to point out the flaws in the application of the PART to the Perkins program, Pam Moran, Senior Program Specialist at ED, addressed the group and told us that the Perkins Program had been deemed “redundant and duplicative.” Another speaker, John Dean, Principal, at Washington Partners, LLC, expressed his opinion of the PART assessment by tossing it on the floor. Before entering private practice, Dean was Associate Counsel to the Committee on Education and the Workforce of the US House of Representatives.

Mark Olson used the opportunity to network with leaders from other student loan servicers at the conference. He united with three other major servicers at the conference and took the lead in drafting a letter to the Department of Education. The letter, which has since been mailed, offered assistance in providing better data to ED to improve the scoring of the PART analysis. Mark also took this opportunity to reiterate how important the Perkins program is to students and schools and how the program “provides critical loan funds to over 630,000 needy students attending some 1,800 schools.”

William “Bud” Blakey, a partner in the Dean Blakey, Washington, D.C. law firm, gave an inspiring speech during a luncheon presentation to help prepare attendees planning to make visits to Capitol Hill to lobby for the Perkins Program. “It’s not about zero FCC, it’s about the students,” Blakey told the group. He suggested

that lobbying efforts focus on students who would not be able to enroll in college or complete their current education without the support of this most critical piece to the financial aid pie. Representatives from colleges and universities were encouraged to compile and present firm estimates of actual numbers of students who would be affected at their institution.

The conference ended with a breakfast on Capitol Hill. Speakers at the breakfast included Representative Ralph Regula (R-OH), Chairman of the House Appropriations Subcommittee on Labor, Health and Human Services and Education, and Representative Stephanie Hersth (D-SD). Both speakers shared with the group their show of support for education funding. Rep. Hersth said that she is a strong supporter of the Perkins Loan program and plans to work hard to preserve and fund it in Congress.

Following the breakfast, our staff visited the offices of North Carolina Senators Richard Burr and Elizabeth Dole to encourage them to support the Perkins Program. Using hard data furnished from one of our customers, we took the advice of Bud Blakey and translated the effect of zero funding for FY 2005 (not program elimination) in terms of impact on students. We passed along one of our customer’s estimate that 166 incoming freshman at her institution would not be able to fund their education (based on an average loan of $3,000), and 250 seniors (based on an average loan of $2,000) would not be able to complete their education without the support of the federal dollars.

Campus Partners is soliciting this type of information from our customers to share with representatives as a follow up to our visit. Gathering specific information on the impact of the program’s elimination on your campus and sharing it with senators and representatives from your state will make a big impression in supporting the continued funding of the Federal Perkins program.

Campus Partners is not the only entity of the opinion that the Administration’s proposal at best is robbing Peter to pay Paul. In an article published in the Wall Street Journal “President Bush wants to put more aid money in college students’ pockets,” The Wall Street Journal reports. “Here’s the hard part: Deciding whose pocket to take the money out of first.”

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Reauthorization of the Higher Education Act

On February 2, 2005, House Education and Workforce Committee Chairman John Boehner (R-OH), re-introduced legislation to reauthorize the Higher Education Act. The College Access and Opportunity Act (H.R. 507) seeks to restore the HEA’s original focus, which is to help low and middle-income students in danger of being denied access to a college education. The bill not only reauthorized Perkins at least until 2012, it also increased loan limits significantly and made other changes that had been suggested to make the program more efficient. Of course, this legislation has not been passed.

“We need to reform federal higher education aid programs to put incoming, low and middle-income students back at the front of the line,” Boehner said. “The Higher Education Act’s first mission is to improve college access for low and middle-income students. It has drifted away from that focus over the years, at the expense of the very students it was written to serve. We’ve got to change that.”

It will be up to Boehner and his committee, along with Senate Health, Education, Labor and Pensions Committee Chairman Mike Enzi (R-WY) and his committee to draft the Higher Education Act reauthorization legislation. Other members of the House Education and Workforce Committee are listed at the following link: http://edworkforce.house.gov/members/109th/mem-fc.htm.

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