THE FFELP INTEREST RATE CRISIS

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THE FFELP INTEREST RATE CRISIS

• THE SEQUEL
• Just When You Thought it Was Safe.

Scott E. Miller PHEAA NCHELP Spring
Convention Tucson, AZ June 2001
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The Challenges

• Congress
• The Higher Education Community
• Ourselves

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Congress

• Would Like This Issue to Go Away
• Needs to Be Perceived as Pro Student
• Focussed on Elementary/Secondary Reforms
• Taking up most of the time energy
• Dont want to risk messing up those deals
• Bi-partisanship Has Not Taken Hold
• President Bushs bipartisan skills to be tested
• The Jeffords effect

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The Jeffords Effect...

• Senate HELP Committee
• Ted Kennedy (D. MA), Chairman
• Judd Gregg (R. NH) Ranking Republican
• Senate Budget Committee
• Sen. Kent Conrad (D. ND), Chairman
• Sen. Pete Domenici (R. NM), Ranking Republican
• Senate Labor/HHS/Ed Appropriations Subcommittee
• Sen. Tom Harkin (D. IA), Chairman
• Sen. Arlen Specter (R. PA), Ranking Republican

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House of Representatives Leaders

• Education and the Workforce Committee
• John Boehner (R. OH), Chairman
• George Miller (D. CA), Ranking Democrat
• Subcommittee on 21st Century Competitiveness
• Buck McKeon (R. CA), Chairman
• Patsy Mink (D. HI), Ranking Democrat
• House Labor/HHS/Ed Appropriations Subcommittee
• Ralph Regula (R. OH), Chairman
• David Obey (D. WI), Ranking Democrat

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Budget Resolution is First Step

• Allows for Extension of Current Formulae Without
  Need for Offsets
• Up to 7.665 Billion over 10 years
• Education committees must report out legislation
  and get blessing of Budget Committees
• While the Republican plan freezes education, it
  provides over 7 billion to increase student loan
  subsidies to banks.

Rep. George Miller
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Higher Education Community

• Reluctant Acknowledgement of the Problem
• Tepid support from ACE
• More genuine support from NASFAA
• Get this issue done before reauthorization
• Litigation hangover
• Want FFELP to offer something for students

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Higher Education Community

• Direct Loan Proponents Ready to Make Mischief
• Students are being deprived of interest rate
  relief
• Greedy banks locking in exorbitant subsidies
• Claim the real cost is 30 billion

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The FFELP Community

• Still Viewed as Greedy
• Famous for Crying Wolf
• Need for a United Front
• Rogue proposals undermine the case for a simple
  solution
• Our enemies relish dividing and conquering
• Goal is to avoid a haircut
• Maximize Grass Roots Resources
• Home-state Members and Senators
• Enlist school partners as allies