Federal Student Aid

Strategic Plan FY 2012–16

U.S. Department of Education | Federal Student Aid

www.FederalStudentAid.ed.gov

Funding America’s Future, One Student at a Time

Federal Student Aid

Strategic Plan

Fiscal Years 2012–16

U.S. Department of Education

Federal Student Aid | 2012
Counselors and Mentors Handbook

ii | Federal Student Aid

U.S. Department of Education

Arne Duncan

Secretary

Federal Student Aid

James W. Runcie

Chief Operating Officer

December 2011

This publication is in the public domain. Authorization to reproduce it in whole or in part is granted. While permission to 

reprint is not necessary, the citation should be: U.S. Department of Education, Federal Student Aid, Federal Student Aid: 

Strategic Plan, Fiscal Years 2012–16, Washington, D.C., 20202.

This publication is available at the Department’s website at http://federalstudentaid.ed.gov/about/performance.html.
iii

Strategic Plan FY 2012–16 | iii

Message from the Chief Operating Officer

Dear Federal Student Aid Colleagues, Partners, and Customers:

I am pleased to present Federal Student Aid’s (FSA’s) Five-Year Strategic Plan. This plan describes Federal Student 

Aid’s strategy for meeting its goals and objectives for fiscal years (FY) 2012–16. Specifically, the plan addresses 

FSA’s efforts to increase customer service for students and families, protect taxpayer interests, develop efficient 

processes and effective capabilities, and strengthen its performance culture while delivering federal grants, loans, 

and work-study assistance to America’s students. Together these actions represent a key part of the strategy for 

achieving President Barack Obama’s goal for the United States to once again have the highest proportion of college 

graduates in the world. 

Last year’s release of Federal Student Aid’s Five-Year Strategic Plan (FY 2011–15) introduced a set of goals and 

objectives stemming from FSA’s newly adopted mission, Funding America’s Future, One Student at a Time. With 

this purpose in mind, FSA established goals and objectives focusing on a renewed commitment to its customers—

students and their families. 

The FY 2012–16 Five-Year Strategic Plan builds on the prior year’s plan by clarifying FSA’s objectives and updating 

organizational performance standards to better reflect our progress in meeting the stated objectives. For example, we 

will increase the scope of the Customer Experience Office to include data management and social media strategy. We 

will augment our business processes and strengthen our information technology systems to better protect student 

data. More generally, I am challenging our leadership team to develop new and innovative methods to enhance aid 

delivery in an effort to improve customer service, streamline operational costs, and increase program integrity.

Updates to our strategic plan were driven by key operational challenges FSA is expected to face in the coming years. 

These include growth in the size and scope of our business, which will demand commensurate increases in fiscal 

discipline and innovation in business processes, risk management, and program compliance. In addition, growing 

postsecondary enrollment, lower levels of per capita discretionary income, and higher educational costs will require 

increased operational capacity, system integrity, and business efficiency.

FSA remains steadfast in its commitment to improving Title IV administration, increasing access for students, and 

safeguarding taxpayer interests. I look forward to working with my distinguished colleagues within FSA and from 

across the federal government and higher education community to achieve our goals to best serve our nation’s 

students and families.

James W. Runcie

Chief Operating Officer
Counselors and Mentors Handbook

iv | Federal Student Aid
v

Strategic Plan FY 2012–16 | v

Contents

Message from the Chief Operating Officer................................................................................................................ iii

List of Exhibits............................................................................................................................................................ vi

1. Overview of Federal Student Aid.............................................................................................................................1

2. Key Trends Shaping FSA’s Strategy ..........................................................................................................................6

3. FSA’s Strategic Goals and Objectives .................................................................................................................... 14

 Strategic Goal A: Provide superior service and information to students and borrowers. ........................... 16

 Strategic Goal B: Work to ensure that all participants in the system of funding postsecondary 

education serve the interests of students, from policy to delivery. ................................................................. 17

Strategic Goal C: Develop efficient processes and effective capabilities that are among the best 

in the public and private sectors. ....................................................................................................................... 19

 Strategic Goal D: Ensure program integrity and safeguard taxpayers’ interests. ......................................... 21

 Strategic Goal E: Strengthen FSA’s performance culture and become one of the best places 

to work in the federal government. ................................................................................................................... 22

4. Performance Goals ................................................................................................................................................ 24

5. Internal Capabilities ............................................................................................................................................. 27

6. Relationship to the Department of Education’s Strategic Plan ........................................................................... 28

7. External Risk Factors and Potential Challenges.................................................................................................. 29

8. Evaluating Progress ............................................................................................................................................... 30

9. Moving Forward .................................................................................................................................................... 31
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vi | Federal Student Aid

Exhibits

Exhibit 1: FSA’s mission and core values....................................................................................................................2

Exhibit 2: Summary of federal aid disbursed to students, by program ...................................................................3

Exhibit 3: Federal student aid disbursed to students: FY 2010–16 (Estimated).....................................................4

Exhibit 4: Role of FSA and other participants in federal student aid system..........................................................5

Exhibit 5: Historical and estimated average costs of attendance, by institution type: Various years ....................7

Exhibit 6: Changes in non-federal funding: 2007–10 ...............................................................................................8

Exhibit 7: Decline in State support for higher education: Various years.................................................................9

Exhibit 8: Student enrollment by age: Various years; and total civilian labor force age 25 and 

older, by level of educational attainment: 2010..................................................................................... 10

Exhibit 9: Enrollment and cohort default rate, by type of institution: Various years.......................................... 11

Exhibit 10: Percent of students taking classes online: 2002–09 ............................................................................ 12

Exhibit 11: Changes in FSA workloads and resources: FY 2006–10 and estimated for 2011–12....................... 13

Exhibit 12: FSA’s year-by-year performance goals: FY 2012–16 ........................................................................... 26

Exhibit 13: Performance evaluation tools............................................................................................................... 30
1

Strategic Plan FY 2012–16 | 1

F

ederal Student Aid (FSA) plays a central and essential 

role in the United States’ system of postsecondary 

education. As a principal office of the United States 

Department of Education (the Department), FSA ensures 

that all eligible Americans can benefit from federal financial 

assistance for education or training beyond high school. 

FSA champions the promise of postsecondary education to 

all citizens and promotes its value to society. 

Under the Higher Education Act (HEA) Amendments of 

1998, FSA was transformed into the federal government’s 

first Performance-Based Organization (PBO) to enhance 

its services through increased flexibility and performance 

incentives in exchange for greater accountability and 

results. The PBO legislation directed FSA to integrate 

disparate systems, improve service to its customers 

(defined as students, their families, and borrowers), reduce 

operating costs, and restore integrity to the systems and 

processes that deliver the Federal Student Aid programs. 

FSA emphasizes tangible results and efficient performance, 

as well as the continuous improvement of the processes and 

systems that support its mission. This plan fulfills Section 

141(c)(1) of the HEA, which requires a performance plan 

for the PBO for the succeeding five years that establishes 

goals and objectives for the organization be made available 

to the public. This plan was informed by and shared with 

those interested parties and identified entities included in 

Section 141(c)(1)(B) prior to its release. 

FSA’s mission is student-focused, which drives a vision 

to be a reliable provider in student financial aid services 

and postsecondary education information to students. 

The core values reflect a culture of integrity, excellence, 

and collaboration — key components in building a highperforming organization (Exhibit 1). 

During FY 2010, FSA disbursed approximately $145 billion 

in federal aid to nearly 14 million postsecondary students 

and borrowers (Exhibit 2). These students attend 

approximately 6,300 institutions of postsecondary 

education accredited by dozens of agencies. The aid 

disbursed to students is expected to grow, on average, 

5.7 percent per year over the next five years (Exhibit 3). 

In order to administer the Title IV programs, FSA is 

responsible for a range of functions across the student 

aid lifecycle: educating students and families about the 

process of obtaining aid, processing millions of student 

financial aid applications, disbursing billions of dollars 

in student aid, insuring billions of dollars in existing 

student loans, enforcing financial aid rules and regulations, 

servicing millions of student loans, securing repayment 

from borrowers who have defaulted on their loans, and 

partnering with schools, financial institutions, and guaranty 

agencies to prevent program fraud, waste, and abuse. To 

complete these functions, FSA’s FY 2011 discretionary 

and mandatory appropriation was approximately 

$1.083 billion, and the current on-board staff is more 

1. Overview of 

Federal Student Aid
Counselors and Mentors Handbook

2 | Federal Student Aid

EXHIBIT 1: FSA's mission and core values

Our Mission

Our Vision

Our Core Values

Funding America's Future, 

One Student at a Time

To be the most trusted and reliable source of student 

financial aid information and service in the nation

Integrity: Do the right thing above other interests and 

hold everyone accountable

Customer Service: Know what our customers want 

and ensure we meet their expectations

Excellence: Strive to be the very best in all we do by 

embracing a culture of continuous improvement

Respect: Value individuals by acknowledging the 

diversity of their contributions, ideas, and beliefs

Stewardship: Uphold the sacred trust of taxpayers 

as we work to support the goals of Congress and the 

Administration

Teamwork: Work in collaboration with our colleagues 

and partners to produce the best possible results
3

Strategic Plan FY 2012–16 | 3

EXHIBIT 2: Summary of federal aid disbursed to students, by program

(Dollars in Millions)

Grant Programs

Federal Pell Grant Program $36,515 $ 28,213 $ 8,302 29%

Academic Competitiveness Grants 548 503 45 9%

National Science and Mathematics Access to Retain Talent Grants 384 361 23 6%

The Teacher Education Assistance for 

College & Higher Education Grants 109 72 37 51%

Federal Supplemental Educational Opportunity Grants 959 959 -- --

Leveraging Educational Assistance Partnerships Program 162 162 -- --

Subtotal Grants $ 38,677 $ 30,270 $ 8,407 28%

Loan Programs

Federal Perkins Loan Program $ 971 $ 1,106 $ -135 -12%

Federal Direct Loan Program 84,703 29,738 54,965 185%

Federal Family Education Loan Program 19,617 66,778 -47,161 -71%

Subtotal Loans $ 105,291 $ 97,622 $ 7,669 8%

Work-Study Programs

Federal Work-Study Program $ 1,171 $ 1,417 $ -246 -17%

Grand Total $145,139 $ 129,309 $ 15,830 12%

SOURCE: Department of Education, Budget Summary FY 2011 and FY 2012

Programs

FY 2010

Aid Disbursed 

to Students

FY 2009

Aid Disbursed 

to Students Difference

Percent Increase/

Decrease
Counselors and Mentors Handbook

4 | Federal Student Aid

EXHIBIT 3: Federal student aid disbursed to students:

FY 2010–16 (Estimated)

than 1,200 employees who are based in Washington, D.C., 

and across 10 regional offices. FSA staff is augmented by 

contractors, who provide outsourced business operations 

such as customer service, loan servicing, and collections. 

In addition, there are other federal agencies, State entities, 

and secondary markets that support the FSA community. 

This complex, multifaceted mission requires a range 

of staff skills and demands coordination by all levels of 

management in order to meet the needs of the various 

federal student aid participants (Exhibit 4). 

z Federal Grants*

z Federal Loans

$ Billions (current $)

13.8 16 17.3 18.7

40

$145

105

2010

38

$167

129

2012 

(requested)

40

$184

144

2014 

(estimated)

43

$204

161

2016 

(estimated)

*Primarily Pell Grants

SOURCE: Department of Education, Budget Summary “Aid Available to Students” FY 2010, 2011 and 2012, and FSA 

Team Analysis

Students aided (millions)
5

Strategic Plan FY 2012–16 | 5

EXHIBIT 4: Role of FSA and other participants in federal student aid system 

STUDENTS

Receive and repay student aid to 

finance postsecondary education.

FSA supports them by:

•	increasing awareness of federal

student aid

•	providing products,services

and tools to ensure consistent, 

accurate messaging about 

the importance of pursuing 

postsecondary education, and 

•	identifying students for whom

financial assistance can make a 

difference.

POSTSECONDARY

INSTITUTIONS

Determine students' aid packages and disburse funds.

FSA supports them by:

•	monitoring compliance

• educating them regarding policy

• assisting them in meeting requirements

FSA-CONTRACTED

SERVICERS

1) Service Direct Loan portfolio and portions of FFELP portfolio, 

2) Provide systems and services to support FSA's core 

operations (e.g., applications, disbursements), and 

3) Recover funds from defaulted loans.

FSA supports them by:

•	acquiring the service

• setting performance standards

• overseeing operations

FFEL LENDERS

Hold and service outstanding 

FFELP loans to students.

FSA supports them by:

•	monitoring compliance

• assisting them in meeting

requirements

• paying interest and Special

Allowance Payment

• educating them regarding policy

THE PRESIDENT, 

ED, & OTHERS 

IN EXECUTIVE BRANCH

Set regulatory standards and 

policy on student aid funding.

FSA supports them by:

•	providing data and information

for decision making

•	providing recommendations for

implementation

GUARANTY

AGENCIES

Insure FFELP loans and service 

their defaulted loan portfolio.

FSA supports them by:

•	monitoring compliance

• assisting them in meeting

requirements

• educating them regarding policy

• paying default claims

CONGRESS

Sets statutory standards on 

student aid funding and 

appropriate budgets.

FSA supports them by:

•	providing data and information

for decision making

•	providing updates on

operational performance
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6 | Federal Student Aid

Trend 1: 

The rising cost of attendance for 

postsecondary education 

The cost of attending public four-year institutions has 

grown at a rate of 6.5 percent per year from 2001 through 

2010. The trend is similar across all sectors of postsecondary 

institutions (Exhibit 5). If this trend continues, the cost of a 

public education in 2016 will be well over twice the 2001 

cost. Even though the law mandates a maximum on grant 

and loan amounts per student, the increased cost of higher 

education increases the need for FSA to ensure that eligible 

borrowers are aware of federal student aid options and are 

able to finance their education.

The rising cost of college may make it increasingly 

difficult for students to access and complete their 

postsecondary education. In an effort to offer prospective 

students and parents accurate and accessible data on 

college, the department now provides postsecondary 

institutional information about tuition, fees, and net 

prices (the price of attendance after applying grant and 

scholarship aid). All information can be accessed through 

the College Affordability and Transparency Center at 

http://collegecost.ed.gov/. The Center includes information 

for students, parents, and policymakers about institutional 

costs at America’s colleges and universities. Institutions are 

listed by the highest and lowest costs of tuition, required 

fees, and net prices. Lists of institutions that had the highest 

increase in tuition, required fees, and net prices are also 

provided. These lists meet requirements outlined in the 

Higher Education Opportunity Act (HEOA) and will be 

updated annually by July 1.

As the cost of attendance goes up, the average indebtedness 

of today’s students is increasing (http://www.ticas.org/

files/pub/classof2009.pdf). The risk of taking on more 

debt is even greater to those borrowers who leave school 

before obtaining a degree or certificate because they are 

still responsible for repaying any loans received, despite 

not receiving a degree or certificate. To help borrowers 

better manage their debt after graduation, federal loan 

programs offer loan repayment plans designed to meet 

the specific needs of borrowers. The federal loan programs 

allow a borrower to choose his or her repayment plan and 

to switch plans if the borrower’s financial situation changes. 

An important new option is the income-based repayment 

(IBR) plan. This plan gives borrowers the flexibility to 

meet their federal student loan obligations without causing 

undue financial hardship. Each year, a borrower’s monthly 

payments are calculated based on the borrower’s adjusted 

gross income, family size, and the total amount of his or 

her federal student loans. The maximum repayment period 

is 25 years and if the loan(s) are not fully repaid within 25 

years, the unpaid portion will be discharged.

2. Key Trends 

Shaping FSA’s Strategy
7

Strategic Plan FY 2012–16 | 7

EXHIBIT 5: Historical and estimated average costs of attendance, by institution type: Various years

$ Thousands (current $) Assuming same 

 rate of growth

NOTE: Average published tuition, fees, room and board, per annum

*Room and board not included in calculating averages for public 2-year institutions and proprietary institutions

**Data prior to 2006 not available

SOURCE: The College Board, “Trends in College Pricing 2010” (Tables 5B and 1A) estimated 2016 based on trendline

Private

four-year 

Institutions

Public

four-year 

Institutions

Public

two-year 

Institutions*

Proprietary 

Institutions*

20.7

8.6

1.7

11.4

32.9

15.1

2.9

13.9

44.9

22

4.0

18.9

2001

2001

2001

2006**

2010

2010

2010

2010

2016 (est)

2016 (est)

2016 (est)

2016 (est)

5.3% 

per year

6.5% 

per year

5.7% 

per year

5.2% 

per year
Counselors and Mentors Handbook

8 | Federal Student Aid

Trend 2: 

The decline in availability of 

non-federal sources of 

postsecondary education funding

The need for student aid, from all sources, will continue 

to increase over the next five years. The availability of 

non-federal aid and loans has decreased. Private loan 

originations continue to decline because fewer lenders are 

willing to make unsecured loans (Exhibit 6). In addition, 

State support for funding higher education has declined 

since 2008, reducing the resources postsecondary institutions 

have to administer Title IV programs. Finally, the American 

Recovery and Reinvestment Act (ARRA) funds that assisted 

with the State shortfalls expire in 2012 (Exhibit 7). The 

overall effect of these factors will likely increase the demand 

for federal student aid in order to offset these reductions.

EXHIBIT 6: Changes in non-federal funding: 2007–10

SOURCE: The College Board, “Trends in Student Aid” 2010 (prepared in October 2010)

Private Student Loan Originations ($ billions)

11.2

22.5

8.5

2007–08 2008–09 2009–10

-50%

-24%
9

Strategic Plan FY 2012–16 | 9

Trend 3: 

Anticipated increase in enrollment

Despite the rising costs of tuition in recent years, 

the percent of students enrolling in degree-granting 

institutions continues to increase. The new "knowledge 

economy" is creating higher-paid jobs, but most require 

education beyond high school. A higher salary may 

incentivize the 61 million individuals who are older than 

25 with only high school diplomas to benefit by obtaining 

a postsecondary education. 

Total postsecondary enrollment is expected to grow 

15 percent between 2009 and 2019. Although enrollment 

growth of nontraditional students has eclipsed that of 

traditional students, the imbalance is expected to shift. 

Projected growth between 2009 and 2019 shows traditional 

student enrollment growing at 16 percent while enrollment 

for students older than 25 grows at 13 percent (Exhibit 8).

EXHIBIT 7: Decline in State support for higher education: Various years

z ARRA

z State

State & ARRA* Investment in Higher Education 

($ Billions, current $)

* American Recovery and Reinvestment Act – Sunsets in 2012

SOURCE: State Higher Education Finance FY 2010, FY 2009 and FY 2008

2007 2008

55.0

50.0

60.0

65.0

70.0

75.0

80.0

85.0

2009 2010 2011 (est)

77.0

80.7

78.3

74.8

76.1

2.8 4.8

2.3

Local 

Taxes

State

Support

Net

Tuition

ARRA*

Funding of Higher Education 

Operating Costs, by Type of 

Funding (percent)

SOURCE: State Higher Education Finance FY 2010

z 2010

z 2009

34%

36%

58%

54%

6%

6%

2%

3%

2008–2011

decrease -2.2%
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10 | Federal Student Aid

EXHIBIT 8: Student enrollment by age: Various years; and total civilian labor force 

age 25 and older, by level of educational attainment: 2010

z Bachelor's

& higher

z Associate

degree

z Some college,

no degree

z High school

graduates, no

college

z Less than a

high school

diploma

10%

17%

61

 million

29%

9%

2010

Educational Attainment of Civilian 

Labor Force Age 25 & Older 

(millions of adults)

35%

100% = 133 million adults

SOURCE: Bureau of Labor Statistics, Labor Force 

Statistics, Table 7, last accessed 3/4/2011 

http://www.bls.gov/cps/cpsaat7.pdf

z 35 & older

z 30–34

z 25–29

z Under 25

Student Enrollment in Degree-Granting Institutions by Age 

(millions of students)

2.6

1.4

2.0

1.8 1.6 1.7 1.5

3.1

3.6 3.2 2.9 3.1 2.7

4.1

3.6

3.8 3.4

3.2

11.2

18.2

19.1

20.4 20.6

21.7

23.4

13.7 12.6 13.1

11.8 11.7

2007 2008 2009 2010 (est) 2014 (est) 2019 (est)

NOTE: Details may not sum to total due to rounding

SOURCE: Digest of Education Statistics: 2010 Table 199 (Projections from 

2010 through 2019)

 
11

Strategic Plan FY 2012–16 | 11

Trend 4: 

Increase in enrollment at two-year

and proprietary institutions, and 

distance learning. 

Proprietary and two-year institutions play an increasingly 

important role in addressing some of our country’s most 

pressing challenges — global workforce competition and 

an increased demand for a highly skilled labor force, to 

name a few. The growth in enrollments at proprietary 

and two-year institutions has soared in recent years. This 

dramatic increase has produced its own unique set of 

challenges, including higher student loan default rates 

(Exhibit 9). 

Distance learning is creating a new trend in the way 

college students attend classes and earn their degrees 

because of the flexibility, convenience, and growing 

acceptance of online courses. Besides the advantages for 

EXHIBIT 9: Enrollment and cohort default rate, by type of institution: Various years

Public

2 -year

Overall

Public

4-year (+)

Private

Proprietary

Two-Year Cohort Default rate, by 

Type of Institution (percent)

Source: U.S. Department of Education, FSA Office, Direct Loan 

and Federal Family Education Loan Program, 'Institutional 

Default Rate Comparison of FY 2006, 2007, 2008 Cohort 

Default Rates,' last updated September 13, 2010. http://

www2.ed.gov/offices/OSEAP/defaultmanagement/instates.

html, last accessed February 28, 2011.

z 2007

z 2008

4.0%

3.7%

4.4%

4.3%

10.1%

9.9%

11.6%

11.0%

7.0%

6.7%

z Public

z Private, not-for-profit

z Proprietary

Enrollment, by Institution Type

Note: The sum of percentages may not total 100 percent because of rounding.

Source: NCES, Department of Education (2001 and 2007), and Integrated 

Postsecondary Education System (IPEDS), Fall 2009

2001 2007 2009

7% 11% 3%

18%

20%

21%

77% 74% 71%

16

18

21

Millions of enrolled students

Total Growth

since 2001

31.6%

22.1%

19.7%

325%
Counselors and Mentors Handbook

12 | Federal Student Aid

students, institutions use distance learning to address 

State budget cuts and space shortages. During 2006–2007, 

there were more than 11,200 college-level programs 

designed to be completed exclusively online. Sixty-six 

percent of these programs offered degrees and 34 percent 

offered certificates (http://nces.ed.gov/pubsearch/

pubsinfo.asp?pubid=2009044). More recent data shows 

that in 2009, nearly 30 percent of students took at least 

one online course, nearly three times the percent in 2002 

(Exhibit 10). 

EXHIBIT 10: Percent of students taking classes online: 2002–09

2002 2003

5%

10%

15%

20%

25%

30%

35%

2004 2005 2006 2007 2008 2009

Note: Captures proportion of students taking at least one online class compared to total enrollment.

Source: The Sloan Consortium, Class Differences: Online Education in the United States, 2010

Percent Online Enrollment in Degree Granting Postsecondary Institutions 2002–09
13

Strategic Plan FY 2012–16 | 13

EXHIBIT 11: Changes in FSA workloads and resources: FY 2006–10 and estimated for 2011–12

Number of 

borrowers 

serviced 

(millions)

Number of 

FAFSAs

processed

(millions)

FSA budget

($ millions)

Number of

FSA

employees

9.2

14.0

658

1,010

9.3

14.6

644

993

9.7

16.4

630

1,018

31.8

25.0

1,007

1,240

27.7

23.1

897

1,240

21.7

21.4

947

1,192

13.5

19.5

671

978

FY 2006 FY 2008

FY 2011

FY 2007 FY 2009 FY 2010 (estimate)

FY 2012

(estimate)

NOTE: Percentages based on actual numbers, unrounded.

SOURCE: Federal Student Aid, program files

+246%

+78%

+53%

+23%

Trend 5: 

Increased role of the federal 

government in providing funding 

for postsecondary education

The trends already discussed and the projected increase of 

student loan borrowers and aid applications will increase 

FSA’s responsibilities and workload; however, the workforce 

is not expected to increase at the same pace (Exhibit 11). 

For example, by the end of 2012, the number of borrowers 

serviced by FSA is expected to increase 246 percent from 

the FY 2006 baseline. The number of aid applications is 

expected to grow by approximately 80 percent. During 

FY 2012, FSA's budget and on-board staff are projected 

to increase by approximately 53 percent and 23 percent 

respectively. The increase in FSA’s budget is the result of 

transitioning to 100 percent Direct Loans. Even though 

there are increased costs for this program each year, the 

Congressional Budget Office estimated the shift to direct 

lending would save $67 billion over 10 years. 
Counselors and Mentors Handbook

14 | Federal Student Aid

F

irst published in the FY 2011–15 Strategic Plan, FSA's 

five strategic goals are unchanged in this Five-Year 

Strategic Plan. Each strategic goal encompasses 

several objectives which provide further guidance on how 

FSA will achieve the goals. In developing this Five-Year 

Strategic Plan, FSA confirmed the strategic goals defined 

last year and clarified objectives that align with the Mission 

Statement, Vision, and Core Values adopted last year. FSA's 

mission will continue to be the same; however, the means to 

success and the measurements that will be used will change 

based on lessons learned.

3. FSA’s Strategic 

Goals and Objectives
15

Strategic Plan FY 2012–16 | 15

FSA Strategic Goals and Objectives

Work to ensure that all participants in the system of funding postsecondary education serve the interests of 

students, from policy to delivery

Develop efficient processes and effective capabilities that are among the best in the public and private sectors

Ensure program integrity and safeguard taxpayers' interests

Strengthen FSA's performance culture and become one of the best places to work in 

the federal government

•	Take a data-driven approach to better understand our customers and develop insights from these customers

•	Reach out to potential students more effectively to expand access to postsecondary education

•	Aggregate and distribute information on the costs and benefits of postsecondary education programs and on funding options

to improve financial literacy and support the customers’ decision-making

•	Identify students for whom financial assistance can make a difference in completing a degree or credential and develop a plan

to support the president's 2020 college completion goal

•	Enhance customer-facing processes to improve the customer experience

•	Improve FSA's support,communications, and processes for postsecondary and financial institutions

•	Provide ideas, data and analyses to inform policymakers about opportunities and challenges in postsecondary education funding

•	Support system participants in implementing legislative, regulatory, executive, and other requirements

•	Improve quality control and reduce errors, waste, fraud, abuse, and mismanagement in the delivery of Title IV aid

•	Manage funds owed to the Department and provide transparency about student aid portfolio risk exposure

•	Improve the integrity of core human capital processes to attract, develop and retain talented FSA employees from diverse

backgrounds; help them achieve their full performance potential and recognize their contribution to FSA's mission

•	Further develop a student-centric culture among all managers and employees that will fully deliver on FSA's mission,vision,

and strategy

•	Deliver funds to students accurately, efficiently, and promptly to create high levels of customer satisfaction

•	Strengthen FSA's Information Technology (IT) function to achieve systems modernization and active management of technology

to ensure that FSA delivery systems are secure and privacy of personal information is maintained

•	Continuously refine and manage FSA's acquisition strategy and contract performance to realize cost savings and operating

efficiencies, and mitigate risk

•	Improve the organizational capacity to anticipate and manage external change

•	Enhance the risk management organization, systems, and processes

•	Develop a methodology to measure and track cost reductions to increase efficiency and productivity

•	Build stronger business management capabilities and increase operational transparency to improve cross-functional

coordination

Provide superior service and information to students and borrowers
Counselors and Mentors Handbook

16 | Federal Student Aid

Strategic Goal A: 

Provide superior service and 

information to students and 

borrowers.

FSA’s mission is to ensure that all eligible individuals 

benefit from federal student aid. In order to achieve this 

goal, FSA goes to great lengths to increase awareness about 

the availability of student financial assistance. Through 

expansion of its products, services, and tools, FSA provides 

consistent, accurate postsecondary information. 

Objective 1: 

Take a data-driven approach to better understand 

our customers and develop insights from these 

customers.

FSA filled the position of Chief Customer Experience 

Officer (CCEO) in 2010. One of the first efforts of the CCEO 

was to establish the Customer Analytics Group (CAG). 

This group gathers, analyzes, and reports on FSA customer 

behavior, issues, and feedback. The CAG helps to ensure 

that FSA policies and programs are data-driven, analyzing 

data contained in customer surveys as well as other sources 

of data on customers from across the student aid lifecycle. 

In the near future, the CAG will develop collaborative 

relationships to obtain data, research, and reports through 

which the CAG can better assess its customers and their 

needs to better support college access and completion. The 

CAG will also develop a system of customer segmentation 

that will identify student/family/influencer profiles and 

needs through the analysis of customer geographic, 

demographic, and behavioral data. The CAG will analyze 

data on student repayment trends, and help develop 

data-driven strategies for reducing the number of defaults 

from across its customer base. The CAG will also work to 

develop Free Application for Federal Student Aid (FAFSA) 

completion goals that support President Obama’s 2020 

college completion goal. 

By analyzing data from all sources, the CAG will work to 

improve the customer experience for students and families 

across the student aid lifecycle. In addition, the CAG 

will provide data to other FSA business units to ensure 

appropriate risk assessment and program management, and 

provide monthly and quarterly customer reporting to FSA’s 

senior leadership.

Objective 2: 

Reach out to potential students more effectively to 

expand access to postsecondary education. 

As part of FSA’s new customer engagement strategy, FSA 

will take advantage of new communication tools including 

social media to listen, monitor, and engage with customers. 

FSA will measure and report results from these efforts to 

track trends and aggregate relevant conversations. FSA will 

have additional insights and information to inform future 

development and improvements to its products and 

services.

Objective 3: 

Aggregate and distribute information on the 

costs and benefits of postsecondary education 

programs and on funding options to improve 

financial literacy and support the customers’ 

decision-making.

With increased tuition costs, it is critical that future 

student aid recipients have the best information available 

to support their decision-making. The Department and 

FSA are continuing efforts to provide students and their 

families with data they can use to better inform their choice 

for higher education. Beginning July 1, 2011, prospective 

students began to receive additional information from 

career and vocational colleges. Schools with gainful 

employment programs — those programs that are required 

to lead to gainful employment in a recognized occupation 

— will report certain information about their students, 

including the median loan debt incurred by students who 

completed the program, the tuition and fees the institution 

charges a student, and the job placement rate for students 

completing the program, among other information. 

Institutions with gainful employment programs are 

required to disclose these details in promotional materials 

and on their websites. Additionally, the Department is 

developing plans to post this information on its own site. By 

increasing students’ understanding of the relative financial 

value of different degree programs and funding options, 

FSA can help students make informed decisions in order 
17

Strategic Plan FY 2012–16 | 17

to receive the maximum benefits from their education and 

become well positioned to repay their loans. 

Objective 4: 

Identify students for whom financial assistance

can make a difference in completing a degree 

or credential and develop a plan to support the 

president’s 2020 college completion goal. 

The economy and job market require that more workers 

than ever develop skills and master knowledge beyond 

the high school level. Although progress has been made 

over the years to increase participation and graduation 

levels for all individuals, work needs to continue to address 

the gaps for low-income students and non-traditional 

students. Increasing completion rates and the number of 

graduates is a priority of President Obama’s administration, 

as evidenced by the president’s 2020 goal to have the 

highest proportion of college graduates in the world. FSA’s 

continuing work on the recently created FAFSA Completion 

Project supports this initiative. The goal of this project is to 

increase FAFSA submissions by students from populations 

who are traditionally underrepresented in postsecondary 

education, for example, first generation, African-American, 

and Latino students, as well as students from low-income 

families. The correlation between FAFSA completion and 

college enrollment is strong. The Educational Longitudinal 

Survey (ELS) indicates that 56.9 percent of the high school 

seniors complete a FAFSA, and 90 percent of those who 

complete a FAFSA enroll in postsecondary education. 

In collaboration with key stakeholders in Albuquerque, 

Boston, Philadelphia, Detroit, St. Louis, and Baltimore, 

the FSA project team established 26 centers and trained 

360 volunteers who participated in more than 180 FAFSA 

completion events. The project team will expand its efforts 

to additional cities in 2012. FSA also expects to expand a 

pilot program launched in 2010 which provided FAFSA 

completion data to 20 entities across the country so each 

entity could focus its resources on students who did not 

complete the application as part of their comprehensive 

college and career readiness strategy. In the future, this 

program will include an additional 100 sites. These efforts 

undertaken by FSA support the president’s vision of 

postsecondary attainment for all Americans.

Objective 5: 

Enhance customer-facing processes to improve the 

customer experience.

FSA has significantly simplified the FAFSA by reducing 

the number of questions by approximately 30 percent; in 

addition applicants also have the ability to retrieve tax data 

directly from the Internal Revenue Service (IRS) in order to 

import that data directly into the application. Future FAFSA 

simplification plans would assist in reducing improper 

payments within the Pell Grant program by allowing for a 

more customized interaction with the IRS Data Retrieval 

tool to encourage increased usage and more accurate data 

for determining eligibility for Title IV aid. 

To comply with the Obama administration’s Executive 

Order 3571, Streamlining Service Delivery and Improving 

Customer Service, issued April 27, 2011, FSA is working to 

consolidate 14 student-facing websites into one Integrated 

Student View (ISV) that serves students throughout the 

student aid lifecycle, from awareness and application to 

repayment. ISV will be part of a larger integrated student 

experience initiative that will eventually include social 

media and mobile applications. Additionally, efforts are 

under way to streamline and improve publications based on 

customer feedback and plain language standards.

Strategic Goal B: 

Work to ensure that all participants 

in the system of funding 

postsecondary education serve the 

interests of students, from policy to 

delivery.

FSA plays a vital role within the system of funding 

postsecondary education in the United States. While the 

Office of Postsecondary Education (OPE) within the 

Department is responsible for matters related to 

postsecondary policy and regulation development, FSA 

works closely with OPE, other offices within the 

Department, and Congress to inform policy related to 

student financial assistance. FSA also works with the 

postsecondary community: It provides oversight and 
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18 | Federal Student Aid

support to postsecondary institutions; interacts with 

students and their families; and coordinates the activities 

of different contractors, including servicers and private 

collection agencies.

Objective 1: 

Improve FSA’s support, communications, 

and processes for postsecondary and 

financial institutions.

FSA works closely with postsecondary institutions to 

provide millions of students with federal student aid. 

Successful student aid delivery depends on FSA's ability 

to work well with its institutional, financial, and State 

partners to support them with technical assistance and 

provide adequate oversight to ensure that participants are 

complying with program requirements. FSA will work to 

ensure that all participants in the postsecondary education 

funding system can easily access the information they need 

to support their role. FSA will work with all participants to 

provide data and share knowledge to lead to improvements 

in the quality of higher education and postsecondary 

financing options. These activities will strengthen FSA’s 

relationships and ensure that its institutional, financial, and 

State partners are functioning at their best in the service of 

FSA’s customers. 

Objective 2: 

Provide ideas, data, and analyses to inform 

policymakers about opportunities and challenges in 

postsecondary education funding.

The PBO legislation included in the HEA contains a 

provision that requires the Secretary of Education to 

request the advice of, and work in cooperation with, 

FSA’s Chief Operating Officer to develop regulations, 

policies, administrative guidance, or procedures affecting 

the information systems administered by the PBO and 

other functions performed by the PBO. FSA’s senior 

management works closely with other Department officials 

and offices in preparation for any legislative or regulatory 

recommendations. FSA’s recommendations focus on ways 

to improve service and ensure the integrity of the federal 

student assistance programs. They may also include other 

recommendations based upon FSA’s ongoing processes, 

interactions, and oversight. 

In FY 2011 FSA created a central information management 

office in order to increase the organization’s capacity 

to manage and coordinate FSA data. This office will 

ensure accurate, timely, consistent, and repeatable data 

by standardizing data element definitions, queries, and 

reports, as well as integrating data across disparate systems. 

This office will also help increase cross-training and core 

skills of key data personnel at FSA. Strengthening this 

office will yield better insights about system improvements 

that can increase FSA's capacity to provide data and share 

knowledge to improve the financial aid programs and the 

quality of education. 

Objective 3: 

Support system participants in implementing 

legislative, regulatory, executive, and other 

requirements.

One of FSA’s major roles is to coordinate and monitor the 

activity of federal, State, nonprofit, and private entities 

involved in federal student aid delivery. Last year’s transition 

to 100 percent Direct Loans was successfully completed 

largely because of the preparation, training, and technical 

assistance provided by FSA. FSA also successfully expanded 

the origination capacity in the Common Origination 

and Disbursement (COD) system and other Direct Loan 

applications to accommodate the increased workload. 

Separate from those accomplishments, FSA awarded four 

new contracts in June 2009 to Title IV Additional Servicers 

(TIVAS) to provide additional servicing capacity for Direct 

Loans as well as loans purchased by the Department 

under the authority granted the Secretary in the Ensuring 

Continued Access to Student Loans Act (ECASLA). These 

servicers are currently servicing more than 13 million 

borrowers who have Direct Loans and Department-held 

FFEL Program loans. In addition to TIVAS, FSA is working 

with more than 20 not-for-profit (NFP) servicers that 

are expected to begin servicing Direct Loans over the 

next 18 months. The first NFP began receiving its initial 

allocation of 100,000 borrower accounts in October 2011. 

To ensure an orderly implementation, FSA plans to bring up 

approximately three entities per quarter beginning in January 

2012 until all entities are fully operational. In addition, FSA 

will continue to employ all communication resources, as well 

as provide training and technical assistance, to fully inform 

and engage FSA’s partners and stakeholders. 
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Strategic Plan FY 2012–16 | 19

Strategic Goal C: 

Develop efficient processes and 

effective capabilities that are 

among the best in the public and 

private sectors.

The primary responsibility of FSA is to deliver the right 

amount of aid, to the right students, at the right time. 

FSA is continually exploring opportunities to improve the 

delivery system’s accuracy and efficiency. 

Objective 1: 

Deliver funds to students accurately, efficiently, 

and promptly to create high levels of customer 

satisfaction. 

FSA is committed to ensuring its federal student aid delivery 

services are prompt, accurate, and professional. FSA plans 

to streamline or simplify current systems and processes in 

support of this commitment. Initiatives in progress or under 

consideration for the next few years include: 

•	 an enhanced online origination tool to provide schools

with more efficient and flexible student aid processing 

options;

•	 a streamlined and more efficient application process for

campus-based funds;

•	 a new platform for the Teacher Cancellation Directory

that will provide a consistent and more readily available 

resource for borrowers and loan servicers; and

•	 an expanded COD system — currently limited to Pell

Grants and Direct Loans — that will also include the 

campus-based programs. This will improve funds control for 

FSA while giving schools more timely access to consolidated 

financial reports on all federal student aid activity.

Objective 2: 

Strengthen FSA’s Information Technology (IT) 

function to achieve systems modernization and 

active management of technology to ensure that FSA

delivery systems are secure and privacy of personal 

information is maintained. 

FSA spent the last year restructuring the approach to IT 

security. By looking beyond the trusted conveniences of 

traditional security, FSA began the implementation of 

Two-Factor Authentication, which combines something you 

know (such as a username and password) with something 

you have (a credential such as a token or card). This will 

greatly strengthen FSA data security while reducing the 

complexity of verifying online identities and transactions 

for employees, customers, and partners. It is delivered as a 

secure, cloud-based service. More than 1,000 tokens were 

distributed to FSA employees who remotely access FSA 

data. In addition, vendors are under contract for system 

modifications of COD, National Student Loan Data System 

(NSLDS), Central Processing System (CPS), Access and 

Identity Management System (AIMS), Project Management 

(PM), and the Student Aid Internet Gateway (SAIG). When 

fully implemented, these system modifications will enable 

the unique identification of all authorized users accessing 

FSA systems. Two-Factor Authentication will improve FSA’s 

overall security posture by reducing the threat of intrusion 

from malicious activities such as keyloggers. This is a 

global initiative encompassing more than 60,000 users at 

postsecondary and financial institutions.

The Target State Vision (TSV) depicts FSA’s future state as 

envisioned for the next five to seven years from a variety of 

business and technical perspectives. It provides a long-term 

vision to drive investments, prioritization, and sequencing 

to meet the requirements of FSA’s Five-Year Strategic Plan. 

The TSV is designed to help synchronize the investment 

plans and priorities across FSA, and provide timely 

information to support other annual processes, such as 

budgeting, capital planning, and business and technology 

decision-making. The TSV was previously updated in 2007 

and will be refreshed on at least an annual basis moving 

forward. The TSV represents a cost-effective approach to 

refine the organizational direction and priorities as they 

adjust to the constantly changing business environment.
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20 | Federal Student Aid

The Integrated Partner Management (IPM) project is 

one initiative included in FSA’s TSV. Its main goal is 

to modernize and integrate the partner management 

operations of FSA's business, and significantly improve 

partner interactions and support. The partner management 

functions include eligibility, enrollment, and oversight 

processes used by institutions, servicers, lenders, and 

guaranty agencies. Classified as a multiyear reengineering 

project, IPM will eventually replace five legacy applications, 

including Application for Approval to Participate in 

Federal Student Aid programs (eApp), Lender Application 

(LAP), Electronic Records Management (ERM), eZ-Audit 

(Financial Statements and Compliance Audit Submissions 

functionality), and the Postsecondary Education 

Participants System (PEPS). The development of IPM will 

help reduce the risk of failure by these antiquated legacy 

systems that are currently beyond their life cycle. IPM will 

provide improved information security through a single 

point of enrollment and access for Title IV partners. It will 

improve program integrity as it employs modernized and 

scalable system platforms to improve the overall efficiency 

in receiving and processing information from partners. 

Objective 3: Continuously refine and manage FSA’s 

acquisition strategy and contract performance to

realize cost savings and operating efficiencies, and 

mitigate risk.

FSA uses contracted vendors for customer service, 

application processing, loan and grant origination and 

disbursement, loan servicing and collections, system 

applications, and infrastructure developments, as well 

as administrative functions. With 85 percent of FSA’s 

administrative budget allocated to vendors, it is essential 

that FSA optimize the services obtained in these privatepublic partnerships. Late in FY 2010, FSA launched the 

Enterprise Strategic Acquisition Plan (ESAP) project 

to further this objective. The ESAP project includes 

several component efforts: FSA Contracts Analysis, 

Benchmarking / Best Practices Surveys, and Enterprise 

Strategic Acquisition Plan. The initial phase of the project 

is complete, and FSA performed a baseline review of FSA’s 

acquisition environment that resulted in recommendations 

and an implementation plan for developing FSA’s strategic 

acquisition maturity. The ESAP provides a roadmap to 

move to more modular systems and contracting structure. 

When fully implemented, this approach will address the 

business objectives FSA needs to deliver on the mission and 

support the Strategic Plan goals. FSA will first establish the 

control and governance capabilities required for a strategic 

acquisition plan to be accepted. FSA will use upcoming 

expiring contracts to analyze existing consolidated 

operations and identify opportunities to build improved 

requirements into new agreements that will support the 

new service-oriented objectives. 

Objective 4:

Improve the organizational capacity 

to anticipate and manage external change.

The environment in which FSA delivers financial aid and 

related services to students changes quickly, due to external 

events including new legislation, administration initiatives, 

economic cycles, and technological changes. FSA’s success 

in meeting future demands relies in large part on its ability 

to anticipate and adapt to external variables. 

Regulations under the HEA were published in the fall of 

2010 and the summer of 2011 to create new eligibility 

measures for programs that must prepare students for 

gainful employment in recognized occupations. FSA has 

developed a comprehensive plan to implement system and 

process changes that are driven by these new regulations. 

FSA established a Gainful Employment Steering Committee 

comprised of senior officials in FSA that works closely 

with the Department’s policy and legal offices. FSA also 

created several cross-functional teams that work with 

FSA’s contractors and other Department offices to support 

the accurate and on-time implementation of the gainful 

employment regulations. These efforts will continue 

beyond initial implementation in 2012 to make any needed 

improvements and enhancements.

Objective 5: 

Enhance the risk management organization, systems, 

and processes

Fulfilling FSA’s broad responsibilities to students, families, 

borrowers, and higher education partners comes with 

a wide range of risks. Robust risk management, from 

operational risk to credit risk, is crucial for FSA to ensure 

the organization maintains the highest standards of 
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Strategic Plan FY 2012–16 | 21

professionalism and operational excellence. Although FSA 

recently took steps to centralize key risk responsibilities and 

made progress in identifying and assessing different types 

of risks across the organization, there are opportunities for 

continued improvement. The need is particularly acute for 

managing the risks throughout the distributed network of 

partners through which FSA delivers federal student aid.

Over the next five years, FSA will work to strengthen 

the central risk management function, while developing 

enterprise-wide systems and processes for identifying, 

quantifying, monitoring, and mitigating risks. FSA will 

increase central oversight of all risk functions within the 

organization and develop clear lines of communication 

between service area risk functions and the risk 

organization in order to enhance risk-management 

practices and ensure comprehensive risk-management 

coverage across FSA’s ecosystem. FSA also will continue to 

build on the risk identification and assessment processes 

completed to date, to quantify and prioritize all risks, and 

to develop systems and processes for regularly monitoring 

and mitigating identified risks.

Objective 6: 

Develop a methodology to measure and track cost 

reductions to increase efficiency and productivity.

FSA established standards for measuring cost reductions in 

FY 2011. Now the standards for measuring cost reductions 

are being communicated across FSA so all employees 

understand the methodology and have the opportunity 

to identify and act on process improvements. Once this 

process becomes fully implemented and practiced in 

FSA, it will result in clear and consistent identification 

and reporting of cost savings, cost avoidance, increased 

collections, and productivity gains. By tracking and 

reporting on these positive financial outcomes, FSA is 

fostering benchmarking and creating the incentive for all 

employees and stakeholders to improve its processes.

Objective 7: 

Build stronger business management capabilities 

and increase operational transparency to improve 

cross-functional coordination.

FSA revitalized the Investment Review Board to provide 

a foundation that ensures FSA has an appropriate project 

management model. Building upon that foundation, FSA 

implemented a project portfolio management discipline 

in FY 2011. This included developing objective business 

drivers to guide consistent decisions on how FSA will 

allocate its project investment budget to maximize benefits. 

In the coming years, the project portfolio management 

discipline will be regularly modified — including ongoing 

review and adjustment of FSA's business drivers — 

based on observations, project delivery data, and project 

stakeholder feedback. 

FSA also implemented a standard methodology of 

project management and oversight that will provide for 

the consistent, effective management and delivery of 

projects. In addition, the improved project reporting at 

the enterprise and individual project level provides FSA’s 

managers greater transparency with large-scale projects. 

To support further advancement in these project 

management disciplines, FSA will establish a crossfunctional panel whose focus will be to track the project 

methodology success, provide training and guidance on its 

use, and refine the framework as FSA’s capabilities grow.

Strategic Goal D: 

Ensure program integrity and 

safeguard taxpayers’ interests.

Because FSA oversees in excess of $134 billion in annually 

disbursed aid and oversees a loan portfolio valued at more 

than $812 billion, safeguarding taxpayer resources requires 

accurate oversight and management. FSA continues to 

innovate and look beyond today’s standards to efficiently 

and effectively manage taxpayer resources and minimize 

program costs across all of its activities. 

Objective 1: 

Improve quality control and reduce errors, waste,

fraud, abuse, and mismanagement in the delivery of 

Title IV aid.

To achieve this goal FSA must ensure that the right amount 

of grants and loans are correctly disbursed. FSA conducts 
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22 | Federal Student Aid

ongoing, extensive system edits, reviews, and analysis to not 

only confirm individuals receive the grants and loans they 

qualify for, but also to build public confidence that FSA is 

properly managing resources and program dollars. Because 

FSA has a wide array of programs, each with unique 

objectives, eligibility requirements, and payment methods, 

it is important to continue to improve quality control. In 

part to help reduce improper payments due to inaccurate 

information, FSA implemented the Internal Revenue 

Service (IRS) data retrieval pilot last year. This pilot enables 

Title IV student aid applicants and parents of dependent 

applicants to transfer certain tax return information 

from an IRS website directly to their “FAFSA on the Web” 

(FOTW) application. FSA will continue to explore ways 

to facilitate detection of errors, based on the results of the 

FAFSA/IRS Data Statistical Study. These enhancements, 

coupled with improved error detection, should allow FSA 

to further reduce improper payments. 

FSA is committed to strengthening program compliance 

and risk assessment activities that affect all institutions 

participating in the Title IV programs, especially those 

identified as needing attention or improvement. For 

example, FSA continuously updates program review 

procedures, including those for online schools, to 

ensure all programs maintain compliance. In addition, 

FSA considers market tools and financial analysis from 

industry experts to better monitor publicly traded 

institutions. These measures will mitigate risks and target 

oversight resources efficiently to support students pursuing 

meaningful degrees and certificates. 

Over the next few years, FSA will develop strategies 

to support compliance initiatives for under-resourced 

institutions and to improve compliance processes at 

all institutions. The country’s economic situation has 

contributed to some of the nation’s most under-resourced 

institutions being at risk of losing their Title IV aid 

eligibility due to lack of financial resources that threatens 

their ability to maintain operations. As part of a White 

House Initiative for HBCUs, FSA is working closely 

with other offices within the Department to establish a 

framework to assess under-resourced institutions and 

provide more proactive support. 

Objective 2:

Manage funds owed to the Department and

provide transparency about student aid portfolio 

risk exposure.

The thorough process implemented to bring not-for-profit 

(NFP) servicers on board to service loans, as well as their 

careful monitoring once they are brought up, will allow 

FSA to better manage funds owed to the Department. 

In addition to this process, FSA established the Risk 

Management Group last year to better identify, understand, 

and mitigate enterprise risks, including risks to the student 

aid portfolio. This group works closely with Department 

offices to share information and data sources, and provides 

systematic reporting and thought leadership to oversight 

entities and policy makers to allow them credible and 

supportable insight when making and modifying policies. 

The Portfolio Performance Management Group, a part of 

the Risk Management Group, will focus on data gathering 

and analysis to better understand and manage FSA’s 

growing student aid portfolio.

Strategic Goal E: 

Strengthen FSA’s performance 

culture and become one of the 

best places to work in the federal

government.

FSA achieved substantial improvement in operational 

performance since its transformation into a PBO. Despite 

achieving a successful transition to Direct Loans, the most 

recent employee survey indicates that FSA employees 

feel strongly about the organization’s mission, but they 

do not feel empowered or encouraged. About 25 percent 

of current FSA employees are eligible for retirement by 

FY 2015, at a time when fewer resources will be available. 

In order to meet the performance challenges facing FSA, 

it is critical for FSA to find innovative ways to ensure that 

its workforce is high-performing and customer-focused. 

Much of this challenge comes at a time when FSA’s human 

capital processes are still being reengineered as a strong 

foundation to support a performance culture. 
23

Strategic Plan FY 2012–16 | 23

The objectives supporting this goal will strengthen and 

support FSA’s most important asset — its workforce. FSA 

has plans to continue to improve its core human capital 

processes, such as hiring, training, performance evaluation, 

and recognition, to ensure that formal mechanisms are in 

place to support an improved performance culture. FSA 

employees have the passion to make FSA a more studentfocused organization that delivers aid to help students 

realize their goals and become productive members of 

society. FSA has assertive plans and innovative program 

designs it believes can make a difference in how employees 

perceive and engage their work. However, in a time of 

decreasing resources and increasing unfunded mandates, 

major challenges remain about how best to leverage 

innovation to continue with high results. FSA must find 

ways to fund key human capital support areas, such as 

management best practices, employee core skills training, 

and promising employee programs, like FSA First Class, the 

principal vehicle that FSA uses to engage its employees in 

meaningful programming and dialogue about improving 

both FSA culture and the overall employee experience. 

Critical investments will be needed to support the human 

capital infrastructure to send a clear and intentional 

message that employees are an integral component of the 

FSA financial aid delivery ecosystem.

Objective 1:

Improve the integrity of core human capital 

processes to attract, develop, and retain talented 

FSA employees from diverse backgrounds; help 

them achieve their full performance potential and 

recognize their contribution to FSA’s mission.

During FY 2011, FSA increased its on-board staff to more 

than 1,240 employees. Additional staff were needed for 

project and risk managers, members of the acquisition 

team, and IT specialists. Many of these employees were 

hired with professional certification requirements that 

call for an investment in training to keep their skills 

current. Other staff must be kept abreast of new program 

requirements. The percentage of the workforce eligible 

to retire will reach 25 percent, and the percentage of FSA 

managers eligible to retire will reach 23 percent, both by 

FY 2015. Given funding shortages, staffing levels may 

remain flat in the near future.

During FY 2012 and beyond, FSA will continue to 

implement strategic hiring system improvements, 

and strengthen overall integrity of the human capital 

programs and systems. FSA will use or build partnerships 

with the Department’s Office of Management and 

other organizations offering professional development 

opportunities, especially for its supervisors, aspiring 

supervisors, and its acquisition, financial management, 

and technology workforce. FSA will continue to work with 

the Department on implementing its recently redesigned 

performance evaluation system, REsults ACHieved 

(REACH), and to encourage FSA managers to provide 

ongoing, productive feedback to employees on their job 

performance and development. FSA will also build on 

the new FY 2011 non-monetary awards program for 

managers, “Beyond the Call,” and will expand the array 

of opportunities to encourage engagement and recognize 

excellent employee performance. 

Objective 2:

Further develop a student-centric culture among all 

managers and employees that will fully deliver on

FSA’s mission, vision, and strategy.

According to the employee survey, FSA employees remain 

intensely dedicated to serving students and uphold a 

sharp focus on monitoring and adapting to external 

changes. However, in addition to increasing the focus 

on students, the survey results highlight other areas for 

improvement that will affect this result, including the need 

to improve trust in senior leadership and accountability. 

FSA employees have indicated a desire to move away 

from bureaucracy and silos and toward a more open 

environment characterized by trust and empowerment. 

FSA needs to unlock the full potential of its staff to deliver 

truly superior service to students. During the coming years, 

FSA will continue to experiment with social and other types 

of media to engage employees and keep the satisfaction 

of customers, students, and borrowers as a driver to 

everything they do. 
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24 | Federal Student Aid

F

SA’s strategic goals, objectives and initiatives will 

significantly improve the organization’s future 

performance and achievement of its mission. FSA 

will measure the success of its strategic goals against the 

following performance measures. 

For strategic goal A, provide superior service and 

information to students and borrowers, the success 

outcome would be an increased percentage of potential 

students applying for federal student aid for an award year 

and their satisfaction with FSA’s services. For the 

application, FSA will look at groups by segments: 

(1) traditional high school senior students (number of 

first-time filers who are age 18 or younger, divided by the 

total number of high school graduates from the most 

recent high school academic year reported by the National 

Center for Education Statistics); (2) students ages 19–24 

(number of first-time filers who are ages 19–24 and have 

not attended college, divided by the number of 19- to 

24-year-olds who have completed high school and have 

not attended college as of the fall of the prior year 

reported by the most recent School Enrollment 

Supplement, Current Population Survey); and (3) 

nontraditional students (number of first-time filers who 

are age 25 or older and have not attended any college, 

divided by the number of people in the workforce age 25 

and older and have not attended college as of the most 

current Bureau of Labor Statistics Workforce data). In 

addition, given the increased focus on most-needy and 

least-served students, FSA will measure completion of 

FAFSA applications for low-income students (number of 

first-time filers who are age 18 or younger and who are 

from households with incomes that are 150 percent or less 

of the poverty level, divided by the number of high school 

graduates from households with incomes that are 

150 percent or less of the poverty level as reported by the 

most recent School Enrollment Supplement, Current 

Population Survey). For all metrics, except first-time filers 

who are age 25 or older, FSA aims to maintain or improve 

every year. The number of first-time filers ages 25+ 

actually declined in the 2010–11 cycle from the prior 

cycle (2009–10) by approximately 4 percent. Applications 

during the prior cycle may have peaked as the 

unemployment rate rose sharply. Consequently, FSA does 

not expect the FY 2011 result to be sustainable and has 

lowered the target for FY 2012. 

To measure overall customer satisfaction level throughout 

the student aid lifecycle, FSA also will calculate a weighted 

score for the American Customer Satisfaction Index 

(ACSI) surveys for (1) applicants, measured by the average 

responses received from January through September each 

year; (2) students in school, measured in July each year; 

and (3) borrowers in repayment, measured by the average 

responses received quarterly, July through June each year. 

This metric will measure how FSA is improving in terms 

of streamlined processes for customer interaction and the 

accessibility of information FSA provides to its customers 

4. Performance Goals 
25

Strategic Plan FY 2012–16 | 25

on its websites and in other materials. FSA’s goal is to 

continue to improve the aggregate ACSI score by FY 2015. 

For strategic goal B, work to ensure that all participants in 

the system of funding postsecondary education serve the 

interests of students, from policy to delivery, FSA conducts 

a survey with postsecondary institutions and partners 

every quarter to gauge the “ease of doing business with 

FSA.” FSA aims to maintain or improve the score year after 

year (July through June timeframe). FSA also will measure 

the delinquency rate of borrowers (average number of 

borrowers who are 91–270 days delinquent in the year 

ending June 30 each year, divided by average number of 

borrowers in repayment for the year). FSA aims to maintain 

or improve the delinquency rate for the next five years.

For strategic goal C, develop efficient processes and 

effective capabilities that are among the best in the public 

and private sectors, FSA will measure two unit costs: (1) 

the cost for delivering aid per applicant (total direct cost to 

process FAFSAs and originate aid in the year ending June 

30, divided by the number of original FAFSAs processed 

in the year); FSA expects the cost for aid delivery to 

increase due to increased operation and maintenance 

costs as a result of FAFSA simplification efforts and 

increased tiered pricing for originations; and (2) cost for 

servicing borrowers (total direct costs for servicing in the 

year ending June 30, divided by the average number of 

borrowers in servicing for the year). FSA expects the cost 

for servicing borrowers to increase as a result of the transfer 

out of low marginal cost accounts from the Common 

Services for Borrowers (CSB) servicer to the new NFP loan 

servicers and the maturation of the loan portfolio (i.e., 

more accounts in repayment status vs. in-school status). 

Both of these factors result in higher-priced structures 

because of differences in the negotiated average contractual 

unit costs that are based on different borrower statuses 

(e.g., in-school, in-grace\current repayment, deferment\

forbearance, and delinquency). 

For strategic goal D, ensure program integrity and 

safeguard taxpayers’ interest, FSA will look at its 

performance on managing three measures: 

(1) improper payments that occur when funds go to 

the wrong recipient, the recipient receives the incorrect 

amount of funds, documentation is not available to support 

a payment, or the recipient uses funds in an improper 

manner; FSA will use the same methodology and targets 

for the strategic plan that FSA is developing for OMB; 

(2) default rate, defined as the average balance of loans 

that are 270 days or more past due serviced by FSA and its 

debt collection service in the year ending June 30 each year, 

divided by the average balance of loans serviced by FSA 

during the year (excluding loans that are in the in-school/

in-grace loan status). FSA will aim to maintain or improve 

the rates for the next five years; and 

(3) collection rate, defined as the total amount of principal 

collected on both current and defaulted debt in the year 

ending June 30 each year, divided by the average amount 

of collectible principal outstanding for the year, excluding 

principal owed by borrowers who are in the in-school/

in-grace statuses. This metric measures FSA’s success 

in collecting on its outstanding portfolio of roughly 

$443 billion in Direct Loans, government-held FFEL and 

Perkins loans, and unassigned FFEL defaulted loans. In 

establishing a baseline and targets for future years, FSA 

will need to assess the impact of economic fluctuations; 

changes in the nature of the government-held portfolio 

under 100 percent Direct Loans; and trends in the use 

by borrowers of options such as income-based or other 

flexible repayment plans, deferments, and forbearances, 

all of which can reduce or delay repayment amounts. Over 

the next year, FSA will analyze these issues and develop 

appropriate targets for this metric.

For strategic goal E, strengthen FSA’s performance culture 

and become one of the best places to work in the federal 

government, FSA will use an FSA Morale Index, which 

was developed from a subset of questions from the annual 

Government-wide View Point Survey (percent of positive 

responses to survey available September each year). FSA 

expects the Index to improve or remain constant during the 

next five years. 

The year-by-year performance metrics and measures are 

presented below (Exhibit 12). This performance construct 

will allow FSA stakeholders to monitor progress against 

each objective and strategic goal, and allow FSA to report 

the same in its annual performance report.
Counselors and Mentors Handbook

26 | Federal Student Aid

EXHIBIT 12: FSA’s year-by-year performance goals: FY 2012–16

*The number of first-time filers ages 25+ actually declined in the 2010–11 cycle from the prior cycle (2009–10) by about 4%. Applications during the prior 

cycle may have peaked as the unemployment rate rose sharply. Consequently, we do not expect the FY 2011 result to be sustainable and have lowered the 

target for FY 2012.

GOALS

Performance Metric FY 2011

baseline

FY 2012

targets

FY 2013

targets

FY 2014

targets

FY 2015

targets

FY 2016

targets

A1 % of first-time FAFSA filers among HS seniors 52.0% >=52% ——————— No lower than previous year ————————

A2 % of first-time FAFSA filers aged 19–24 among

those in population that are HS graduates, no college 27% >=27% ——————— No lower than previous year ————————

A3 % of first-time FAFSA filers among workforce 

aged 25+, HS graduates, no college* 3.8% >=3.6% ——————— No lower than previous year ————————

A4 % of first-time FAFSA filers among low-income students 57% >=57% ——————— No lower than previous year ————————

A5 Customer Satisfaction Score (ACSI) 78 78 78 78 79 79

B1	 Ease of Doing Business School Survey (1–100 Scale) 72 >=72 ——————— No lower than previous year ————————

B2	 Percent of Borrowers > 90 Days Delinquent 9.9% <=10% ——–———— No higher than previous year ——––—————

C1 Aid Delivery Costs per Application $9.89 $10.90

—————— Expect increases due to operating and ————— 

maintenance costs as a result of FAFSA simplification 

and higher tiered pricing for originations

C2	 Loan Servicing Costs per Borrower $18.15 $19.64

––———— Expect increases as portfolio matures and ———––—

NFPs come on line. FSA will provide additional targeting 

information in the next plan update 

D1 Improper Payment Rate N/A Set baseline TBD TBD TBD TBD

D2 Direct Loan Default Rate 11.3% <=11.3% –––—————— No higher than previous year ———————

D3 Collection Rate N/A Set baseline TBD TBD TBD TBD

E1 FSA Morale Index (Subset of Questions from 

Government-wide View Point Survey) – % of 

positive responses to survey (does not include 

neutral responses) 58% 58%

——————— No lower than previous year ————————
27

Strategic Plan FY 2012–16 | 27

5. Internal Capabilities

T

his year, FSA identified the top six internal 

capabilities needed to achieve the goals and objectives 

identified in the Strategic Plan. In order to foster a 

high-performance organization, FSA will focus on the 

development of these capabilities through a strategic 

human resources approach that also aspires to create a 

supportive organizational environment.

CAPABILITY DESCRIPTION

•	The ability to successfully and efficiently develop applications that

support FSA's business, and to provide a reliable, modern and secure 

IT infrastructure.

•	The ability to determine when and where to acquire external services,

identify business needs, solicit and negotiate the contract, and manage 

the relationship with and performance of vendors.

•	The ability to identify, measure, monitor, and mitigate potential risks

across the major risk types (e.g., operational, strategic, and student aid 

portfolio), and integrate them into day-to-day operations.

•	The ability to recruit, develop, motivate, retain and reward highestquality staff in a timely, responsive, and efficient manner.

•	The ability to successfully collect, analyze, and use customer data

to inform decision-making to improve customer-related outcomes 

across FSA.

•	The ability to set strategic direction, and to facilitate and track the

transformation process towards elected strategic objectives.

A. Technology

B. Acquisition &

 vendor management

C. Risk management

D. Human capital

E. Customer insights

F. Strategic innovation
Counselors and Mentors Handbook

28 | Federal Student Aid

6. Relationship to the 

Department of Education’s 

Strategic Plan

F

SA's goals are drawn from the Department’s overall 

strategic goals and direction. More specifically, 

FSA is currently a part of both Goal 1 — 

Postsecondary Education, Career-Technical Education, 

and Adult Education, and Goal 6 — U. S. Department 

of Education Capacity, of the draft Department of 

Education’s Strategic Plan: FY 2011–14. Goal 1 relates 

to increasing college access, completion, and quality 

by strengthening postsecondary education and lifelong 

learning opportunities, and Goal 6 relates to improving the 

organizational capacities of the Department to implement 

the Strategic Plan. During each cycle of the FSA’s annual 

performance plan, FSA will update specific initiatives 

and measures that support the goals established in the 

Department of Education’s Strategic Plan.
29

Strategic Plan FY 2012–16 | 29

7. External Risk Factors 

and Potential 

Challenges

T

he following are key factors, external to FSA, which 

may affect achievement of FSA’s goals and undermine 

its progress in implementing its strategy. FSA must 

monitor and respond to:

Budget constraints

FSA creates its Congressional Justification based on meeting 

the needs of processing aid applications, originating and 

disbursing financial aid, servicing student loans, and 

fulfilling additional initiatives. Any reduction from the 

requested level in the Congressional Justification requires 

FSA to prioritize activities to first meet core operations. 

This prioritization may result in suspending certain 

initiatives until funds become available in the future.

Personally identifiable information

FSA and its partners handle personally identifiable 

information (PII), such as Social Security numbers and tax 

income information of family members. The challenge is 

to protect PII while increasing accessibility to appropriate 

information. While FSA is working diligently to upgrade its 

IT security, there is a continuous threat of exposure of PII 

to unintended audiences. 

Continued economic uncertainty

Funding for postsecondary education is being cut across 

the country, making access to postsecondary education 

potentially more difficult for many, and increasing the 

importance of the awareness and availability of federal 

funding. In addition, the effects of the economy can alter 

FSA’s operating and program costs. 

Increased need for transparency

As detailed in the Open Government Directive issued by the 

Director of the Office of Management and Budget (OMB) in 

December 2009, transparency is a cornerstone of an open 

government. This administration is committed to making 

federal expenditures of taxpayer dollars transparent to the 

public by providing readily accessible, complete, accurate, 

and usable federal spending data. Such tracking and 

analysis allow both the public and public officials to gauge 

the effectiveness of expenditures and to modify spending 

patterns as necessary to achieve the best possible results. 

Natural disasters and catastrophic events

A catastrophic environmental event, such as a hurricane, 

could change FSA’s responsibilities. In the past, FSA has 

responded to such events and addressed the specific need 

for additional aid to those students facing crisis. Similar 

unforeseen events could have an unanticipated impact on 

FSA’s operations. 
Counselors and Mentors Handbook

30 | Federal Student Aid

8. Evaluating Progress

F

SA uses a variety of methods and tools to evaluate 

its progress. FSA continues to build and improve 

on the collection of data, research, and analysis 

to inform management decisions. Information from 

across the organization is used to improve the day-to-day 

administration of our business. The following chart lists 

some of the significant evaluations, a description of these 

evaluations, and the timeframe for completion (Exhibit 13).

EXHIBIT 13: Performance evaluation tools

EVALUATION DESCRIPTION COMPLETED

Organization Performance 

Review

Provides an assessment of organizational 

performance across major initiatives, human 

capital, acquisition management, etc.

Quarterly

Monthly

Annually

Annually

Provides a monthly assessment of the 

organization's priority investments.

Provides a comprehensive assessment of 

employee satisfaction and commitment across 

federal agencies.

Reports on the performance of the PBO, including 

an evaluation of the extent to which the PBO met

the goals and objectives contained in the five-year 

performance plan for the preceding year. It also 

includes FSA's financial statements which are

prepared in accordance with established federal

accounting standards and are subject to an 

annual independent audit.

FSA Enterprise Dashboard

Best Places to Work

Annual Report to Congress
31

Strategic Plan FY 2012–16 | 31

9. Moving Forward

T

his five-year strategic plan is designed to help 

FSA achieve its mission to assist students through 

postsecondary education and be a provider of the 

most trusted and reliable postsecondary financial aid 

information and services in the nation. FSA will use this 

plan as the foundation for discussion and decision-making 

at every level of the organization. In addition, FSA will align 

its resources to achieve the defined goals and priorities over 

the next five years.