July 15, 2004

On July 14, the House Appropriations Committee marked-up and approved the FY2005 Labor, Health and Human Services, and Education appropriations bill. Like the subcommittee, the full Appropriations Committee voted to eliminate the Perkins Loan Federal Capital Contribution and fund loan cancellations at $66.7 million, the same amount that was appropriated for FY2004.

The following is language from the House committee report on the bill.

Perkins Loan Capital Contributions
The bill does not include funding for new capital contributions to federal Perkins revolving loan funds, the same as the budget request. This program received $98,764,000 in fiscal year 2004. The committee is aware that the Perkins program currently has over $1,000,000,000 in its revolving fund that can be used to make new awards to students. In addition, the Committee believes that the combination of a low interest rate environment and the availability of the Federal Family Education Loan Program and the Federal Direct Student Loan Program make additional capital contributions unnecessary this year.

Perkins Loans Cancellations
The bill provides $66,665,000 for federal Perkins loans cancellations, the same as the budget request and the fiscal year 2004 amount. The Federal Government reimburses institutional Perkins revolving loan funds for loan cancellations permitted under Federal law. Loans may be canceled when the borrower pursues a career in one of 12 statutorily-designated professions including corrections, medical technical work, and peace corps or VISTA service.