Transcript Slide 1

Federal Policy Making
Exercise Your Rights
April 16, 2008
ILASFAA Annual Conference
Vicki Shipley
National Council of Higher Education Loan Programs (NCHELP)
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Agenda
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Process Overview and Key Players
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House
Senate
Administration
Higher Education Act Reauthorization (will it ever
happen?)
Negotiated Rulemaking
2008 Elections
Your Role and Responsibilities
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Legislation vs. Regulation
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Legislation
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Congress adopts with Presidential signature or after
overriding a veto
Amends the U.S. Code -- the “statute”
(e.g., Higher Education Act)
Public Laws (110-XX)
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Legislation vs. Regulation
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Regulation
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Promulgated by appropriate federal agency
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U.S. Department of Education for higher education programs
Reviewed by Office of Management and Budget (OMB)
Interprets and adds detail to statute
Amends Code of Federal Regulations (C.F.R.)
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Authorization vs Appropriation
Authorizing Legislation
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Introduced by a Representative or Senator to
Amend or Create a Federal Statute, such as,
Higher Education Act (HEA)
Creates programs
Authorizes expenditure ceilings
Appropriating Legislation
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Budget Bills
Determines the actual amount of funding, usually
less than the amount appropriated
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LEGISLATIVE PROCESS
(In a nutshell….so to speak!)
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Authorization Legislation: Introduced by a
Representative or Senator to Amend or Create a
Federal Statute
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Legislation assigned to “Committee(s) of Jurisdiction”
Chairman assigns to Subcommittee
Hearings held on major legislation
Higher Education Act to be “Reauthorized” every six years
Appropriations Legislation: Sets Annual Funding
Levels for Federal Programs (aka discretionary
spending)
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LEGISLATIVE PROCESS
(It Takes Two To Tango!)
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Other Chamber (House or Senate) Must Act -Two Options:
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Considers similar legislation at its own pace
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Receives legislation after other chamber acts
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Passes a bill that can be matched up with one passed by the other
chamber
Differences must be reconciled before enactment is possible
May approve identical bill or make amendments
“Back & forth” process, until identical bill is
approved
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LEGISLATIVE PROCESS
(Final Action)
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Conference Committee
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Attempts to resolve differences between House and Senatepassed bills
Result is a “Conference Report” -- includes explanatory language
and recommendations
Identical Conference Report must be approved by House and
Senate before it can be sent to the President
President signs or vetoes
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Education & Labor Committee
George Miller (D-CA)
Chairman
Howard P. “Buck”
McKeon (R-CA)
Ranking Member
Higher Education, Lifelong Learning &
Competitiveness Subcommittee
Rubén Hinojosa (D-TX)
Chairman
Ric Keller (R-FL)
Ranking Member
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Health, Education, Labor & Pensions Committee
Edward Kennedy (D-MA)
Chairman
Michael Enzi (R-WY)
Ranking Member
Children & Families Subcommittee
Chris Dodd (D-CT)
Chairman
Lamar Alexander (R-TN)
Ranking Member
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HEA Reauthorization
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Senate reauthorization: S. 1642 (passed 95-0 on July
24, 2007) The Higher Education Amendments of
2007
House reauthorization: H.R. 4137 (passed 354-58 on
February 7, 2008) The College Opportunity and
Affordability Act
Conference going on now at the staff level
HEA extended until April 30, 2008
Student loans “reauthorized” via the two
reconciliation bills (HERA and CCRAA)
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HEA Reauthorization
Both the House and the Senate reauthorization bills address:
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Student Loan Sunshine provisions
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Preferred lender lists
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Increase Pell Grant authorization levels
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Address other discretionary grant programs
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Authorize the Perkins Program
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Needs Analysis
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FAFSA Simplification
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Institutional PPA
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Many new extra disclosures
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The US Department of Education
Secretary: Margaret Spellings
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Lawrence Warder
Chief Financial Officer / Acting COO, FSA
Sara Martinez Tucker
Under Secretary
Diane Auer Jones
Assistant Secretary, Postsecondary Education
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Negotiated Rulemaking (Neg Reg)
Secretary of Education’s Responsibility
 Advise Congress
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Propose Legislation
Provide Technical Assistance
Assist with Constituent Issues
Regulates Where Needed
Enforces Laws and Regulations
Communicates with Interested Parties and the Public
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Negotiated Rulemaking (Neg Reg)
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Required by the HEA (Section 492A)
All parts of Title IV – All the time
Goal: To develop Notices of Proposed
Rulemaking (NPRM) that reflects a final
consensus of the negotiating committee
Consensus: There must be no dissent by any
member of the committee (includes ED) to
have reached consensus
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Neg Reg 2008
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Negotiated Rulemaking (Neg Reg)
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New regulations effective 7/1/08 from 2007 Neg Reg – inducements,
preferred lender lists etc.
2008 neg reg topics:
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Direct Loan Public Service Loan Forgiveness
Income Based Repayment (IBR)
Conforming Economic Hardship Deferment with IBR
Definition of Not-For-Profit Loan Holder
Harmonizing HEROES Waivers with other Benefits Provided to Returning and
Active Duty Military
Final Loans Team Meeting: April 14 - 15, 2008
Regulations will be effective July 1, 2009 and must be
published in final form by November 1, 2008
Don’t forget to read the preamble!
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Income-Based Repayment
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New repayment option available 7/1/2009 for
borrowers experiencing “partial financial
hardship”
Eligibility and minimum monthly payment is
re-evaluated annually
Government pays the interest on qualifying
subsidized Stafford loans for not more than 3
years (not counting periods of Economic
Hardship deferment)
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Income-Based Repayment
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The repayment period can extend beyond 10
years regardless of the amount of the eligible
debt but not beyond 25 years
Includes a loan forgiveness provision after
experiencing a partial financial hardship and
25 years of eligible payments
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Income-Based Repayment
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The repayment period can extend beyond 10
years regardless of the amount of the eligible
debt but not beyond 25 years
Includes a loan forgiveness provision after
experiencing a partial financial hardship and
25 years of eligible payments
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Income-Based Repayment
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Any loan amount that is cancelled may be
taxable in the calendar year it is cancelled
IBR may not always be the best/lowest
repayment option for a borrower – should
consider impact of eligibility for an Economic
Hardship deferment
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Public Service Loan
Forgiveness
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New loan cancellation provision for Direct Loan
borrowers not in default who:
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Have made 120 monthly payments on an eligible loan starting after
10/1/2007
Must have been “directly and full-time” employed in public service
during the entire repayment period
FFEL borrowers may consolidate into DL to get this benefit but ALL
payments must have been in DL
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Economic Hardship Deferment
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POSSIBLE Change to the HRD
Elimination of the debt-to-income ratio calculation for
purposes of determining eligibility as of 7/1/09
Currently borrowers are eligible for this deferment if their
total debt is more than 20% of their income and if their
income minus their loan payments leaves them with no more
than 220% of the income considered poverty level in the U.S.
“Big Cost” Item—ED estimated the 10-year cost of
maintaining this provision at $1.1 billion
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NegReg
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Your Role During NegReg
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Your Role After NegReg
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Know who represents your segment or interests
Follow the issues (IFAP, NASFAA)
Review NPRM in Federal Register
Respond within comment period
Send Comments to
Department of Education (see Federal Register) w/copy to:
 Federal Issues Committees
 NASFAA
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Two members of the Senate HELP Committee are
running for President
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Hillary Clinton
Barack Obama
Student loans and broader issues of college access
were issues in the 2004 Presidential election and the
2006 Mid-Terms … they are once again be on the
agenda in 2008
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Candidates have already outlined higher education platforms
If HEA remains incomplete, it may be on candidates’ ‘to-do’ lists
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2008 Presidential Election
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Senator Barack Obama (D-IL)
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Supports increasing Pell
Supports elimination of FFELP
Simplify FAFSA
Senator Hillary Clinton (D-NY)
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Increase Hope tax credit
Adjust Pell annually to take into
account increased college costs
Supports elimination of FFELP
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2008 Presidential Election
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Senator John McCain
(R-AZ)
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Wants more disclosure of
academic earmarks
Expand education
benefits for military
veterans
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Be Heard!
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YOU ARE THE EXPERT!
Stay in touch (Email, phone, in person) with your
Congressional/State legislative members. Get to know
their staff
Be sure they know who you are, what you do and the
students you serve – be a trusted resource
Invite members of Congress/state legislature and/or their
staff to tour your facilities
Respond to NPRM’s
Volunteer to be on ILASFAA, MASFAA, NASFAA
committees
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Thank You!
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Any Questions/Comments?
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