1. Shelly Repp, President, NCHER Vince Sampson, President, EFC Washington Update NCHER/EFC Student Loan Legal Meeting August 5, 2013

2. Agenda  Fiscal Cliffs  HEA Reauthorization  Regulations  Tax Reform  CFPB Oversight  Dodd Frank Update  Pending Legislation

3. Fiscal Cliffs  FY 2014 Budget Resolution unlikely  Appropriations  House and Senate using different top lines  $967 billion vs. $1.058 trillion  Effects of sequester  Difference on defense/non-defense split  Senate Appropriations Committee has approved Labor-HHS- Education bill; House Committee has not  Continuing Resolution likely; issues will be funding levels and length

4. Fiscal Cliffs (cont.)  Debt Ceiling  Emergency measures likely to run out in October/November  Will there be  Grand Bargain  Short-term Bargain  Default

5. Higher Education Act Reauthorization  HEA expires at end of year – but HEA has automatic one-year extension  Last reauthorization in 2008 followed multiple extensions

6. Higher Education Act Reauthorization (cont)  House Education and the Workforce Committee has sought recommendations; Senate process has not started  Both committees likely to hold multiple hearings  Interest rates will be on the table (again)  Other issues/themes  One loan program/one grant program  Increased Pell funding/making it an entitlement  Funding tied to cost reduction/success  Eliminate loan subsidy  Automatic IBR  Loan limits  Simplify tax credit  Streamline FASFAA/apply through tax return  Better consumer information

7. Regulations  ED’s 2012 Negotiated Rulemaking  Final rule for PAYE, ICR and IBR and disability discharges published 11/1/12  NPRM with bulk of negotiated rules published 7/29/13.  Changes include:  Deferment & forbearance provisions  Loan rehabilitation and AWG  FDLP and FFELP consistency  ED’s 2013 Negotiated Rulemaking  Revisiting gainful employment  CFPB has announced it will issue Fair Debt Collection Protection Act regulations near year end

8. Tax Reform  Signature issue for both tax committee chairman  Similar approaches to start discussions  Baucus: “clean slate”  Camp: “blank sheet of paper”  Key issue for NFP student loan issuers: tax treatment for municipal bonds  Current state of play: student loan bonds can range from taxable to fully tax exempt  Proposals under consideration:  Eliminate tax exempt bonds in favor of tax credit bonds  Impose a 28% cap on individual deductions

9. CFPB Oversight  Director Cordray now confirmed. What's the impact?  CFBP structure unlikely to change  Appropriations unlikely to change  Increase in enforcement and supervision  Oversight shifting to “big data” and agency management  Pinkski v. CFPB  CFBP acquisition and use of credit reports  Staff salaries and building renovations

10. Dodd Frank Update  Regulations still behind schedule  Risk retention  MMMF  Investment advisor  Volker Rule  Securities and Exchange Commission  Shifting focus to enforcement  Key offices, including Office of Municipal Securities remain unstaffed  Congressional efforts to unwind Fannie and Freddie  House – PATH Act; Senate – Corker (R-TN)/Warner (D-VA) proposal  Secondary market “utility”  PATH act seeks to block Dodd Frank mandates such as risk retention

11. Selected Pending Legislation  Private Education Loan bankruptcy bills  Fairness for Struggling Students Act of 2013 (S 114), Senator Durbin (D-IL)  Private Student Loan Bankruptcy Fairness Act of 2013 (HR 532), Rep. Cohen (D-TN)  Budget and Accounting Transparency Act of 2013 (HR 1872), Rep. Garrett (R-NJ)  Earning Contingent Education Loans Act of 2013 (HR 1716), Rep. Petri (R-WI)  Supporting Academic Freedom Through Regulatory Relief Act (HR 2637), Rep Foxx (R-NC)  Know Before You Owe Private Student Loan Act of 2013 (S 113), Sen. Durbin (D-IL)  Refinancing Education Funding to Invest (REFI) for the Future Act of 2013 (S 1266), Sen. Brown (D-OH)  FAIR Student Credit Act of 2013 (HR 2561), Rep. Peters (D-MI)