Choppy waters ahead? Tales from a seasick sailor looking for land New Jersey Association of Student Financial Aid Administrators Brett Lief, National Student Loan Program November 8, 2011

“The needy encompass students not only from low-income families, although their priority in this aid program is assured, but also from families in the middle-income brackets who find that the cost of educating their children has far out stripped their ability to pay.” “To close a critical gap in the financial resources available to would- be students who are foreclosed, by the lack of finances and the growing expenses of a college education, from continuing their education after high school.” “A major problem is the spiraling costs of college and the fact that it is impossible for a family of modest means to send their children to the college of their choice.”

“The needy encompass students not only from low-income families, although their priority in this aid program is assured, but also from families in the middle-income brackets who find that the cost of educating their children has far out stripped their ability to pay.” REPRESENTATIVE POWELL (D-NY) “To close a critical gap in the financial resources available to would- be students who are foreclosed, by the lack of finances and the growing expenses of a college education, from continuing their education after high school.” REPRESENTATIVE MINK (D-HI) AUGUST 26, 1965*hea passed congress “A major problem is the spiraling costs of college and the fact that it is impossible for a family of modest means to send their children to the college of their choice.” REPRESENTATIVE GREEN (D-OR)

1958 National Defense Education Act 1965 Higher Education Act of 1965 (HEA) 1972 BEOG 1978 Middle Income Assistance Act 1980 Reauth of HEA 1981 Omnibus Budget Recon Act Timeline of Major Student Aid Legislation 1982 Defense Authorization Act 1986 Reauth of HEA 1993 Student Loan Reform Act 1997 Taxpayer Relief Act 1998 Higher Education Amendments

Is it about access? Is it about managing money? Is it about politics? Something changed in 1981

Congress Giveth 1958 National Defense Education Act First Student Loan program for low income students 1965 Higher Education Act of 1965 (HEA) Authorized Title IV programs 1972 BEOG Origin of the Pell Grant and needs analysis formula 1978 Middle Income Assistance Act Expanded programs to include middle income students 1980 Reauth of HEA Established PLUS loans 1981 Omnibus Budget Recon Act Student Loans dependant on need and origination fee added

Original Guiding Principals  Society benefits from educated workforce  Grants provide access, Loans provide choice  Role of government is to stand behind student

Original Student Support Team Students & Families SchoolsLenders Guaranty Agencies Federal Government

Congress Taketh 1982 Defense Authorization Act Selective Service registration required for aid eligibility 1986 Reauth of HEA Added second needs analysis methodology Added professional judgment Required need for interest subsidy Restricted PLUS to parent borrowers Added FFEL consolidation loans 1993 Student Loan Reform Act Established direct lending Added income based repayment 1997 Taxpayer Relief Act Added Hope Scholarship, Lifelong Learning tax credit, income exclusion and student loan interest deduction 1998 Higher Education Amendments Suspended aid eligibility for drug convictions Added extended repayment

Original Guiding Principals: H ow They Have Changed  Belief that individuals, not society, benefit by postsecondary education and training  Loans provide both access and choice  Government is positioning itself between students and schools

Recent Legislation  Deficit Reduction Act of $18 billion  Increased loan limits  New grant programs  Created College Access Initiative  College Cost Reduction & Access Act of $22 billion  Increased Pell Grant maximum to $5,400 over five years  Student Aid and Fiscal Responsibility Act  100% Direct Lending by July 2010  Revamping the Perkins Program  Mandatory Funds for Pell Grants  FAFSA Simplification  Approximately $10 billion for “deficit reduction”  Approximately $9 billion for health care

New Student Support Team Students & Families Federal Government Schools

Current Public Policy Discussions  Three-year Cohort Default Rates  Gainful Employment  Focuses on for-profit institutions  Current job market may make this a concern for more institutions  How many of graduates are unable to find jobs?  Administrative Capabilities of Schools  Compliance and Data Security  Senate Hearings on For-Profit Institutions

You are being watched…  Special Audit Services – Improper Payments Elimination and Recovery Act of 2010  “Under IPERA, any contractor performing the aforementioned requirement will be paid for its services based on a percentage of collections… The Department is seeking information from certified public accounting firms to assist in the development of a plan to conduct payment recapture audits…”

What Can Be Done?

Advocacy on all levels Individual Schools Regional Association Type of Schools National Association

What to Do, What to Do…  Engage Your Campus Leadership  Share Stories of Student Aid Recipients  Student aid changes lives  Become involved in federal rulemaking

Questions?