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May 16, 2008 10:19 am US/Central

Low-Interest Student Loan Program Dries Up At 'U'

MINNEAPOLIS (AP) ― No University of Minnesota students will get subsidized Perkins loans this year because a revolving fund managed by the campus has run dry.
  
The federally subsidized Perkins loans fill a small but vital need for many college students. It comes with a 5 percent interest rate and a low credit threshold.
  
Last year in Minnesota, 14,000 students borrowed an average of $2,400 each through the program.
  
University of Minnesota Office of Student Finance Director Kristine Wright says the revolving fund has gone from a couple of years of repayment revenue of about $6.5 million to about $2 million now.
  
As a result, she says the university has to stop making Perkins loans while the fund refills.
  
The university is not alone. Perkins programs around the country are scaling back after a wave of student loan consolidations led to years of big repayment revenue and extensive lending.


(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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