Election Promises and Funding Realities: What to Expect after the Dust Settles Brett E. Lief Board Member Director of Strategic Alliances

Access Money Politics Is it about…

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Timeline of Major Student Aid Legislation 5 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia Defense Authorization Act 1986 Reauth of HEA 1993 Student Loan Reform Act 1997 Taxpayer Relief Act 1998 Higher Education Amendments 1958 National Defense Education Act 1965 Higher Education Act of 1965 (HEA) 1972 Basic Educational Opportunity Grant Enacted 1978 Middle Income Assistance Act 1980 Reauth of HEA 1981 Omnibus Budget Recon Act 2007 College Cost Reduction and Access Act 2010 Student Aid and Fiscal Responsibility Act 2011 FY2011 Continuing Budget Resolution – eliminated year- round pell 2011 Budget Control Act 2012 Consolidated Appropriations Act

IS IT ABOUT ACCESS? 6

Society benefits from educated workforce Grants provide access, Loans provide choice Role of government to stand behind student Original Guiding Principals © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 7

Belief that individuals, not society, benefit from postsecondary education and training Loans provide both access and choice Government is positioning itself between students and schools Requiring additional school accountability Original Guiding Principals: How They Have Changed © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 8

Three-year Cohort Default Rates Gainful Employment Focuses on for-profit institutions and effects all other schools Current job market may make this a concern for more institutions How many of graduates are unable to find jobs? Administrative Capabilities of Schools Compliance and Data Security Senate Hearings on For-Profit Institutions Current Public Policy Discussions © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 9

You are being watched… Special Audit Services – Improper Payments Elimination and Recovery Act of 2010 “Under IPERA, any contractor performing the aforementioned requirement will be paid for its services based on a percentage of collections… The Department is seeking information from certified public accounting firms to assist in the development of a plan to conduct payment recapture audits…” ED OIG Report (May-2012) - of the 19 reports issued, the OIG identified $44 million in financial recommendations, closed 75 investigations of fraud and corruption involving ED programs and operations and secured nearly $16 million in settlements, fines and other recoveries. Consumer Financial Protection Bureau Financial Aid “Shopping Sheet” © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia. 10

IS IT ABOUT MANAGING MONEY? 11

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IS IT ABOUT POLITICS? 14

The 112th Session: “The Gridlock Congress” Very little major legislation, but some steps taken on education issues --policy direction more in focus The budget mess: The 6 Month Continuing Resolution – what it really means Sequestration The Remainder of FY13 The (really) lame duck session Taxes (Payroll taxes, AMT, Cap Gains, Bush Tax Cuts, Extenders), Doc Fix, Sequester, Debt ceiling Congress 15 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Congressional Gridlock = Administration takes matters into their own hands, i.e. new regs., waivers Many new regulations have the potential to be game changers – could impact education policy for years; procedurally tough to overcome for a new Congress and/or President Because of past gridlock, Congress will face an unprecedented situation in which nearly every major education law will be scheduled for reauthorization: ESEA, HEA, WIA, CTE, CCDBG, IDEA, & Welfare Congress 16 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

The Administration: Turnover no matter who wins Big changes in Congress on key Ed Committees, especially if control changes Intra-party battles will be more important than inter-party battles with each party becoming more unified than ever One Thing is Certain 17 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Elementary and Secondary Reauthorization due in 2007 IDEA due for reauthorization 2008 WIA due for reauthorization Higher Education Act Reauthorization Ten-years and eight extensions The Agenda 18 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Longer it takes the more opportunities for changes through budget Education could receive significant attention as the President looks for possible victories outside of budget policy Signature Administration initiatives continue Community College agenda Regulatory expansion HEA Reauthorization possible, but big differences on issues like for-profits, Pell, and accreditation among others Muddled outlook for student loan providers; Administration still likely to push cuts to pay for Pell and Interest Rate fix Education Funding Outlook stable with moderate increases possible to larger programs -- Pell likely to receive increase, and interest rate fix on the table once again No Child Left Behind principals applied to higher education The Agenda 19 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Will be data driven Will include state cooperation Include analysis of programs serving today’s generation Programs will be looked at on meeting federal program basis Change is Coming 20 © 2012 Inceptia Confidential. Do not copy or redistribute without expressed written permission from Inceptia.

Advocacy on All Levels Individual Schools Regional Association Type of Schools National Association 21

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QUESTIONS? 23

CONTACT INFORMATION Brett Lief