seeking opportunities & meeting challenges – a washington update
DESCRIPTION
Seeking Opportunities & Meeting Challenges – A Washington Update. MASFAA Annual Conference May 23, 2013 Brett Lief, Inceptia. Current State of Play. What are the goals of the Administration?. What is Congress up to?. What this all means beyond the beltway?. Administration. - PowerPoint PPT PresentationTRANSCRIPT
Seeking Opportunities & Meeting Challenges – A Washington Update
MASFAA Annual ConferenceMay 23, 2013
Brett Lief, Inceptia
2
Current State of Play
© 2013 Inceptia
What are the goals of the Administration?
What is Congress up to?
What this all means beyond the beltway?
3
• FY14 Budget Proposals
Administration
Today** 2016*** 2018****
Current Law
Subsidized Stafford3.4
(6.8 beginning 7/1/13) 6.8 6.8
Unsubsidized Stafford 6.8 6.8 6.8
PLUS 7.9 7.9 7.9
President's Proposal: Student Loans
Subsidized Stafford (10yr T-bill + 0.93) 2.63 5.23 6.13
Unsubsidized Stafford (10yr T-bill + 2.93) 4.63 7.23 8.13 PLUS (10yr T-bill + 3.93) 5.63 8.23 9.23
© 2013 Inceptia
4
• 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
5
• Pell • No change 2012-13 and 2013-14
• FSEOG/FWS• No change 2012-13, awards reduced 2013-14
• 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
6
• 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
WHAT IS CONGRESS UP TO?
Student Loan Interest Rate
8
Congressional Interest Rate ProposalsToday** 2016*** 2018****
Coburn-Burr-Alexander Proposal (10yr T-bill + 3%)All federal loans 4.7 7.3 8.2
Kline Proposal All Stafford Loans(10yr T-bill + 2.5%, adjusted annually, capped at 8.5%)
4.2 6.8 7.7
PLUS(10yr T-bill + 4.5%, adjusted annually, capped at 10.5%)
6.2 8.8 9.7
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
WHAT DOES IT MEAN BEYOND THE BELTWAY
10
Our institution is fine
We are okay – it’s the other
schoolsOh crap…
Three Stages of School Awareness
© 2013 Inceptia
11
NOTHING IS NEW
12
In the Beginning
• Society benefited from educated workforce
• Grants provided access, Loans provided choice
• Role of government was to stand behind student
© 2013 Inceptia
13
HOW THINGS HAVE CHANGED
14
In the Beginning
• Society benefited from educated workforce
• Grants provided access, Loans provided choice
• Role of government was to stand behind student
© 2013 Inceptia
15
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
16
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
17
Funding for needy
studentsAdditional
institutional funding
Perception of Who Benefits
© 2013 Inceptia
18
WHAT IS NEXT?
19
Change is Here
• Data driven• State cooperation• Analysis of programs
serving today’s generation
© 2013 Inceptia
20
Rebalance
AccessAffordabilityAccountabilityAusterity
© 2013 Inceptia
21
“The strength of the United States is not the gold at Fort Knox or the weapons of mass
destruction that we have, but the sum total of the education and the character of our people.”
Senator Claiborne Pell (D-RI)
© 2013 Inceptia
22
QUESTIONS
