1. NASFAA’s Update:
Inside the Beltway 1

2. Agenda Washington Political Climate Federal Budget Update
President Obama’s College Affordability Plan
Reauthorization
Negotiated Rulemaking
NASFAA Proactive Policy

3. Washington Political Climate

4. Washington Political Climate
Partisanship, Brinkmanship, and “Blame Game”
Deficit Reduction
Budget Politics Dictating Policy
Compromise = Bad word

5. Budget Update—Gov’t Shutdown
Government shutdown—result of Congress failing to pass a spending bill for fiscal year (FY) 2014 by Oct. 1
Spending bill got caught up in larger partisan battles
Shutdown will remain until Congress agrees on spending bill

6. Budget Update—Gov’t Shutdown
What is the impact of the government shutdown on student financial aid?
Very minimal, especially if shutdown is short-term
No disruption to Pell, Direct Loans, campus-based programs
Due to furloughed staff, customer service will likely see the greatest impact
Furloughs at IRS could create problems with Data Retrieval Tool (DRT) and requests for tax transcripts

7. Budget Update—Sequestration
Sequestration is a 10-year process
Implemented 3/1/2013, Year 1 impact:
5 % across-the-board cut to FSEOG, FWS, TRIO, GEAR UP
6 % across-the-board cut to TEACH Grant
Increase in Direct Loan origination fees
Pell Grant was protected
Years 2-10 cuts will be achieved through lower spending caps
If we do have a CR, will likely be CR again.
Imagine a family, reduce food budget and movie budget equally. Next year can eliminate movie altogether and keep food as is.
$109 billion in savings each year.

8. Budget Update—Sequestration
Pell Grant is not protected in years 2-10
Unless Congress passes a law to stop sequestration it will remain in effect

9. Budget Update—FY 14 Predictions
It is likely that FY 2014 (award year ) will ultimately be funded by a year-long continuing resolution (CR)
In this case, the student aid programs would likely see the same exact cuts they experienced in FY 2013 (award year ). Pell would also likely be protected.
Repeating year 1

10. President Obama’s College Affordability Plan
Plan announced in late August
Three part:
Paying for performance
Promoting innovation and completion
Ensuring that student debt remains affordable
Key Feature:
Prior to 2015 award year, develop a “college ratings system” that would “compare colleges with similar backgrounds as well as colleges that are improving their performance.” ED would be directed to involve key stakeholders in developing the metrics and to include measures related to access, affordability and outcomes
The intent is that by 2018 an institution’s rating would be used to determine the amount of student aid they receive
Not just campus-based presumably. Who knows how that will work?
Ratings thing is most significant part

11. President Obama’s College Affordability Plan
Other features of plan:
“Race to the Top” for higher ed
Reward colleges with a Pell “bonus”
Strengthen Satisfactory Academic Progress (SAP)
Encourage innovation in learning models (MOOCS, Prior Learning Assessment, Competency-based Learning)
Make all borrowers eligible for Pay As You Earn (PAYE) & launch a campaign to raise awareness about eligibility and enrollment
Not a lot of detail.

12. President Obama’s College Affordability Plan
Odds of Implementation: Some features of the president’s plan would require congressional action, while others would not
No Congressional Action Needed:
Development of “ratings list”
Campaign to enroll more students into PAYE
Congressional Action Needed:
Coupling a school’s rating to student aid eligibility
The parts of the proposal that would require new funding or make changes to current programs

13. Reauthorization
Higher Education Act reauthorization *should* occur in 2014; but that is very unlikely
The process will definitely start, but there may not be a final bill
NASFAA’s Reauthorization Task Force submitted recommendations to House and Senate Ed Committees
Predictions about reauthorization?
Likely will occur piecemeal and not in full for at least another couple of years
Major subjects for debate are likely to be: student loans, innovative learning models (MOOCs, Prior-Learning Assessment, Competency- based Learning), consumer information

14. Negotiated Rulemaking: Gainful Employment
September, 2013: first negotiating session
Ongoing: negotiators continue conversations within topical sub-groups
October 21-23: second (and last) negotiating session
Prediction: no consensus
Because of master calendar requirements, earliest possible effective date is July 1, 2015

15. Why is Proactive Policy Important?

16. NASFAA Proactive Policy
Task Force on Student Loan Indebtedness
Reimagining Aid Design & Delivery
Task Force on Award Notification and Consumer Information & related consumer testing
Consumer Testing of Award Letters
Advocacy Pipeline

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18. Questions?