Future of Direct Lending Chuck Knepfle Director of Financial Aid Clemson University.

Future of Direct Lending

Chuck KnepfleDirector of Financial Aid

Clemson University

A little about me for you Bingo boards….

• I have worked outside of South Carolina

• I have 3 or more pets

• I have a tattoo

Direct Lending Trivia

• What school was the first to originate a Direct Loan?

– BONUS: What date? July 1, 1994

Direct Lending Trivia

• What was the Congressional trade-off for the 150% rule we are all working to implement?

3.4% Interest for one year

Direct Lending Trivia

• Under what president was Direct Lending created?

Direct Lending Trivia

• Which South Carolina Congressional members are on the education committees?– Tim Scott (Senate)– Joe Wilson (House)– Trey Gowdy (House)

National Direct Student Loan Coalition

• The National Direct Student Loan Coalition (the Coalition) is an alliance of schools dedicated to the continuous improvement and strengthening of the federal Direct Loan program. Coalition members are practicing financial aid professionals. The Coalition's goals are to: – Advocate high standards in the delivery of student loans by all participants in

the process;– Facilitate efficient delivery of loans by providing a liaison to the US

Department of Education on behalf of schools;– Provide an effective communication network among participating schools to

improve program administration;– Educate public officials, the financial aid community, professional

associations, the media and the general public on student lending; and,– Promote policies to minimize the use of student borrowing and improve loan

terms for those who borrow

Upcoming Legislation

• Student Loan Borrower Bill of Rights– Various disclosures for private loans– Refinance private loans– Requires school certification– Changes bankruptcy protection

• Know Before You Owe Student Loan Act – Requires schools to certify private loans

• ExCEL Act (Earnings ContingentEducation Loans Act)– Establishes IDEA Loan, with pay-

ments taken directly from income

Reauthorization Proposals

• National Direct Student Loan Coalition:– http://

www.directstudentloancoalition.org/media/pdfs_autogen/Reauth-Comp_9-2013.pdf

• NASFAA (Loan Task Force on Loan Indebtedness)– http://www.nasfaa.org/indebtedness-report.aspx

Reauthorization Proposals

• Simplification of the DL Servicing interface• Common portal• Standardized look to communications• Equal service levels across servicers

• Single income driven repayment plan• Increased loan limits, but with school option

to limit

Reauthorization Proposals

• Elimination of loan proration• Elimination of loan forgiveness as a taxable

event• Re-thinking loan subsidies• Separate GRAD Plus and Parent PLUS

Carnac the Magnificent talks Direct Lending…..

Carnac the Magnificent talks Direct Lending…..

• One combined Income Based Repayment method

• More attention to private loans• Increased focus on CDR• Elimination of Subsidized Loans• More clarity and consistency to DL servicing• More schools leaving DL for

default rate concerns

Negotiated Rulemaking

• State authorizations for distance education• State authorization of foreign locations• Debit / Stored Value cards• Definition of adverse credit in PLUS program

Negotiated RulemakingFinancial aid administrators

David SheridanColumbia University in the City of New York

Paula LuffDePaul University

Minority serving institutions

David SwintonBenedict College

George FrenchPresidentMiles College

Two-year public institutions

Brad HardisonSanta Barbara City College

Melissa GregoryMontgomery College

Four-year public institutions

Chuck KnepfleClemson University

J. Goodlett McDanielGeorge Mason University

Private, non-profit institutions

Elizabeth HicksMassachusetts Institute of Technology

Joe WeglarzMarist College

Private, for-profit institutions

Deborah BushwayCapella University

Valerie MendelsohnAmerican Career College

Interested in being more involved?

• Read NASFAA’s news, Insidehighered.com and The Chronicle

• Join the National Direct Student Loan Coalition• Look for SCASFAA/SASFAA/NASFAA

opportunities• Write to your local member of Congress

Questions?