When President Bush started planning budget cuts for the Higher Education Reconciliation Act of 2005, no one escaped unaffected – not even those most in need.

After first cutting loan programs for middle-class families for 2006 – Stafford and PLUS loans – Congress is now targeting the Federal Perkins Loan for 2007.

The Perkins Loan, a small fund of money in circulation to help lower-income and lower middle-income students get an education, may no longer be available. President Bush’s fiscal year 2007 budget proposal calls for putting an end to the program in order to cut the deficit.

The Perkins Loan works through a revolving fund, compiled from both the U.S. government and individual universities. When money comes in from loan repayments, it is then leant out to new students.

The decision to pull back the federal contributions to the loan comes prior to the approaching expiration date of the Higher Education Act, which is June 30.

Going through reauthorization every five years by Congress to stay current, the HEA authorizes the major federal student aid programs that are responsible for the majority of financial assistance to postsecondary school students.

While definite dates of the Perkins Loan’s dismissal are unknown, Associate Director of the Office of Financial Aid and Scholarships Chris Collins said the loan would be eliminated at the cost of students.

“Any program being eliminated would be a serious disadvantage to helping students fund their educational costs,” he said.

In an effort to keep the Perkins Loan available, Collins said that the National Organization of Student Financial Aid Administrators, and other various higher education administrators, are lobbying the government to try to get them to change their position. He said that although the Perkins loan is a small program in the context of all available financial aid, it is an important program for certain populations of students.

While all students who apply for support through the Free Application for Federal Student Aid ultimately apply for the Perkins Loan, it is only the neediest of students who are eligible.

In the 2004-05 academic year, 673,000 students received Perkins Loans totaling $1.26 billion, with an average loan of $1,877 and a maximum of $4,000. Its popularity may be linked to the fact that it carries a low, fixed interest rate of 5 percent, which doesn’t begin to accrue until nine months after the student graduates.

However, it is not the only low-interest loan available.

The Direct Loan, also available through the FASFA, has a lower interest rate of 4 percent. The difference has resulted in fewer students opting for the Perkins Loan, Collins said.

“Even though (the Perkins Loan) is still an extraordinarily good deal, in terms of a loan interest-rate,” he said, “it’s just not as good.”

Because of the opportunity for other low-interest loans, Executive Director of Enrollment Services Sandra Cook said that the effects of eliminating the Perkins Loan wouldn’t be clear until after the program ended.

While SDSU is considered an affordable school, those moving to San Diego from out of the region will be the ones with the most to worry about, she said.

“Local students can live at home, while others have to find housing,” she said, “and that’s where the bill gets expensive.”

Political science junior Phillip Gregory said his loans help balance out paying for tuition and housing, along with other living expenses.

“Sure, grants and scholarships can get you through school,” Gregory said, “but without my loans, I don’t know if it would be possible to pay the rent.”

Gregory, who goes to school full time while holding a part-time job in Downtown, said his goal is to save money for after graduation, to pay back the money he owes.

“I guess saving borrowed money is a twisted concept, but it’s what I have to do,” he said.

And Congress is in the same boat, trying to stretch the budget while subsidizing such activities as the War on Terrorism and Hurricane Katrina disaster relief.

“They’re looking for places to save money,” Collins said of the U.S. government. “And student financial aid is one of the areas that Congress and the White House have been looking.

“I believe that that is part of the impetus behind looking at the elimination of the Perkins Loan.”