Dive Summary:
- While the exact number of lawsuits is unknown, Yale University, George Washington and the University of Pennsylvania have all sued former students for nonpayment on their Perkins student loans.
- Unlike federal student loans, Perkins loans are administered entirely by colleges from a revolving fund under which loan repayments are used to fund new loans; Perkins loans are typically given to a school's most financially at-risk students who "may have the least ability to pay it back," according to Nancy Coolidge, associate director of student financial support for the University of California system.
- In one year's time spanning 2010 to 2011, former college students defaulted on $964 million in Perkins loans.
From the article:
"... The increase in the amount of defaulted loans among poor students comes as President Barack Obama says he wants to expand access to college for working-class families and increase funding for the Perkins program. Under his proposal, the pot for Perkins loans would increase to $8.5 billion from about $1 billion. The Education Department would service the loans instead of colleges. ..."