Federal Perkins Loan

Factual Questions
1

I need some help understanding the federal Perkins loan. Many posts start with “a friend of mine” or “someone I know”… in reality, we all know that it’s actually the person behind the keyboard.

this situation truly involves someone I know… believe it or not… I’m questioning legality of the situation. I’m not asking for legal advice. Just factual information to support one side or another. Here’s the deal:

The person I know, who we’ll call Michelle, applied for the federal Perkins loan. She was not granted this loan and $4,000 was gone from her usual yearly budget. Michelle is an undergraduate student and meets every single eligibility requirement listed by the government and our University. Furthermore, she submitted the FAFSA on New Year’s Day which means that she had “priority” status (And obviously not that big of a hangover from the night before).

Michelle was told that the Perkins Loan is reserved solely for dependent students by our University. They recommended that she received a subsidized loan instead.
She qualifies for both types of loans.

There are no exclusions anywhere that I’ve read saying that one loan would disqualify another loan or the other loan.

the government regulations that I personally think are pertinent state:
“674.10 Selection of students for loans.
(a)(1) An institution shall make loans under this part reasonably available,
to the extent of available funds, to all students eligible under §674.9 but
shall give priority to those students with exceptional financial need.
(2) The institution shall define exceptional financial need for the purpose
of the priority described in paragraph (a)(1) of this section and shall
develop procedures for implementing that priority.
(b) If an institution’s allocation of Federal Capital Contribution is
directly or indirectly based in part on
the financial need demonstrated by students attending the institution as
less-than-full-time or independent students,
a reasonable portion of the dollar amount of loans made under this part must
be offered to those students.
(c) The institution shall establish selection procedures and these
procedures must be—
(1) In writing;
(2) Uniformly applied; and
(3) Maintained in the institution’s files.”

so where does the legality fall into this? Are there any methods of grievance that will actually be considered and not ignored? She’s in a pretty bad situation. I asked if she was given an e-mail address to contact and she said that she was… Will her complaint actually be heard? Is this a situation where her complaint would be “filed” and never really dealt with? Why one loan and not another? Is there any recourse in this situation? Is this acceptable?

I know there are a lot of questions left unanswered in this situation which is why I’m curious about what Michelle is able to do.

Please, give me some “GQ” related thoughts about this. :slight_smile:

2

The key in the blurb you posted is this, I think:

(Emphasis mine)

In terms of financial aid, universities have to make do with what they’ve got, so they set priorities based on this. And since the university is the lender, they have the right to do that. There are a number of factors that go into a financial aid package than some law that describes how loans should be awarded.

If I were Michelle, I’d talk to the head of Financial Aid and discuss her package. It sounds like she may not understand the difference between the different kinds of loans, and/or Financial Aid might be able to help her find other money. Since they have an interest in keeping her in school, they’ll help her.

Robin