Shelly Repp, President, NCHERVince Sampson, President, EFC

Washington UpdateNCHER/EFC Student Loan Legal Meeting

August 5, 2013

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

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

Fiscal Cliffs (cont.)

Debt Ceiling Emergency measures likely to run out in

October/November Will there be

Grand Bargain Short-term Bargain Default

Higher Education Act Reauthorization HEA expires at end of year – but HEA has

automatic one-year extension Last reauthorization in 2008 followed multiple

extensions

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

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

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

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

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

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)