The 2,178 students at Washington University who receive Perkins Loans may have to look elsewhere for financial aid if President Bush has his way.

In his 2006 budget released Monday, Bush proposed phasing out the federal Perkins Loan program over a period of 10 years. This new financial maneuver would substantially change how students apply for federal loans and grants in the future.

“It was a shock,” said Bill Witbrodt, director of Student Financial Services at Washington University. “We knew that the government was going to eliminate further contributions to the fund, and we were modeling the impact of that over the next 10 years-but now we have to pay back all of the federal money that the government’s given us for the Perkins Fund. That changes things dramatically.”

The Perkins Loan program allows both undergraduate and graduate students to take out a low-interest loan of five percent if they are eligible for financial aid. Schools lend students the money with government and school funds. Students must pay back the loan within nine months of completing their education unless they are in the military or have mitigating circumstances, in which case their grace period can be extended up to ten years. Schools then recycle the money into new Perkins Loans.

Undergraduates can receive up to $4,000 a year in loans while graduates can loan up to $6,000 a year.

Bush plans to divert the money saved from the elimination of Perkins Loans to Pell Grants, a program that will soon target very low-income students. The new Pell Grant program, if passed by Congress, will increase the maximum amount eligible students can receive by $500 over the next five years to $4,550 a year.

“This legislation is aimed at a broader base of students,” said Witbrodt. “The President’s goal is to help very low-income students attend community colleges and trade schools and as well as other lower-cost institutions that weren’t previously eligible to receive Perkins funds.”

In essence, only a small number of four-year institutions were eligible to receive Perkins funds.

This is the first time that the president-who is reducing the education budget by one percent to $56 billion-has reduced the education budget since he took office in 2000. He has also proposed cutting 150 nationwide programs, 48 of which are in the education department.

Sophomore Bobby Jones, a student at the University who has a Perkins Loan, voiced his disapproval at the proposed elimination of the program.

“Who will benefit more?” he said, questioning Bush’s proposal. Jones believes that the students who receive loans should be “the people who are able to give back the most to society.”

“I know a lot of people who were in the top 10 percent of my high school class who had to go to Missouri State University [because they couldn't afford to go to elsewhere],” Jones said.

Now many of his friends, who could not manage the price spike at MSU their sophomore year, are attending community colleges instead.

“I don’t want to see that happen to other people,” Jones said.

Washington University senior Michael Hernandez, who also has a Perkins Loan, noted that while he only receives $1,000 a year from the program, it “adds up over the years.”

“It definitely helps a lot because I also have a sibling who goes to college who’s younger than me, so money’s really tight in my family right now,” he said. “I have scholarships here and I had outside scholarships to come here, but I also applied for this loan.”

Witbrodt will be sad to see the federal loan program crossed out of the budget.

“I think the Perkins Loan has been a wonderful program for Washington University. It’s been a very important part of our students’ financial assistance,” he said.

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