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ExpectMore.govExpectMore.gov home pageEXPECT FEDERAL PROGRAMS TO PERFORM WELL, AND BETTER EVERY YEAR.
 
Program Assessment

Program

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Federal Perkins Loans

Under the Perkins Loan program, the Education Department provides funding to colleges and universities to make low-interest loans available to needy students. Loans are made from institutional revolving funds consisting of Federal contributions, institutional matching funds, and student repayments.

Rating

What This Rating Means

NOT PERFORMING
Ineffective

Programs receiving this rating are not using your tax dollars effectively. Ineffective programs have been unable to achieve results due to a lack of clarity regarding the program's purpose or goals, poor management, or some other significant weakness.
  • The Perkins Loan program is redundant and duplicative, given the broad availability of need-based, subsidized, relatively low-interest loans through the two larger student loan programs (Federal Family Education Loans and Ford Direct Student Loans). These other programs provide nearly $80 billion in new annual loan volume, while Perkins Loans provide only $1 billion.
  • The statutory program funding allocation formula does not accurately reflect changes in the population of needy students. The current formula allocates aid largely on the basis of past institutional award levels, benefiting the schools that have participated in the program the longest.

Improvement Plan

About Improvement Plans

We are taking the following actions to improve the performance of the program:

  • Working with Congress to eliminate funding for this program and redirect funds to more effective student aid programs, such as Pell Grants.
  • Correcting the funding allocation formula to ensure that funds reach postsecondary institutions with the highest proportion of needy students
  • Implementing a new program measurement approach that tracks program success on student persistence (i.e., staying in school) and graduation.

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