On Wednesday, September 30, 2015, the Federal Perkins Loan Program expired. This program provided $36 billion in aid to 30 million low-income students during its lifetime. As a result, many students will have to take a different approach to financial aid. As a tax professional, here is what you need to know.

What was the Perkins Loan?

This loan was available to undergraduate, graduate and professional students with exceptional financial need. Colleges also had a stake in the risk of default because they put in 33 cents for ever dollar the federal government provided. The interest rate for students on this loan was 5 percent.

Roughly 1,500 colleges participated in this program that ended in September of 2014 and was sustained by a one-year extension. After the extension expired, the legislation that would extend the program another year passed in the House of Representatives, but not in the Senate.

What does this mean for students?

Students who applied before July 1 of the current school year will still receive their loans, but no new loans for new students will be granted. Students already receiving aid from the Perkins program can continue to receive that aid until September 30, 2020, or until they graduate if the date is sooner. Students must also continue to be enrolled in the degree program they were offered their most recent loan in.

Where can you learn more about advising students on financial aid?

Visit Surgent’s website where you can download our self-study course, “Tax Benefits for College Education,” to learn about planning for the Hope and Lifetime Learning credits, the new above-the-line deduction and student interest deductions. Because as a CPA you must be able to advise clients about the various tax benefits available for funding college educations.