According to its Web site, the PEF is a "resource is for faithful young members of the Church who wish to improve their education, find a good job, and better serve their family, the Church, and their community." It functions by providing modest loans for education or training to young adults who would not be able to afford higher education by themselves, and is in theory modeled after the Perpetual Emigration Fund, which helped thousands of Latter-day Saints emigrate to the United States in the early days of the Church.
President Gordon B. Hinckley announced the PEF at April 2001 general conference. Elder Carmack, the organization's executive director since its inception, recalled the first time President Hinckley told him about plans for the PEF.
"President Hinckley called on the telephone and went on to describe to me in some detail what he was going to do," Elder Carmack said. "So it was that he described to me a plan. He said, 'We've got an idea in mind, we've got a plan, that we will describe at general conference. We are going make loans in a very similar way to the loans made in the Perpetual Emigration Fund days. We'll make loans to our young adults, and those loans will be repayable. We don't want to give away money and make people weak.' …
"Many of them just cannot do it without a little bit of help, a little loan. And so the miracles come."