U.S. Rep. Elise Stefanik, R-Willsboro, is building momentum behind her effort to continue the oldest federal college financial aid program.
As of Friday, Stefanik had 56 co-sponsors — 42 Democrats and 14 Republicans — on legislation she introduced in mid-May to extend the authorization for colleges to issue federal Perkins Loans through the 2020-21 academic year.
That includes 42 new co-sponsors so far this month.
If the program is not extended, the authorization would expire Sept. 30, with the 2018-19 academic year the last year the loans would be available.
“Perkins Loans are an incredibly important resource for low-income families,” Stefanik said in a telephone interview on Friday.
Stefanik said the program is advantageous because colleges have “skin in the game.”
The Perkins Loan program is a “campus-based” revolving loan fund, operating similar to many federal economic development loan programs.
The college must match at least 33 percent of federal funding invested in the loan fund, which individual participating colleges administer.
If the program is not extended, about $164 million in assistance to about 75,000 students in New York state would be lost, according to The Commission on Independent Colleges & Universities in New York, an advocacy organization.
At The College of Saint Rose in Albany, 10 percent of undergraduate students receive Perkins Loans, said Steven Dwire, the college’s assistant vice president for financial aid.
The program has a low fixed interest rate of 5 percent with no origination fees, and no interest is accrued as long as a student is attending college at least half time, Dwire said.
It is one of the few public financial resources available for students who attend college less than half time, although interest does accrue on their loans, he said.
Most every administration, dating back as far as President Ronald Reagan, have targeted the program for elimination, in the interest of streamlining and simplifying myriad federal higher education finance programs, but failed to gain support from Congress, said Tim Powers, director of student aid policy for the National Association of Independent Colleges and Universities.
Stefanik said the point of her legislation is not just to keep the program on life support for two more years, but to send a message that it is an important concept to keep in the federal financial aid portfolio.
“I believe this legislation shows a commitment to the future of Perkins Loans,” she said.
Stefanik’s legislation would not require any new federal funding.
It would just allow colleges to make loans from money previous loan recipients had repaid.
The federal government stopped making new appropriations to the Perkins Loan program around 2004, and stopped reimbursing colleges for loan forgiveness in the 2010 federal fiscal year, Power said.
Perkins Loans are forgiven if recipients become public school teachers or enter other “public servant” careers such as police officers, Dwire said.
The challenge, Powers said, is that since 2008, the federal Congressional Budget Office has factored into its budget projections the estimated revenue the federal government would receive if the program expired and colleges began repaying their previous federal allocations.
So Congress has to find ways to offset that loss of anticipated revenues.
“On paper, it costs the government money, but, in fact, it doesn’t cost the government anything,” he said.
The program, originally known as the National Defense student loan program, was established in the late 1950s to attract more people into the teaching field, Powers said.
“This was kind of the American response to the USSR launching Sputnik (the first space satellite,)” Powers said. “You had a bunch of representatives who got together and realized that this technological edge that United States had was sort of eroding.”
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