Low-interest student loan program dries up at Minnesota
by The Associated Press
 
MINNEAPOLIS -- 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.