Seeking Opportunities & Meeting Challenges – A Washington Update MASFAA Annual Conference May 23, 2013 Brett Lief, Inceptia

Current State of Play © 2013 Inceptia 2 What are the goals of the Administration? What is Congress up to? What this all means beyond the beltway?

FY14 Budget Proposals Administration Today ** 2016 *** 2018 **** Current Law Subsidized Stafford 3.4 (6.8 beginning 7/1/13)6.8 Unsubsidized Stafford6.8 PLUS7.9 President's Proposal: Student Loans Subsidized Stafford (10yr T-bill ) Unsubsidized Stafford (10yr T-bill ) PLUS (10yr T-bill ) © 2013 Inceptia 3

New Direct Perkins Loan Funding increased $1 billion to $8 billion 2000 additional schools No school involvement in repayment or collection Closeout of existing portfolio Pell Grant Increase Add $140 to current level = $5,785 Campus-based Funding Formula Change Reward schools serving high-need students and setting responsible tuition policies Federal Work Study - Additional $150 million SEOG Continued Funding Budget Proposals © 2013 Inceptia 4

Pell No change and FSEOG/FWS No change , awards reduced Direct Loan fees Increased 1.0% to 1.051% Direct Loan PLUS Increased 4.0% to 4.204% Changes to non-profit direct loan servicers Sequestration – Major Provisions © 2013 Inceptia 5

Begin September 2013 Fraud Prevention & Detection Gainful Employment Cash Management State Authorization Clock to Credit Hour Conversion Campus Safety and Security PLUS Loan & Adverse Credit Other Items Determined by Negotiators Proposed Regulatory Rulemaking © 2013 Inceptia 6

WHAT IS CONGRESS UP TO? Student Loan Interest Rate

Congressional Interest Rate Proposals Today ** 2016 *** 2018 **** Coburn-Burr-Alexander Proposal (10yr T-bill + 3%) All federal loans Kline Proposal All Stafford Loans (10yr T-bill + 2.5%, adjusted annually, capped at 8.5%) PLUS (10yr T-bill + 4.5%, adjusted annually, capped at 10.5%) Petri Proposal (Loan payment capped at 15% of income, interest capped at 50% of original balance, eliminates subsidies and forgiveness programs) Reed-Durbin-Tierney-Courtney (91day T-bill + factor annually set by Department based on program cost) Subsidized Stafford (91day T-bill + ED set factor, capped at 6.8%) Unsubsidized Stafford & Parent PLUS(91day T-bill + ED set factor, capped at 8.25%) Warren Proposal (Set rates on new Stafford loans at Fed discount window rate (0.75%) for one year) © 2013 Inceptia 8

WHAT DOES IT MEAN BEYOND THE BELTWAY

Our institution is fine We are okay – it’s the other schools Oh crap… Three Stages of School Awareness © 2013 Inceptia 10

NOTHING IS NEW 11

In the Beginning Society benefited from educated workforce Grants provided access, Loans provided choice Role of government was to stand behind student © 2013 Inceptia 12

HOW THINGS HAVE CHANGED 13

In the Beginning Society benefited from educated workforce Grants provided access, Loans provided choice Role of government was to stand behind student © 2013 Inceptia 14

How Things Have Changed 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 Additional school accountability © 2013 Inceptia 15

Additional Accountability: You are Being Watched… Special Audit Services – Improper Payments Elimination and Recovery Act of 2010 Consumer Financial Protection Bureau Financial Aid “Shopping Sheet” © 2013 Inceptia 16

Funding for needy students Additional institutional funding Perception of Who Benefits © 2013 Inceptia 17

WHAT IS NEXT? 18

Change is Here Data driven State cooperation Analysis of programs serving today’s generation © 2013 Inceptia 19

Rebalance Access Affordability Accountability Austerity © 2013 Inceptia 20

© 2013 Inceptia 21

QUESTIONS 22

CONTACT INFORMATION Brett Lief