According to the U.S. Department of Education, the Perkins Loan program “provides lowinterest [sic] loans to help needy students finance the costs of postsecondary education.” Pell grants target needy students as well, so the chart below shows the number of students receiving Perkins loans and the number of students receiving Pell grants at a sample of colleges.
The blue line shows how many Pell and Perkins recipients colleges would have if Perkins loans were distributed on the basis of need (roughly 5 Perkins loans for every 100 Pell grants), and the red line shows the best fit line for the actual distributions. Since both programs are targeting needy students, there should be a much stronger relationship between the number of recipients in each program. (The red line should be more similar to the blue line, and the dots should be more clustered around the blue line.)
If Perkins loans were evenly distributed among needy students, differences in the number of needy students at a college would explain 100 percent of the differences in the number of students receiving Perkins loans. The actual number is 2.5 percent. In other words, there is very little relationship between the number of needy students at a college and the number of Perkins loans awarded.
Indeed, if Perkins loans were distributed based on need, each college would have about 20 times as many Pell grant recipients as Perkins loan recipients. Yet incredibly, some colleges manage to give more students Perkins loans than there are Pell grant students at the college. For example:
- Washington University in St Louis awarded 2,217 Perkins loans, yet only had 542 Pell students.
- Duke awarded 1,731 Perkins loans, yet only had 961 Pell students.
- Harvard awarded 2,149 Perkins loans, yet only had 1,307 Pell students.
This is astounding. Perkins is supposedly a program for needy students. Yet many non-Pell students at Washington University, Duke, Harvard, and many other colleges are receiving Perkins loans, while more than 9 million Pell grant students at other colleges—who are even more needy—do not receive a Perkins loan.
This incredible state of affairs is possible because Perkins loans are one of the campus-based award programs where funding is based largely on past allocations rather than the actual need of students, meaning that older colleges and those that aggressively lobby receive more funding.
There is something very wrong when the amount of money awarded by a college from a program for needy students is based more on its political power than the need of its students. It is time to recognize that the Perkins loan program is not an aid program for needy students; rather, it is a slush fund for America’s aristocratic colleges.