Last week, the National Association of Student Financial Aid Administrators (NASFAA) published the results of a “quick scan” member survey about proposed changes to the Perkins Loan Program. Overall, the 680-plus respondents seemed opposed to the reforms, with 80 percent saying they would prefer just expanding the existing Perkins program. Over 50 percent also raised concerns that certain factors would prohibit them from participating in the new program.

But taking the survey results at face value is difficult because of the existing dynamics within the program. In the past, Perkins expansions have tended to benefit prior recipients through clauses guaranteeing them a share of new money or preserving allocations from year to year. An institution’s sector also matters for Perkins loans, as four-year public and private not-for-profit schools disburse as much as 95 percent of the loans (XLS).

Curious to see how Perkins reform opposition broke down by sector and participation status, we asked NASFAA for disaggregated response information, which it provided to us. The data are discussed below.

Not surprisingly, institutions that do not currently participate in the Perkins loan program approved of the proposed reforms at a far higher rate than those already involved in the existing program. Of the 118 respondents that do not participate in the program, 45 percent were in favor of the proposed changes, while 55 percent said they would prefer increasing the existing Perkins program. By contrast, just 15 percent of participating institutions expressed a preference for the new program, versus 85 percent in favor of expansion.

Because the overall sample skewed toward current Perkins participants, it is hard to parse non-participants’ impressions of the program by sector. For example, only 40 of the481  four-year or above institutions that responded did not already participate in the program. Of those, 23 said they were in favor of the reforms, while 17 opposed. For two-year institutions, the results were flipped, with 42 of the 69 non-participants favoring increases to the Perkins program, while 27 favored the reforms.

Not surprisingly, when faced with the choice between a new Perkins loan program and increased Stafford loan limits, respondents of all types overwhelmingly favored the latter option. Administratively this makes sense, as raising Stafford limits would not require the implementation of new requirements or the addition of any institutional matching funds. Among non-participating schools, 19 percent favored the new Perkins program over loan limit increases—a rate roughly identical to the 20 percent of participants that favored the proposed program.

The sector with the highest preference for the new program was two-year schools, where 22 percent of non-participants and 33 percent of participants both said they would choose the reformed program over loan limit increases. This may be explained by the fact that some two-year institutions are afraid that raising loan limits would put them at greater risk of exceeding loan default rate thresholds that could jeopardize their ability to offer federal student aid.

A significant factor driving institutional opposition to the Perkins loan program appears to be the matching funds requirement, in which schools would deposit money each quarter to cover some of the loan costs. The exact amount is not specified, though current participants must contribute an amount equal to one-third of the federal funds they receive. Just 19 respondents said they support or strongly support the matching fund requirement. By contrast, 85 percent of all respondents said they opposed or strongly opposed the matching requirement, with only small differences based upon participation status.

It makes sense that institutions that don’t currently have Perkins funds would be against the matching requirement, because it might be a reason why they do not currently participate. But the strong resistance from current participants that already provide their own money is surprising since they do not appear to complain about the current matching requirement. It’s also entirely possible that these institutions could just use existing contributions for the matching requirement and so would not need to provide significant larger amounts of money.

The fact that participants already pay a matching requirement may explain why the imposition of the quarterly payment will not prevent them from continuing to make use of Perkins funds. Just 13 percent of participating schools said the matching requirement would definitely prevent them from taking part in a reformed program.An additional 39 percent said the requirement would “probably” keep them from participating, while 48 percent of respondents said the effect was either unknown or likely not a barrier to entry.

Non-participating schools seemed far more skeptical of the matching requirement. Around 45 percent said the match would definitely prevent them from joining the program, while an additional 33 percent said it would likely be a deterrent.

The breakdown concerning whether the matching requirement would bar participation makes a lot of sense, but it also seems preemptive. The actual amounts schools will have to contribute has yet to be determined and will be up to the Secretary of Education’s discretion. Voicing such strong opposition to an unknown number gives an air of immediate push back, rather than careful consideration. It also seems that if institutions are concerned about lacking the money for a matching requirement then they should ask for a waiver option that would allow the match to vary based upon their financial status.

The proposed Federal Direct Perkins Loan Program certainly does have its flaws. The calculation formulas are complicated and at times inconsistent. They reward schools for both having high and low tuition and seem to take on too many policy goals at once. But they also represent a chance for institutions to provide additional aid to lower-income students that need assistance beyond subsidized Stafford loans—money that the school gets to allocate and control. It will be interesting to see if colleges and universities start suggesting meaningful ways to improve the proposed program and move beyond voicing opposition.