Although Lawsuits Grab Headlines, National News Stories Highlight Key Elements of Perkins Program

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February 7, 2013 · by Wes · Spark Notes

Prepared by:  Harrison Wadsworth (hwadsworth@wpllc.net)

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Perkins Loans have been in the news this week, with Bloomberg News Service, National Public Radio and Bloomberg TV all running pieces on colleges suing their former students to collect defaulted Perkins Loans.  This began with the Bloomberg News Service Article, for which the reporter who wrote the article interviewed COHEAO as well as several COHEAO members over the course of several weeks.  That article led to the other two that appeared today.

For the Marketplace program on National Public Radio, COHEAO Executive Director Harrison Wadsworth was interviewed.  The Bloomberg TV segment consists of an interview with Justin Draeger, president of the National Association of Student Financial Aid Administrators, which ran this morning, Feb. 6, on the Market Watch program on the network.

Although the original intent of all three media reports was to highlight the seemingly surprising concept of colleges suing their alumni, in the end they also served to  highlight some key points about Perkins Loans.  First and foremost is that Perkins repayments make current and future students’ educations possible.  Another key point is that the federal government requires vigorous collection of Perkins Loans since they include federal funds.  A third point is that suing to collect Perkins is a last resort.  Our understanding, in fact, is that lawsuits are rare in general across the country.

It is possible that additional news outlets will decide to do their own reports, so we wanted to make sure COHEAO members know what is taking place.

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