MASFAA Government Relations Committee Christine McGuire, Boston University Bernard Pekala, Boston College.

MASFAA Government Relations CommitteeChristine McGuire, Boston University

Bernard Pekala, Boston College

February 8, 2006President Bush signed the Higher Education

Reconciliation Act of 2005 (the “HERA”), Pub. L. 109 171, which made significant changes to the Higher Education Act of

1965, as amended (the “HEA”), and reauthorized the Federal Family Education

Loan (FFEL) Program.

Negotiated Rulemaking Required by the Department

Finished in April without consensus on the whole package of regulations.

Student Lending Accountability, Transparency and Enforcement Act

(SLATE)

Mirrors codes of conduct embedded in agreements entered into between NY Attorney General, lenders and

institutions.

Final Regulations(Federal Register, November 1, 2007)

Preferred Lender Lists must contain at least three unaffiliated lenders.

No lender who offers the institution any benefits may be on a PLL.

Must be reviewed & updated annually. Lenders may not automatically be

assigned through award packaging for first time borrowers.


Institution must disclose

– method and criteria for selecting lenders– Comparative information about interest

rates and other benefits offered by lenders

– That students are not required to use lenders on the list


Lenders are prohibited from

– Any philanthropic activities, in return for being placed on a PLL

– Paying costs of aid administrators attending conferences, or for entertainment at lender-sponsored events

– Conducting in person entrance or exit counseling– Soliciting a school employee to serve on an

advisory board and paying for costs associated with serving on an advisory board


Lenders are permitted to– Offer in-person financial literacy to

students.– Provide short term staffing on an

emergency, non-recurring basis.– Pay for meals, refreshments, and

receptions that are reasonable in cost if scheduled on conjunction with a training, meeting or conference open to all attendees.

Higher Education Opportunity Act (HEOA) of 2008

Added a new Title to the Higher Education Act

Title X: Private Student Loan Improvement

o Specific legislation regarding non-federal educational loans

o Connected the Higher Education legislation to the “Truth in Lending Act”


Title X: Private Loans

Defines a “gift” as: “means or gratuity, favor, discount, entertainment, hospitality, loan or other item having more than a de minimis monetary value, including services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.

Defines a “gift” not to include:– Standard informational material related to a

loan, default aversion, default prevention or financial literacy

– Food, refreshments, training, or informational material furnished as part of a training session or through participation in an advisory council


Title X: Private Loan

Defines a “gift” not to include:– Philanthropic contributions to a covered

educational institution from a private educational lender that are unrelated to private education loans



Prohibits certain gifts and arrangements – A lender may not directly or indirectly:

Offer gifts in exchange for an advantage or consideration for private education loan activities

Engage in revenue sharing



Co-Branding:

A private educational lender many not use the name, emblem, mascot or logo of the institution, in the marketing of the loan

Advisory Board Compensation:

However, allows for the reimbursement of reasonable expenses incurred as part of service on an advisory board



Prohibits:

Prepayment or Repayment fees or penalites:

Makes it unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan.



Prohibits:

What approach should schools be taking regardless of whether DL or

FFELP?Articulate clear policies regarding:

Institutional gift policyConflict of interest policyDisclose the process for evaluating

the lenders or loans recommended, regardless of Federal or private credit

Campus Considerations

Options??

No listsPartial lists

UG OnlyGrad OnlyBy ProgramBy SchoolFFELPPrivate


Options??

How many on the listList Types

Inclusive (All)VolumeBenefit


Information Collection Options??

Request For ProposalsRequest For Information

MASFAA’s RFI Template

MASFAA Government Relations Committee provided a packet of templates and information in February 2008.

•The professional information was intended as a best practice sharing of information

•NOT intended to be used “as is”

•The templates should have been modified for your campus

•Use of these materials provides no assurance of complete compliance


ExternalCover LetterRFISavings Answer Sheet

InternalRFI Comparison MatrixSavings Worksheet

DisclosureWebPaper


FEEDBACK TIME:If you used them, what are your

positive and negative commentsShould we revise for 2009?Should we issue a private loan

version?If you didn’t use them, why not?Would you have if they had been

different?

Approximately 20 schools used the templates as indicated on the MASFAA listserv.

DISCUSSIONDISCUSSIONand and

QUESTIONSQUESTIONS

DISCUSSIONDISCUSSIONand and

QUESTIONSQUESTIONS

MASFAA Government Relations Committee Christine McGuire, Boston University Bernard Pekala, Boston College.

Documents

higher education legislation

private education loanshigher

higher education acttitle

private educational

unaffiliated lenders

private loansdefines

private loandefines

package of regulations