1. Short title
This Act may be cited as the “Perkins Access, Retention, and Completion (ARC) Act”.
Perkins Access, Retention, and Completion (ARC) Act
A BILL
To amend the Higher Education Act of 1965 to establish the Federal Perkins ARC loan program, and for other purposes.
2. Findings
Congress finds the following:
Since the inception of the Federal Perkins Loan Program in 1958, over $28,000,000,000 in loans have been made to students through more than 25,000,000 aid awards. Millions of students and families in need have been helped by Federal Perkins Loans.
The Federal Perkins Loan Program was a revolving fund that utilized a model of risk sharing, local control, and school based servicing that greatly benefited students, borrowers, and institutions of higher education for six decades.
In the 2016–2017 academic year, the last year that Federal Perkins Loans were authorized, 30 percent of families with dependent students receiving Federal Perkins Loans had annual incomes below $30,000 and 8 percent of families with dependent students receiving Federal Perkins Loans had annual incomes below $12,000.
Since the expiration of the Federal Perkins Loan Program authorization in 2017, there has been no substitute or replacement aid for college students with need, which has resulted in many students having to borrow higher cost student loans or withdraw from college altogether.
3. Federal Perkins ARC Loans
In general— Part E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by inserting before section 461 the following new section:
“460A. Federal perkins access, retention, and completion ARC loan
“(a) Designation of loans—The Secretary shall carry out a program assisting in the maintenance of funds at institutions of higher education for the making of loans to undergraduate, graduate, and professional students in need to pursue their courses of study in such institutions or while engaged in programs of study abroad approved for credit by such institutions. Loans made under this section shall be known as “Federal Perkins ARC Loans”.
“(b) Terms and conditions—Unless otherwise specified in this section, all terms and conditions and other requirements applicable to Federal Perkins Loans established under section 461 shall apply to Federal Perkins ARC Loans made pursuant to this section.
“(c) Agreements—The Secretary may not provide assistance to an institution of higher education under this section unless such institution enters into an agreement with the Secretary under section 463(a).
“(d) Eligible borrowers—A loan under this section may only be made to a student who—
“(1) is eligible under section 464(b) (including graduate and professional students as defined in regulations promulgated by the Secretary);
“(2) attends an eligible institution with an agreement with the Secretary under section 463(a); and
“(3) the institution uses its authority under such agreement to award the student a loan.”
Reauthorization of Perkins Loans— Section 461(b) of the Higher Education Act of 1965 (20 U.S.C. 1087aa(b)) is amended—
by striking “(1) In general.—”;
by redesignating subparagraphs (A), (B), and (C) as paragraphs (1), (2), and (3), respectively; and
by striking paragraphs (2) and (3).
Allocation of funds for Perkins ARC Loan— Section 462 of the Higher Education Act of 1965 (20 U.S.C. 1087bb) is amended—
by striking subsections (a) and (b); and
by inserting before subsection (c) the following:
“(a) Available direct Perkins ARC annual loan authority—There are hereby made available, from funds made available for loans made under part D, not to exceed $6,000,000,000 of annual loan authority for award year 2020–2021 and each succeeding award year until the program is determined by the Secretary to be self-sustaining, to be allocated under subsection (b).
“(b) Allocation based on previous allocation
“(1) In general—From the amount appropriated pursuant to section 462(b), for each fiscal year, the Secretary shall allocate to each eligible institution an amount equal to not less than 90 percent and not more than 110 percent of the amount that the eligible institution received under this subsection and subsection (a) (as such subsections were in effect with respect to allocations for such fiscal year) for the previous fiscal year for which that institution received funds under this section.
“(2) Ratable reduction—If the amount appropriated for any fiscal year is less than the amount required to be allocated to all institutions under paragraph (1), then the amount of the allocation to each such institution shall be ratably reduced.
“(3) No previous allocation—In the case of an institution that has not received a previous allocation under this section, the Secretary shall allocate funds under this section solely on the basis of the self-help need determination described under subsection (c).”
Continued loan servicing— Section 466 of the Higher Education Act of 1965 (20 U.S.C. 1087ff) is amended by adding at the end the following:
“(d) Continued loan servicing—The Secretary shall continue to make payments for student loan servicing to institutions of higher education that service outstanding existing Federal Perkins Loans awarded under part E of title IV prior to the date of the enactment of the Perkins Access, Retention, and Completion (ARC) Act.”