Governmental Relations Committee

Legislative Update
Congress is back in session and the House version of the Higher Education Act has been completed. The staff from House Education and Senate Education will work to iron out the differences between the two versions and then go to conference. It is now anticipated that there will not be time before the Easter break, which will place the conference into April as the most likely scenario. Some staffers feel it will at least be finalized prior to the Memorial Day break.

Negotiated Rulemaking for Student Loans
The final meetings for the Title IV loan issues were held the week of March 3. If consensus was reached, we will have a good idea of what the final regulations will provide.

Challenges in the Financial Markets
With the significant impact of the sub-prime mortgage market creating a financial crisis for the economy, other victims of the liquidity issues for auction rate bonds were the municipal bond market and the student loan bond market. Although not based on the same assets, the sub-prime mortgage issue has negatively impacted all auction rate bonds.

Congress and the U. S. Department of Education have been alerted as to the potential liquidity issues that need to be resolved before the fall when students will be returning to school.

All organizations connected to this industry are diligently working to make sure the financing for postsecondary education stays in place for students.

State Legislation
The State Senate Bill that appears to be a copy of the early version of the New York SLATE Act has a House companion bill. It appears now that the sponsor got the idea from reading the New York Times newspaper, not realizing that the original SLATE Act needed several amendments to prevent negative impact to students receiving loan/scholarship benefits from the state or other non-profit entities that reduced their cost of education and addressed state shortages for teachers and nurses.

This legislation is being tracked. You may review the original bill at www.legislature.state.tn.us/bills/currentga/BILL/SB2997.pdf.