Team I
Lender and Guaranty Agency Issues

First Meeting
January 19-20, 1999
Washington, DC

This meeting commenced at approximately 8:30 a.m. on January 19, 1999, as scheduled, and adjourned on January 20, 1999, at approximately noon.

All members, except Legal Services Counsel, and the facilitators were present.

The facilitators and the spokespersons were introduced and brief oral descriptions of the member organizations were provided.

A document specifying the organizational protocols adopted by the members on January 11, 1999, was distributed. The facilitators reviewed the format including "workshop" and negotiations meetings, as well as certain of the protocols.

A request for Committee membership by the Guaranty Agency CEO Caucus was accepted by the Committee and that member's spokesperson joined the discussion.

There was also some discussion of the agenda and schedule for this two-day meeting. It was understood that the agenda of issues would be comprised those issues listed on the pertinent attachment to the Department of Education's December 29, 1998, "Dear Colleague" letter, as well as any issues added by the Committee.

It was further understood that this "workshop" meeting was intended to provide the Department with information as to the members' views of those issues so that the Department could draft a negotiations text for use in subsequent negotiations meetings. The format of this discussion was to move through the list of issues allowing all members to present their views, with the understanding that the Department may probe those views in aid of its draft preparation. In doing so, members expressed their views on, among other factors, whether issues should be categorized:

1. No regulation required.
2. Regulation required, but no negotiation necessary.
3. Regulation required, to be negotiated to take effect by July 1, 2000.
4. Regulation required, to be negotiated to take effect by July 1, 2001.

All of the listed issues, as well as issues added by the Committee, were discussed on January 19, 1999. The issues added by the Committee were referred to as:

• The recall of federal reserves.
• The use of federal non-liquid assets.

On the basis of this progress it was decided that the meeting of January 20, 1999, would be devoted to more incisive discussion of some items placed in the third category, above; and that the Department would attempt to present a preliminary negotiations draft to the Committee at its second meeting, thus accelerating negotiations that had been scheduled for the third meeting. This draft will include regulatory provisions for the items placed in the second and third categories. No provisions will be included for items that are considered to require no regulation (category one). However, it was reemphasized that no final category placement decisions had been agreed upon, and that the categories were only used to assist in the preparation of a negotiations draft.

In the matter of the issue referred to as Federal Fund, the Department indicated that, during the interim between the Committee's first and second meeting, it would issue guidance to set the date for agencies to use in determining the amount of money to be placed into the new federal fund, which would thereby place that matter beyond the scope of the Committee's negotiations.

The Committee also expressed the suggestion that the issues referred to as "prohibited inducements," "bankruptcy," and "origination fee" should be included among the issues covered by Team II.

Regarding the agenda for the Committee's second meeting, scheduled for February 16 and 17, 1999, at 8:30 a.m., it was agreed that the major item would be discussion of the preliminary negotiations draft to be distributed by the Department as much in advance of the meeting as practicable.

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