Department of Education

STUDENT AID ADMINISTRATION

Fiscal Year 2016 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................ Z-1

Analysis of Language Provisions and Changes....................................................................... Z-2

Amounts Available for Obligation ............................................................................................ Z-3

Obligations by Object Classification ........................................................................................ Z-4

Summary of Changes ............................................................................................................. Z-5

Authorizing Legislation............................................................................................................ Z-7

Appropriations History............................................................................................................. Z-8

Significant Items in FY 2015 Appropriations Reports............................................................... Z-9

Summary of Request ............................................................................................................ Z-12

Activity:

Student Aid Administration............................................................................................. Z-13

Organizational Chart ............................................................................................................. Z-44
STUDENT AID ADMINISTRATION

Appropriations Language

For Federal administrative expenses to carry out part D of title I, and subparts 1, 3, [9,

and 10] and 9 1 of part A, and parts B, C, D, and E of title IV of the HEA, and subpart 1 of part A 

of title VII of the Public Health Service Act, [$1,396,924,000] $1,581,854,000, to remain 

available until September 30, [2016] 2017 2. (Department of Education Appropriations Act, 

2015.)

NOTE

Each language provision that is followed by a footnote reference is explained in the Analysis of Language 

Provisions and Changes document which follows the appropriation language.

Z-1
STUDENT AID ADMINISTRATION

Analysis of Language Provisions and Changes

Language Provision Explanation

1 ... and subparts 1, 3, [9, and 10] and 9 The 2016 Budget proposes to move the Iraq 

and Afghanistan Service Grants program to 

the Pell Grant program.

2 ... to remain available until September 30, 

[2016] 2017.

This language provides for appropriated funds 

to remain available for 2 years.

Z-2
STUDENT AID ADMINISTRATION

Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2014 2015 2016

Discretionary appropriation:

Appropriation............................................................ $1,166,000 $1,396,924 $1,581,854

Transfer from Department of Health and Human Mandatory Discretionar y 

appropriation Services for Health Education Assistance Loan Discretionar y appropriati on

Discretionar y appropoProgram................................................................. 996 ____ 0 0

Discretionar y appropriati on Subtotal, adjusted discretionary appropriation 1,166,996 1,396,924 1,581,854

Mandatory appropriation: Mandator y appropriate

on Not-For-Profit Servicing1 ........................................... 226,891 _____0 0

Subtotal, discretionary and mandatory 

appropriation ................................................. 1,393,887 1,396,924 1,581,854

Unobligated balance, start of year................................ 54,642 57,227 0

Recovery of prior-year obligations................................ 10,772 0 0

Unobligated balance expiring....................................... -1,150 0 0

Unobligated balance, end of year................................. _ -57,227 0 0

Total, direct obligations............................ 1,400,924 1,454,151 1,581,854

1 The Bipartisan Budget Act of 2013 eliminated mandatory funding for NFP servicing costs, instead requiring all 

servicing costs from date of enactment on to be funded by discretionary budget authority. 

Z-3

 
STUDENT AID ADMINISTRATION

Obligations by Object Classification

(dollars in thousands)

Object Class 2014 2015 2016

Personnel Compensation and Benefits: PC&B

PC&B Full-time permanent............................................... $137,612 $145,826 $148,227

PC&B Full-time temporary................................................ 274 0 0

PC&B Part-time................................................................ 701 0 0

PC&B Consultants............................................................ 37 0 0

PC&B Overtime................................................................ 50 105 105

PC&B Awards................................................................... 1,795 1,725 1,651

PC&B Other Compensation.............................................. 25 0 0

PC&B Benefits.................................................................. 40,406 44,922 46,500

Subtotal........................................................ 180,900 192,578 196,483

Travel ...................................................................... 2,047 2,795 2,795

Rental payments to GSA and others ....................... 19,065 18,534 18,534

Communications, utilities, and miscellaneous 

charges ................................................................. 442 0 0

Postage and fees............................................. 669 55 52

Printing and reproduction......................................... 1,318 1,513 1,510

Contractual services and supplies: CS&S

CS&S Advisory and assistance services .......................... 5,116 3,161 2,901

CS&S Other services........................................................ 815,641 741,779 932,891

CS&S Training and tuition ................................................ 1,285 2,449 2,483

CS&S Purchases of goods and services .......................... 22,276 17,261 19,824

CS&S Operations and maintenance of facilities................ 384 235 245

CS&S Operations and maintenance of equipment............ 0 30 30

CS&S Information technology services and contracts....... 351,115 473,083 403,642

Subtotal........................................................ 1,195,817 1,237,998 1,362,016

Supplies and materials............................................. 207 301 300

Equipment ............................................................... 178 147 154

Building Alterations.................................................. 261 230 10

Prompt Pay Interest.......................................... _______20 ________0 ________0

Total, obligations 1,400,924 1,454,151 1,581,854

Z-4
STUDENT AID ADMINISTRATION

Summary of Changes

(dollars in thousands)

 

2015.............................................................................................. $1,396,924

2016.............................................................................................. 1,581,854

Net change ............................................................ +184,930

Increases: 2015 base

Change 

from base

Built-in: Built

Increase in salaries and benefits primarily for a proposed 

1.3 percent Governmentwide pay raise, one additional 

paid day, and increased FERS contribution rates.

 

$189,981 +$4,206

Program:

Increase in loan servicing activities due to increased 

volume and renegotiated pricing for loan servicing 

contracts.

 

681,179

 

+174,032

Increase in other services due to maintenance of student 

aid processing, origination, disbursement, and IT system 

hosting; implementation of Gainful Employment 

regulations; and recompete efforts for FEBI and VDC. 132,704 +19,276

Increase in funding for goods and services from the 

Government for security authorizations and building 

security. 17,261 +2,563

Increase in training. 2,449 +34

 Increase in maintenance of facilities. 235 +10

Increase in information technology equipment. 147 +7

Subtotal, increases +200,128

Z-5
STUDENT AID ADMINISTRATION

Summary of Changes—Continued

(dollars in thousands)

____________________________________________________________________________

Decreases: 2015 base

Change from 

base

Program: Pr

Decrease in information technology due to completion of 

recompete efforts of COD and FEBI school products and 

full implementation of Integrated Partner Management. $343,922 -$14,402

Decrease in funding for advisory and assistance 

services for fulfillment of procurement and acquisition 

requirements. 2,921 -268

Decrease in transit subsidies. 872 -227

Decrease in building alterations. 230 -220

Decrease in awards. 1,725 -74

Decrease in supplies and postage. 356 -4

Decrease in printing. 1,513 -3

 Subtotal, decreases -15,198

Net change +184,930

 

Z-6
STUDENT AID ADMINISTRATION

Authorizing Legislation

(dollars in thousands)

Activity

2015

Authorized

2015

Estimate

2016

Authorized

2016

Request

Student aid administration (Higher 

Education Act of 1965, I-D and IV-D, 

section 458; Public Health Service Act, 

VII-A) Indefinite $1,396,924 To be determined1 $1,581,854

Total definite authorization 0 0

Total appropriation 1,396,924 1,581,854

1 The GEPA extension expires September 30, 2015; reauthorizing legislation is sought for FY 2016.

Z-7
STUDENT AID ADMINISTRATION

Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress 

House 

Allowance Footnote

Senate 

Allowance Footnote Appropriation Footnote

2007 $733,720 N/A1 N/A1 $719,9141

Rescission (P.L. 110-28) 0 0 0 -500

Transfer (P.L. 110-05) 0 0 0 -1,464

2008 708,216 $708,216 $708,216 695,843

2009 764,000 714,0002 704,8432 753,402

Recovery Act Supplemental

 (P.L. 111-5) (non-add) (0) (50,000) (0) (60,000)

2010 870,402 870,402 870,4023 870,402

Rescission (P.L. 111-226) 0 0 0 -82,000

2011 1,170,231 994,6004 1,048,0783 992,0125

2012 1,095,418 992,0126 1,045,3636 1,043,387

2013 1,126,363 1,043,3877 1,126,3637 978,9248

2014

 

1,050,091

 

9

 

N/A10

 

1,044,301

 

3 

 

1,166,000

 

11

2015 1,446,924 N/A10 1,446,924 12 1,396,924

2016 1,581,854

1

 This account operated under a full-year continuing resolution (P.L. 110-5). House and Senate Allowance 

amounts are shown as N/A (Not Available) because neither body passed a separate appropriations bill.

2

 The levels for the House and Senate allowances reflect action on the regular annual 2009 appropriations bill, 

which proceeded in the 110th Congress only through the House Subcommittee and the Senate Committee.

3

 The levels for the Senate allowance reflect Committee action only. 

4

 The levels for the House allowance reflect the House-passed full-year continuing resolution. 

5

 The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations Act, 2011 

(P.L. 112-10). 

6

 The level for the House allowance reflects an introduced bill; the level for the Senate allowance reflects Senate 

Committee action only.

7

 The levels for the House and Senate allowance reflect action on the regular annual 2013 appropriation bill, which 

proceeded in the 112th Congress only through the House Subcommittee and the Senate Committee. 8

 Total transfer $9,888 thousand to Program Administration, Office of Civil Rights and Office of Inspector General. 9 Excludes $2,807 thousand proposed for transfer from Department of Health and Human Services to Department 

of Education for the Health Education Assistance Loan program. 10 The House allowance is shown as N/A because there was no Subcommittee action. 11 Excludes $996 thousand transferred from Department of Health and Human Services to Department of 

Education for the Health Education Assistance Loan program. 12 The level for the Senate allowance reflects Senate Subcommittee action only.

Z-8
STUDENT AID ADMINISTRATION

Significant Items in FY 2015 Appropriations Reports

SAA Obligation Plan for Mandatory and Discretionary Funds

Manager’s The Committee directs the Department to continue to provide

Statement quarterly reports detailing its obligation plan by quarter for student aid

and Senate: administrative activities broken out by servicer and activity.

Response: The Department will continue to provide the requested quarterly reports as 

directed by the Committees on Appropriations of the House of Representatives 

and the Senate.

Streamlined Metrics and Pricing Across Loan Servicers

Senate: The Committee directs the Secretary to implement consistent metrics and pricing 

to ensure a fair evaluation across all servicers and provide an opportunity for the 

TIVAS and NFP servicers to provide feedback on the modifications before 

contract modifications are made.

Response: In the summer of 2014, the Department announced changes that will implement 

a single set of performance metrics and incentive-based pricing for the Title IV 

Additional Servicer (TIVAS) and NFP servicers. The Department believes these 

changes will better ensure consistency and accountability for all Federal student 

loan servicers and create additional incentives to focus on the Department's goal 

of providing high-quality servicing to borrowers. The revised contract terms were 

set for the TIVAS on September 1, 2014, and for the NFP servicers beginning on 

October 1, 2014.

Recompetition of Servicing Contracts

Manager’s The Committee directs the Secretary to hold a full and open

Statement competition consistent with legal procurement requirements that allows eligible

and Senate: NFP servicers to compete for servicing contracts, including those NFP servicers 

that were affected by the mandatory sequester.

Response: In December 2014, the Department issued a Request for Information as the first 

step in preparing for a new full and open competition to solicit proposals to 

service Federal student loans. The Department will review submissions and

other information and its experience with all current servicing vendors in the 

procurement process, which the Department expects to complete in 2016. A 

discussion of the servicing recompete efforts begins on page Z-19.

College Ratings System

Senate: The Committee urges the Secretary to consider carefully the metrics used to 

determine the rankings system, given the complexity in accurately measuring the 

value offered by colleges and universities and expects the Secretary to propose 

Z-9
STUDENT AID ADMINISTRATION

a system that reflects the full range of successful post-graduation outcomes, 

including employment and participation in public service.

Response: On December 19, 2014, the Department published a framework and questions 

for public review and comment that summarizes the basic rating categories, 

institutional groupings, data, metrics, and tools it is currently weighing in 

designing the system. The draft framework was based on extensive consultation 

with stakeholders and experts. Throughout these conversations, the Department 

has been urged by the field to move forward carefully and to share the evolving 

approach to the ratings methodology widely. The Department seeks public 

feedback on the proposed approach and potential metrics before analyzing 

actual data and generating specific institutional ratings for release by the 

2015–2016 school year.

Oversight of Proprietary Institutions of Higher Education

Manager’s The agreement requests an update on the progress of the interagency 

Statement: task force to ensure oversight of for-profit institutions of higher education in the 

fiscal year 2016 congressional justification.

Senate: The Committee directs the Secretary to encourage greater coordination and 

information sharing among Federal and State agencies involved in oversight of

proprietary institutions of higher education and recommends the Department lead 

a working group of relevant Federal agencies to coordinate closely with State 

Attorneys General, consumer advocates, veterans’ service organizations, and 

other stakeholders.

Response: The Department has begun the work necessary to form an interagency task force 

to help ensure proper oversight of for-profit institutions of higher education. 

Building on existing efforts with the Departments of Justice, Treasury and 

Veterans Affairs, as well as the Consumer Financial Protection Bureau, Federal 

Trade Commission, and the Securities and Exchange Commission, the 

Department has identified its senior leaders and staff who will lead the effort. In 

addition, the Department and the other task force members will draft a charter 

and formalize a structure to protect students from unfair, deceptive, and abusive 

policies and practices. The task force will begin meeting in 2015. State 

attorneys general will also be invited to collaborate with the task force. The task 

force will coordinate the Federal Government’s efforts to protect the interests of 

students and taxpayers.

Z-10
STUDENT AID ADMINISTRATION

Sexual Campus Violence Prevention

Manager’s Within the funding appropriated for Student Aid Administration,

Statement the Committee expects the Department to continue its efforts to prevent sexual

And Senate: violence on campus.

Response: The Department is committed to preventing sexual violence on campus. The 

2016 Budget also requests additional FTE for the Office of Civil Rights, refer to 

the Office of Civil Rights in the 2016 Budget, which has worked on this issue

extensively to enhance the Department’s response.

Student Complaint System

Manager’s The agreement requests that in fiscal year 2016 congressional budget

Statement: justification includes an update on the Department’s implementation of the 

expanded student complaint system detailed in Senate Report 113-71. 

Senate: The Committee directed the Department to broaden the scope of the complaint 

system to make it more accessible to all students attending institutions of higher 

education, regardless of their receipt of Federal education benefits. The 

Committee also directed the Department to post information on its main Web site 

about the complaint system no later than 6 months after enactment of the act. 

The Committee requests that the fiscal year 2016 CJ include an update on the 

Department’s implementation of the expanded complaint system.

Response: In January 2015 the Department began developing high level requirements and 

analysis of alternatives for a student complaint system. The Department will 

provide additional details on this process in spring 2015. 

Z-11
DEPARTMENT OF EDUCATION FISCAL YEAR 2016 PRESIDENT'S BUDGET 

Click here for accessible version 

(in thousands of dollars) 2016

Category 2014 2015 President's 

Account, Program and Activity Code Appropriation Appropriation Budget Amount Percent

Student Aid Administration (HEA I-D and IV-D, section 458)

 1. Salaries and expenses D 663,251 675,224 726,643 51,419 7.615%

 2. Servicing activities 1 D 502,749 721,700 855,211 133,511 18.500%

Subtotal 1,166,000 1,396,924 1,581,854 184,930 13.238%

 3. Health education assistance loan program (non-add) 2 D 1,000 0 0 0 ---

 4. Not-for-profit servicers M 226,891 0 0 0 ---

Total 1,392,891 1,396,924 1,581,854 184,930 13.238%

Discretionary D 1,166,000 1,396,924 1,581,854 184,930 13.238%

Mandatory M 226,891 0 0 0 ---

NOTES: D = discretionary program; M = mandatory program; FY = fiscal year 

Accounts are shown under the administering office that has primary responsibility for most programs in that account; however, there may be some programs that are administered by another office.

For mandatory programs, the levels shown in the 2014 Appropriation column reflect the 7.2 percent sequester that went into effect October 1, 2013, and the levels shown in the 2015 Appropriation column

reflect the 7.3 percent sequester that went into effect October 1, 2014, pursuant to the Budget Control Act of 2011 (P.L. 112-25).

Detail may not add to totals due to rounding. 

1 The Managers Statement accompanying Public Law 113-235 includes $721,700 thousand for Servicing Activities.

2 The Student Aid Administration total excludes a budget authority transfer in FY 2014 of $1,000 thousand for the Health Education Assistance Loan (HEAL) program, the program administration authority for which was 

transferred from the Department of Health and Human Services to the Department of Education, per the Department of Education Appropriations Act, 2014. 

2016 President's Budget 

Compared to 2015 Appropriation

Summary of Request

Z-12

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STUDENT AID ADMINISTRATION

Activit y

Student Aid Administration

(Higher Education Act of 1965, I-D and IV-D, section 458; Public Health Service Act, VII-A)

(dollars in thousands)

FY 2016 Authorization: To be determined 1

Budget Authority

Activity 2015

Estimate 

F

o

ot

n

ot

e

2016

RequestFootnote20Change

Salaries and Expenses: 0 0 0

Sal aries and Expenses Personnel costs $192,578 $196,483 +$3,905

Sal aries and Expenses Non-personnel costs,

excluding loan servicing costs 523,167 530,160 +6,993

Subtotal, salaries and expenses 715,745 726,643 +10,898

Loan servicing costs 681,1792 855,211 3 +174,032

Total, student aid administration 1,396,924 1,581,854 +184,930

FTE employees 1,350 1,350 0

_________________

1 The GEPA extension expires September 30, 2015; reauthorizing legislation is sought for FY 2016.

2

 Includes servicing costs of $592,621 thousand for loan servicer contracts, $71,297 thousand for Debt 

Management Collection System (DMCS) servicing costs, $1,516 thousand for Department-held Perkins Loans 

servicing, $4,600 thousand for Department-held Perkins Loans close-out costs, $8,700 thousand for loan servicer 

development costs, $1,638 thousand for a customer satisfaction survey required for loan servicer volume allocation, 

and $807 thousand for Health Education Assistance Loan (HEAL) servicing,

3

 Includes $768,942 thousand for loan servicer contracts, $73,880 thousand for DMCS servicing costs, 

$9,100 thousand for loan servicer development costs, $2,021 thousand for Department-held Perkins Loans servicing, 

$848 thousand for a customer satisfaction survey required for loan servicer volume allocation and $420 thousand for 

Health Education Assistance Loan (HEAL) program administration costs

Z-13
STUDENT AID ADMINISTRATION

PROGRAM DESCRIPTION

Student Aid Administration provides funds to administer the Federal student financial assistance 

programs authorized under Title IV of the Higher Education Act (HEA) of 1965, as amended. 

The Title IV programs, which provide funds to help students and families pay for the cost of 

postsecondary education, are the Nation’s largest source of financial aid for postsecondary 

students. The account provides funding to administer the student aid lifecycle, including: 

educating students and families about the process for obtaining Federal aid and repaying 

student loans; processing approximately 20 million student financial aid applications; annually 

disbursing $148 billion in aid; administering a loan portfolio of over $1.1 trillion; and ensuring 

that Federal resources are appropriately used by schools, guaranty agencies and students.

The Higher Education Amendments of 1998 established the Federal Student Aid (FSA) as the 

Federal Government’s first performance-based organization (PBO) to improve service for

students, parents, schools, and other program participants; to reduce student aid administration 

costs; to increase the accountability of the officials responsible for administering program 

operations; and to integrate the student aid processing and delivery systems. 

The Offices of Postsecondary Education (OPE), the Under Secretary (OUS) and FSA oversee 

and administer the Federal student financial assistance programs. OPE formulates policy for 

these student financial assistance programs and administers other Federal postsecondary 

education programs. In addition, other Department offices—Offices of Management, Planning, 

Evaluation and Policy Development, the General Counsel, the Chief Information Officer, the 

Inspector General, and the Chief Financial Officer—contribute to the administration and 

oversight of the student aid programs.

The Federal Pell Grant Program is the foundation for Federal financial grant assistance. The 

program ensures financial access to postsecondary education by disbursing $31 billion to 

8.2 million low-and middle-income undergraduate students during the 2014–2015 award year, 

with an average award of $3,793. The maximum Pell Grant award has grown from $5,350 for 

the 2009–2010 award year to $5,775 for the 2015–2016 award year and is projected to be 

$5,915 for the 2016-2017 award year. 

The William D. Ford Federal Direct Loan (DL) Program drives a significant portion of FSA’s 

workload. The DL program lends funds directly to students and their families through 

participating schools. The DL program is funded through borrowing from the U.S. Treasury and

an appropriation for subsidy costs. In fiscal year 2016, the Department will make $109 billion in 

new Direct Loans, excluding Consolidation Loans. The Federal Family Education Loan (FFEL)

Program was similar to the DL Program except private lenders provided those funds, which 

were insured by loan guaranty agencies and then reinsured by the Government. See the 

Student Loans Overview and Student Aid Overview for details on Student Loan programs in 

the 2016 Budget. 

As a result of uncertainty in the financial markets in 2008, the Ensuring Continued Access to 

Student Loans Act (ECASLA), P.L. 110-227, provided access to capital to private lenders for 

making Federal student loans. Under the ECASLA authority, the Department implemented

four programs to ensure students and families had access to FFEL loans through the 

Z-14
STUDENT AID ADMINISTRATION

2009–2010 award year. More information about these programs is available online at: 

(http://Federalstudentaid.ed.gov/ffelp). 

SAFRA (Student Aid and Fiscal Responsibility Act), Title II, Part A of the Health Care Education 

Reconciliation Act, 2010, ended the FFEL program’s authority to originate new Federal student 

loans. Since July 1, 2010, the Department has originated and serviced all new Federal student 

loans through the DL program, FSA continues to administer the FFEL program, while lenders 

and guaranty agencies continue to service and collect outstanding loans in the FFEL portfolio. 

FSA services the ECASLA and DL Program through the use of private contractors. From 

passage of SAFRA through December 26, 2013, servicing activities were funded both by 

discretionary funds and mandatory funds (as provided by SAFRA for eligible Not-For-Profit 

(NFP) servicers). However, the Bipartisan Budget Act of 2013 eliminated mandatory funding for 

NFP servicing costs, instead requiring all servicing costs from date of enactment on to be 

funded by discretionary budget authority. 

Funding levels for the past 5 fiscal years were:

Fiscal year (dollars in thousands)

2011 ................................................... $992,012

2012 ................................................... 1,043,387

2013 ................................................... 978,924

2014 ................................................... 1,166,000

2015 ................................................... 1,396,924

_________________

FY 2016 BUDGET REQUEST

The Department requests $1.6 billion to administer the Federal student aid programs in fiscal 

year 2016, a $184.9 million increase, or 13 percent, above the 2015 Appropriation. The 

requested funds are necessary to manage and service the student loan portfolio, including: 

anticipated increases in loan volume; maintaining operations for student aid application 

processing, origination, disbursement functions, and student aid information technology (IT)

system hosting; managing the acquisition strategy for Federal Student Aid’s (FSA) core 

contracts for student aid application processing and system hosting; and improving data 

collection, reporting, and dissemination to the public. 

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STUDENT AID ADMINISTRATION

The most significant changes in the 2016 budget request from the 2015 level include:

1) Higher discretionary servicing costs for Federal student loan programs 

(+$174.0 million). The higher level reflects expected increases in loan volume, the 

aging of the student loan portfolio as more borrowers move into repayment, and 

renegotiated servicing contracts with pricing and incentives to improve customer 

service and keep borrowers current and in a payment plan that makes their debt 

manageable. More detail is provided on page Z-18.

2) Overall increase in operations and maintenance for Free Application for Federal 

Student Aid (FAFSA) processing, Pell Grants and Direct student loan origination and 

disbursement, and IT system hosting (+$3.2 million). More detail is provided 

beginning on page Z-21.

3) Increase to improve data transparency and student loan portfolio analytics 

(+$9.5 million). More detail is provided on page Z-21.

4) Increase in acquisition planning and procurement costs for critical expiring core 

contracts (+$8.7 million). More detail is provided on page Z-22.

The balance of the change from 2015 consists of decreases due to one-time expenses in 

2015 as well as small increases across various projects in 2016.

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STUDENT AID ADMINISTRATION

FY 2016 Budget Costs by Category

The following chart provides the funding level and the percentage share of the fiscal year 

2016 Budget by category. Ninety percent of the proposed SAA budget supports core delivery 

functions, FSA’s top priorities, and pay. Federal Student Aid’s major budget priorities include: 

effectively servicing the growing student loan portfolio; maintaining operations for student aid 

application processing, origination and disbursement functions and IT system hosting; procuring 

and developing systems to replace expiring core student aid systems; and improving data 

dissemination and reporting. 

 

Other core student aid systems (e.g., National Student Loan Data System, FSA’s accounting 

system), matching agreements (e.g., Social Security Administration, IRS FAFSA prepopulation), and IT security initiatives account for 3 percent of the request. The remaining 

7 percent includes overhead, which contains central support (e.g., rent, background 

investigations), central information technology (e.g., the Department’s EDCAPS financial 

systems) and the “Other” category that includes Web site interfaces, contract specialist support, 

and other activities to carry out FSA’s mission. 

FY 2016 Costs by Category and as Percent of Discretionary Request 

(dollars in millions)

Other, $32.5 , 2%

Overhead, $82.4 , 5%

Other Core Student Aid 

Systems, $33.9 , 2%

IT Security Initiatives, 

$16.3 , 1%

Pay, $196.5 , 12%

2016 Core Delivery 

Functions and Priorities, 

$1,220.3, 78%

The sections below show, by cost category, the major projects and their fiscal year 2016 budget 

funding levels. The budget request includes $196.5 million for personnel compensation and 

benefits costs of 1,350 FTE, 1,247 FTE in Federal Student Aid, and 103 FTE in the non-Federal 

Student Aid offices, as delineated on page Z-35.

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STUDENT AID ADMINISTRATION

2016 Priorities: $1,220.3 million

The four 2016 budget priorities and their funding levels are:

1. Effectively servicing the student loan portfolio: $855.2 million

The budget requests $855.2 million for loan servicing costs ($842.8 million for operations and 

maintenance for loan servicers, $11.6 million for system development costs, and $0.8 million for 

customer service satisfaction surveys required for allocation of borrower accounts based on 

performance). The servicing costs are based on the overall loan volume, repayment status mix 

of the loan portfolio, and the timing of loan delivery. Loan servicing costs are presented 

separately to provide greater transparency on the main cost to FSA.

Currently, the Department contracts with 13 servicers to provide borrower services for the 

Federal Direct Loan, Perkins Loan, and TEACH Grant programs. All servicers are funded 

entirely with discretionary budget authority. SAFRA provided mandatory budget authority to 

fund administrative costs of eligible NFP loan servicers; however, this same mandatory budget 

authority was eliminated by the Bipartisan Budget Act of 2013, requiring all servicing costs 

starting in fiscal year 2015 to be covered by discretionary budget authority.

The 2014 Consolidated Appropriations Act transferred the Health Education Assistance Loan 

(HEAL) program under the Public Health Service Act from Health and Human Services (HHS) to 

the Department, which was finalized in July 2014. Costs necessary to service the HEAL 

portfolio are included in the total servicing request for fiscal year 2016. 

FY 2016 Servicing Costs

Differences in distribution among loan statuses affect overall unit costs due to additional 

workload and related pricing for different statuses (e.g., in-repayment borrowers cost more to 

service than in-school borrowers). As loan volume grows and the portfolio matures, with more 

borrowers moving from in-school to in-repayment, the total cost for servicing will continue to 

increase. Servicing costs in fiscal year 2016 reflect current loan servicing projections. In 

addition, the request reflects revised pricing and performance metrics, which provide additional 

incentives for servicers to provide specialized and detailed information to borrowers on how to

remain or become current on their loan(s) and to provide high-quality customer service.

Servicing costs are very sensitive due to changes in borrower volumes and the distribution of 

borrowers among repayment statuses. A change in the distribution of borrowers (e.g., from inschool to in-repayment) can cause a significant increase in total servicing costs due to the 

increased costs to service in-repayment borrowers. In addition, if servicers do a better job of 

keeping borrowers current, an important goal for both FSA and for the borrower, then costs will 

rise as FSA pays servicers a higher per-unit price for current borrowers than delinquent 

borrowers. FSA monitors its annual operating plan and its projected servicing budget so that it 

has sufficient resources to ensure that borrowers’ loan servicing is not interrupted. The 

availability of FSA’s appropriations for two years allows FSA to have flexibility to meet 

Z-18
STUDENT AID ADMINISTRATION

unforeseen cost increases and to ensure that it has adequate balances to meet any cost 

increases. 

Servicing Recompete:

As of October 1, 2014, FSA's servicing portfolio included nearly 30 million student and parent 

borrowers and over $765 billion in outstanding loans. Efforts to serve borrowers better through 

strengthening incentives for loan servicers are detailed in the White House’s Factsheet: Making 

Student Loans More Affordable. 

FSA has begun to look at what model of loan servicing it might adopt in the future. The 

complexity of the options as well as the difficulties of any transition requires that FSA begin its 

analysis long before the contracts’ expiration date. In November 2014, FSA issued a request 

for information (RFI) on how it can manage its growing portfolio while improving borrower 

satisfaction and outcomes; providing common borrower experiences; and allowing for 

consolidated reporting of financial information, borrower data, and other portfolio data. FSA will 

use the RFI to gather information on approaches to manage the student loan portfolio, such as 

the use of a single servicing platform, the use of specialized vendors to provide call center 

operations, and how broader commercial servicing models might improve the student loan 

servicing process.

Customer Service Survey Data

The Department measures servicer performance in customer satisfaction and default 

prevention. Results from Customer Service Survey Data from June 2014 are displayed 

beginning on page Z-33. Updates to this data will be released by electronic announcement in 

the “Loans” section of the Information for Financial Aid Professionals (IFAP) Web site 

(http://ifap.ed.gov/ifap). 

Ensuring Borrowers Have Options to Keep their Student Loan Debt Manageable

FSA has eased the process for applying for income-based repayment plans by creating a new 

Income-Driven Repayment (IDR) e-application for all income-driven repayment options. The 

new IDR application contains a built-in repayment amount estimator to help borrowers see the 

difference in monthly payments and how various plans affect how long a borrower might be in 

repayment. 

FSA has also expanded its efforts to ensure that borrowers understand their repayment options. 

The Department has provided borrowers with information about these plans through targeted 

emails to borrowers who may be struggling to repay their loans, those with large loan balances, 

and borrowers about to enter repayment. From November through December 2013, the 

Department conducted an email campaign to 3.15 million unique borrowers, which specifically 

targeted at-risk borrowers who could benefit from an IDR plan. Over 30 percent of the 

recipients opened the email, which is above industry standards for these types of outreach 

campaigns; over 310,000 borrowers either visited the Repayment Estimator or accessed the 

IDR application and over 200,000 submitted an IDR application.

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STUDENT AID ADMINISTRATION

Based on the success of this initial campaign, FSA repeated the campaign in November 

2014 for 740,000 borrowers in-grace, since this group was the most responsive to previous 

email outreach. As of January 2015, the campaign is on track to meet or exceed last year’s 

metrics. Over half of the borrowers have opened the email and over 40,000 have submitted an 

application for an IDR plan. FSA is also planning additional outreach to borrowers who missed 

their first payment after their grace period ended, borrowers who have dropped out of school 

without completing a degree, and borrowers in default with low loan balances. Efforts to support 

vulnerable borrowers are outlined in Section 2 of the June 2014 Presidential MemorandumFederal Student Loan Repayments. 

The Department also worked with the Department of Treasury and Intuit Inc., to raise 

awareness about income-driven repayment plans on the TurboTax Web site. During the 

2014 tax filing season, Intuit featured a banner in its TurboTax Online tax preparation software 

with a message to let users know they have options for repaying Federal student loans. The 

banner linked to the Department of Education’s online Repayment Estimator, where users could 

determine if they could lower their monthly student loan payments through an income-driven 

repayment plan. From there, users could sign up for an income-driven or other repayment plan. 

During this campaign, the banner received nearly 99,000 clicks. Treasury and Education also 

included a message about Federal student loan repayment options on the back of envelopes 

containing 2013 tax refund checks. Envelopes for the 2013 tax year featured information 

regarding income-driven repayment plans, including a link to the Department of Education's 

student loan repayment estimator and approximately 25 million of these envelopes were mailed 

to tax filers in 2014 for the tax year 2013. Efforts to encourage support and awareness of 

repayment options for borrowers during tax filing season are outlined in Section 3 of the June 

2014 Presidential Memorandum-Federal Student Loan Repayments. 

Additionally, the Department conducted an online outreach campaign to highlight repayment 

options for current college students, recent graduates, and borrowers during May and June 

2014. The campaign included outreach on Facebook, Twitter, YouTube, and LinkedIn. The 

campaign resulted in approximately 149 million audience impressions, the total number of 

people who could have seen a given message, and 656,800 clicks, which sent users to FSA 

repayment tools and resources. 

Lastly, the Department produced several tools and resources including the Repayment 

Estimator, Financial Awareness Counseling Tool, Entrance and Exit Counseling, and 

StudentAid.gov to help students and their families make more educated decisions about 

planning and paying for college. The Department also launched the Financial Aid Toolkit, which 

consolidates Federal student aid resources into a searchable online database for individuals 

and organizations that help students and families make financial preparations for postsecondary 

education. The toolkit includes resources and content about loan repayment. 

The Department will continue its outreach to all borrowers to ensure that they have the 

necessary information to choose the repayment plan that is right for their circumstances. At the 

end of December 2014, approximately 1.85 million DL borrowers were enrolled in IBR and 

320,000 borrowers in PAYE. 

Z-20
STUDENT AID ADMINISTRATION

2. Maintaining continual operations for student aid application processing, origination 

and disbursement functions, and IT system hosting: $309.5 million

The budget request includes $309.5 million for student aid application processing, origination, 

and disbursement functions, and information technology (IT) system hosting, an increase of 

$3.2 million from fiscal year 2015. 

Included in this request are:

• Front End Business Integration (FEBI) ($91.9 million), including operations and 

maintenance ($77.6 million), school products and services ($12.8 million), and 

FAFSA enhancements ($1.5 million);

• Common Origination and Disbursement (COD) ($130.1 million); and

• IT system costs ($87.5 million), including the data center, software licenses, and 

the technical architecture and system support for FSA applications.

The FEBI contract components are severable and also include a price per application that is

based on a firm-fixed-price tiered schedule. A pre-determined tier is established before the next 

contract year. Applications are counted during the contract year regardless of the application 

year. FEBI’s operations and maintenance cost per applicant includes: FAFSA applications and 

all related communications; Central Processing System (CPS) for application processing and 

eligibility determination and supporting functions, Federal Student Aid Information Center 

(FSAIC) call center support, and annual enhancements to the application. In addition, FEBI 

school products and services provide the necessary tools for the school administrator through 

EDEXpress Financial Aid Administrators (FAAs) Access and Participation Management.

3. Policy Priorities: $28.2 million 

Regulatory Requirement—Gainful Employment (GE): $16.6 million 

The Department published the GE final rules on October 31, 2014 and the rules will become

effective July 1, 2015. FSA will use these funds to collect and validate student information, 

implement metrics and validation rules, disseminate information related to program 

performance, and support the challenge process. The 2016 request will be used to procure a 

system and support to manage student data challenges from institutions, system updates to 

implement metric calculations, data storage, and enforcement processes on FSA systems. The 

system and support to manage student data challenges will support GE, as well as other types 

of data challenges, such as cohort default rate challenges. 

Enterprise Data Warehouse and Analytics (EDW&A): $11.6 million

EDW&A is an initiative to create an enterprise capability that provides timely, accurate, and 

consistent access to FSA lifecycle data. This will be achieved through a multi-phase approach 

with various vendor support for requirements documentation, development, and deployment. 

During fiscal year 2015, phase 1 of EDW&A will include creation of an enterprise data 

warehouse containing major FSA lifecycle data and the architecture to support the robust 

reporting and analytical tools. The benefits of the EDW&A initiative will improve reporting and 

Z-21
STUDENT AID ADMINISTRATION

analysis by decreasing resource constraints currently placed on NSLDS and other operation 

systems. The 2016 request includes $1.6 million to support continual operations and 

maintenance for phase 1 and $10 million for development work, including efforts to incorporate 

additional student aid life cycle and external data to better inform analytical efforts and 

responsibly make student aid data more accessible for large scale research by external 

stakeholders.

4. Planning the acquisition process and procuring systems: $27.4 million 

FSA’s core operations and IT systems hosting are supported through FEBI and the Virtual Data 

Center (VDC). Both contracts are scheduled to expire between fiscal years 2015 and 2016. 

FSA is implementing a multi-year acquisition strategy to ensure operational continuity, increase 

efficiency, simplify operations, and reduce costs. The request includes procurement related 

costs for acquisition strategy assistance and transition and development costs.

The fiscal year 2016 request for these procurement activities is $27.4 million, an increase of 

$8.7 million over fiscal year 2015. The table below shows the major student aid procurement 

contracts for fiscal years 2015 and 2016 and the contract expiration dates; the table excludes 

ongoing operations and maintenance that will occur during these fiscal years. 

Funding for Major Student Aid IT Procurements

(dollars in millions)

Acquisition FY 2015 FY 2016 Contract Expiration Date

Front End Business Integration $18.7 $23.5 January 2015

Virtual Data Center 0.0 3.9 August 2016

Total 18.7 27.4

Below is a description of the fiscal year 2016 procurement activities:

Front End Business Integration (FEBI): $23.5 million

The current contract for FEBI expired in January 2015. FSA designed a multi-phased business 

effort to streamline the many functions (ombudsman, application and eligibility determination, 

and customer service delivery) for prospective applicants and processing current borrowers.

The FEBI recompete effort will improve FSA’s flexibility and responsiveness to legislative 

changes and organizational priorities, and establish contractual arrangements with increased 

transparency and performance metrics based on industry standards. During fiscal year 2014, 

Phase I acquired operational support for handling inquires made directly to the Ombudsman 

Group. Fiscal year 2015 will focus on the solicitation and award of a short term, as-is contract 

for the operations and maintenance of the Central Processing System (CPS)/Application 

Eligibility Determination System (AEDS) and solicitation and award of a new Customer Service 

Delivery contract to include call center services and support for the Federal Student Aid 

Information Center. The 2016 requested funds will support a solicitation for the long-term 

solution for the application processing and eligibility determination system. In addition, FSA will 

complete solicitations for the Participation Management and EDExpress systems, previously 

included in the FEBI contract. 

Z-22
STUDENT AID ADMINISTRATION

Virtual Data Center (VDC): $3.9 million

The VDC is a single computing environment for data and transaction processing, network 

communication services, infrastructure, and tools required to deliver financial aid. The VDC 

located in Plano, Texas hosts 56 systematic applications with 450 terabyte (TB) of data. The 

current contract ends in August 2016. The 2016 funds will support the recompete effort to

create, solicit and award one or more contracts to provide data center and technical 

infrastructure operations, maintenance and support services to all FSA systems and 

applications hosted and served by the VDC.

FSA has researched feasible options to incorporate public/private cloud computing and new 

technologies with the current data center infrastructure to leverage new techniques for the next 

10 years. During fiscal year 2015, FSA will develop the Statement of Objectives and the 

detailed requirements for the competition. FSA will prepare solicitation documents for a free 

and open competition, evaluate and select the best value proposals, and negotiate one or more 

contract awards to operate the VDC. 

The requested funds will support post-award transition activities including transition plans, 

security clearances, and hardware infrastructure. Transition is expected to take between 

12 and 18 months. Parallel servicing may be required under the new data center contract and 

the old contract in order to move production systems and data to new locations without 

interruption of service. 

Other Core Student Aid Administration Systems: $33.9 million

National Student Loan Data System (NSLDS): $12.5 million

NSLDS maintains detailed information regarding Title IV aid, such as the number of loans and 

grants made, and provides for the electronic exchange of data between program participants 

and the system. NSLDS stores and collects borrower data from borrowers, schools, lenders, 

and guaranty agencies and integrates data on student aid applicants and recipients. This 

comprehensive information is essential for calculating cohort default rates, preventing fraud and 

abuse through pre-screening and post-screening for Title IV aid eligibility, and calculating

statutory guaranty agency payments. NSLDS is also used for calculating student loan 

indebtedness of borrowers, budget formulation, portfolio management, and policy analysis. In 

addition to providing ongoing NSLDS operations, maintenance, and customer support, FSA is 

undertaking a major effort to improve further enrollment reporting and monitor persistence and 

completion among Federal student aid recipients. FSA is working with other Department offices 

on data enhancement, system integration, and data quality. 

Financial Management System (FMS): $7.5 million

FMS consolidates and manages all financial transactions from FSA’s feeder systems. FMS 

facilitates reconciliation and internal program management and reporting. The system tracks 

and manages payment processing for Federal Direct Loan originations and Pell Grant awards,

and processes refunds to borrowers for overpaid loans and payments to lenders and guaranty 

Z-23
STUDENT AID ADMINISTRATION

agencies. It also performs validations and reasonability checks to minimize erroneous 

payments. The 2016 request supports the operations and maintenance of the system. 

Integrated Partner Management (IPM): $7.5 million

In fiscal year 2015, IPM will be deployed, consolidating processes that are currently scattered 

among six disparate systems (Lender Application Process, Financial Statements & Compliance 

Audits, Participation Management portion of Student Aid Internet Gateway, Electronic 

Application (eApp), Postsecondary Education Participation (PEPS), and Electronic Records 

Management (ERM). IPM will simplify and reduce duplicate and conflicting data storage, 

complex system architectures, and excessive file exchange activities. IPM will provide a 

centralized view to all customers and employees of current institutional eligibility and oversight 

data. IPM will provide better data accuracy, information security through a single point of 

access, and help enforcement efforts. The 2016 request supports the operations and 

maintenance of the system.

Federal Student Aid Administration Interagency Agreements: $4.8 million

The Department enters into agreements with other Government agencies for the purpose of 

ensuring Federal student aid eligibility, locating borrowers who have defaulted on their Federal 

student loans, and providing services to simplify the aid process. Below is the listing of these 

agencies and the agreements:

Department of Health and Human Services: Through the HHS National Directory of New Hires 

program, the Department obtains new hire, quarterly wage, and unemployment insurance 

information on defaulted loan borrowers or aid recipients who owe the Department for grant 

overpayment. This agreement assists the Department in locating these borrowers or students to 

place them back into repayment status. The Department has renewed negotiations with HHS 

on a new Computer Matching Agreement for fiscal year 2015.

Department of Housing and Urban Development (HUD): The Department of Education provides 

information on student loan defaulters to the HUD Credit Alert Interactive Voice Response 

System, which determines eligibility for Federal housing loans. Borrowers who are ineligible 

due to student loan defaults may pay off their defaulted student loan to obtain the housing loan.

Department of Treasury, Bureau of the Fiscal Service: The Department has two interagency 

agreements with the Bureau of the Fiscal Service:

1. Federal Employee Salary Offset Program: Treasury identifies Federal employees 

whose Federal pay is or could potentially be offset through the Treasury Offset Program.

2. Lockbox Services: Treasury provides for the receipt, processing and deposit of 

mailed check payments from student loan borrowers.

Internal Revenue Service (IRS): The Department has three interagency agreements with IRS:

1. FAFSA Data Share: This agreement simplifies the FAFSA completion process by 

allowing applicants to transfer tax return information directly to the appropriate FAFSA 

Z-24
STUDENT AID ADMINISTRATION

data fields. Applicants are able to retrieve this data after passing an authentication 

process.

2. Taxpayer Address Request Program: This agreement assists in debt collection by 

allowing the Department to obtain the address of borrowers who have defaulted on their 

Federal student loans or owe the Department for grant overpayment.

3. IDR Plan Data Share: This agreement allows borrowers to use their IRS data to 

complete an IDR application, allowing an accurate income-based calculation of monthly 

payment amounts.

Social Security Administration (SSA): This agreement matches Title IV applicants against 

SSA’s master file for Social Security and citizenship verification.

Department of Homeland Security (DHS), United States Citizenship and Immigration Services:

This agreement verifies the immigration status of non-citizen applicants.

Defense Contract Audit Agency: This agreement provides required audit support for proposals 

and other contract audits, reducing the risk of inflated contract costs and ensuring that contract 

prices and proposals are fair and reasonable.

eCampus-Based: $1.6 million

The eCampus-Based system automates the administration of the Federal Perkins Loan, Federal 

Work-Study, and Federal Supplemental Educational Opportunity Grant programs. The system 

determines institutional funding needs and allocation levels based on data from the Fiscal 

Operations Report and Application to Participate; collects funding data to inform subsequent 

reallocations; maintains cumulative Perkins Loan funding histories; calculates institutional cohort 

default rates; catalogs low-income elementary and secondary schools for use in determining 

eligibility for teacher cancellation benefits; and identifies delinquent or defaulted Perkins loan 

borrowers. The request would support the operation and maintenance of the system. 

IT Security Initiatives: $16.3 million

IT Security: $16.3 million 

FSA takes seriously the ongoing security threats to operations and the real risks of 

compromising borrowers’ personal information. In addition to specific security requirements, 

FSA has specific initiatives to mitigate security risks: 

System Security Authorizations (SSA): $8.3 million

This initiative provides the basic security critical to ensure all FSA applications and general 

support systems are secured from malicious exploits and threats. Security authorizations and 

annual testing are mandated by the Federal Information Security Management Act and must be

performed before system upgrades are implemented. Continuous testing must be completed to 

maintain system security authorization. In addition, an official re-authorization is required every 

3 years for 50 FSA systems. 

Z-25
STUDENT AID ADMINISTRATION

In fiscal year 2015, FSA will complete its work around automated access request management 

for all FSA systems and create a mandatory training tracking system for FSA’s contractors. The 

2016 funds will be used for ongoing operations and external support.

Enterprise Identity Management System (EIMS): $3.5 million

The Enterprise Identity Management System addresses the issue of fragmented user account 

management and inconsistent methods of identity authentication. There is an increased 

security risk when borrowers use using their social security number and PIN. EIMS will require

a username/password combination. EIMS also will improve interoperability between agencies 

using PIV credentials and improve institutional partners’ interactions with FSA systems by 

consolidating multiple access logins providing a consistent personal authentication and

eliminating the use of social security numbers.

Security Operations Center: $2.0 million

The security operations center provides independent monitoring and analysis needed to protect 

the VDC infrastructure, systems and data from vulnerabilities. The Security Operation Center 

will automate the security sensors on approximately 1,500 servers housed at the VDC and 

communicate real-time information regarding suspicious events. The real-time information will 

enable FSA to react timely to suspicious activity and make timely reports to DHS.

In fiscal year 2016, FSA will continue to link external systems into the Security Operation Center 

to obtain a comprehensive evaluation of threats to FSA networks and data.

Access and Identity Management System (AIMS): $1.4 million 

The AIMS initiative provides simplified logon for approximately 70,000 users to access 20 major 

and minor FSA web applications. AIMS integrates horizontal sign-on to multiple applications, 

enforcing standardized security requirements such as identity, password complexity, and 

multifactor authentication. Funding in fiscal year 2016 includes the one-time cost of 

transitioning AIMS operations support from the current Enterprise Information Technology 

Infrastructure contract to a separate AIMS-specific vehicle.

Two-Factor Authentication: $1.1 million

Two-Factor Authentication increases the security of FSA systems by requiring two forms of 

authentication to allow user access. The first authentication mechanism is the user ID and 

password, and the second mechanism is a token, which generates a one-time password. 

Stronger authentication decreases the risk of fraud and unauthorized access to privileged data 

and is particularly important for remote users of FSA systems. Since fiscal year 2011, remote 

FSA and Department employees have utilized two-factor authentication for system access. 

Currently, FSA is enabling two-factor authentication for guaranty agencies, loan servicers, and 

Payment Collection Agencies and implementing a soft token solution to replace physical tokens.

Funding in fiscal year 2016 will be used for annual system updates and system modifications 

necessary to update multi-factor authentication technologies and integrate FSA systems not 

currently protected by Two-Factor Authentication.

Other: $32.5 million

The “Other” category includes projects aimed at supporting FSA’s mission and projects 

administered by FSA. Costs in the “Other” category include conference management, Web site 

Z-26
STUDENT AID ADMINISTRATION

interfaces, human capital support, contract specialist support, travel, and training. One project 

to highlight is conference management, which supports the annual Federal Student Aid 

Conference and Federal Student Aid’s participation in national financial aid related conferences 

(e.g., National Association of Student Financial Aid Administrators). Federal Student Aid uses 

these conferences to train over 6,500 financial aid professionals and disseminate information 

about Title IV programs. This training is part of FSA’s school oversight and responsibility and 

increases the integrity of the Federal Student Aid programs while ensuring appropriate 

stewardship of taxpayer resources. The 2016 request includes $2.7 million for conference 

management. Additional projects in this category also support FSA’s efforts to increase 

awareness of the availability of financial aid through targeted customer outreach and information 

dissemination, travel for program compliance and necessary technical assistance, and

accessibility improvement of student aid information for the blind and visually impaired. 

System Application Matrix

These two system matrixes, located on the following page, illustrate the interdependencies 

between the major student aid system applications for the core business functions and users. 

The first chart shows each system application, its projected costs for 2015 and 2016, and its

core business functions. The second chart shows the interdependencies between all system 

applications and schools, students, financial partners, and the Department.

Z-27
STUDENT AID ADMINISTRATION

System Applications and Core Business Functions Interdependencies

System Application

2015 Cost

(dollars in 

millions)

2016 Cost

(dollars in 

millions)

Student Aid 

Application 

Processing

Origination 

and 

Disbursement

Student 

Loan 

Servicing

Loan Servicing $771.7 $855.2 No X X

Common Origination and 

Disbursement 122.9 130.1 X X X

Front End Business 

Integration and FAFSA 

Operations 111.51 115.4 1 X X No

Virtual Data Center 33.2 58.2 1 X X X

Enterprise Software 

Licenses 20.6 23.6 X X X

National Student Loan Data 

System 14.9 12.5 X X X

Integrated Partner 

Management 11.5 7.5 No X X

Financial Management 

System 8.9 7.5 No X

Total Discretionary Costs 1,095.2 1,210.0 No No No 1 Amount includes recompete efforts.

Systems Applications and End Users

System Application School Student

Financial 

Partners 

Department 

of Education

Loan Servicing X X X X

Common Origination and 

Disbursement X X No X

Front End Business Integration and 

FAFSA Operations X X No X

Virtual Data Center No No No X

Enterprise Software Licenses No No xo X

National Student Loan Data System X X X X

Enterprise Information Technology 

Integration X

Integrated Partner Management X No X X

Financial Management System X No X X

Note: Financial Partners include lenders and guaranty agencies.

Z-28
STUDENT AID ADMINISTRATION

____________________________________________________________________________

Major SAA Contracts

The following table provides a list of Student Aid Administration contracts estimated to exceed 

$5 million in fiscal years 2015 and 2016.

Student Aid Contracts Projected to Exceed $5 Million, Fiscal Years 2015–2016

(dollars in millions)

*denotes vendor headquarters for loan servicers

Contract Description

2015

Vendor Vendor Location

FY 2015

Funding

FY 2016

Funding

Loan 

Servicing

Servicing and 

consolidation of 

direct student 

loans, Perkins 

loans, TEACH 

grants, servicing 

FFEL loans, and 

defaulted loans.

PHEAA; 

Great Lakes 

Education 

Loan 

Services Inc.; 

Nelnet 

Servicing 

LLC;

Navient;

Missouri 

Higher 

Education 

Loan 

Authority; 

ESA/

Edfinancial;

Aspire 

Resources 

Inc.;

Cornerstone; 

New 

Hampshire 

Higher 

Education 

Corporation; 

Oklahoma 

Student Loan 

Authority; 

Vermont 

Student 

Assistance 

Corporation;

Maximus;

Educational

Computer 

Systems

Harrisburg, PA*

Chester, PA

Mechanicsburg, 

PA

Pittsburg, PA

State College, PA

Madison, WI*

Aberdeen, SD

Boscobel, WI

Eau Claire, WI

Rocky Hill, CT

Stevens Point, WI

Eagan, MN

Plano, TX

Lincoln, NE*

Omaha, NE

Aurora, CO

Highlands Ranch, 

CO

Albany, NY

Newark, DE*

Fishers, IN

Indianapolis, IN

Reston, VA 

Wilkes-Barre, PA

Chesterfield, MO*

Knoxville, TN,

West Des 

Moines, IA;

Salt Lake City, 

UT;

Concord, NH*

Oklahoma City, 

OK;

Winooski, VT

Corapolis, PA*

$771.7 $855.2

Z-29
STUDENT AID ADMINISTRATION

Student Aid Contracts Projected to Exceed $5 Million, Fiscal Years 2015–2016

(dollars in millions)

*denotes vendor headquarters for loan servicers

Contract Description

2015

Vendor Vendor Location

FY 2015

Funding

FY 2016 

Funding

Loan Servicing Servicing and 

consolidation of 

direct student 

loans, Perkins 

loans, TEACH 

grants, servicing 

FFEL loans, and 

defaulted loans.

McLean, VA*

Washington, DC

Utica, NY

Greenville, TX

Frederick, MD

Woodbridge, VA

Coralville, IA

Lawrence, KS, 

Columbia, MO

Louisville, KY

Frankfurt, KY

Z-30
STUDENT AID ADMINISTRATION

Student Aid Contracts Projected to Exceed $5 Million, Fiscal Years 2015–2016

(dollars in millions)

*denotes vendor headquarters for loan servicers

Contract Description

2015

Vendor Vendor Location

FY 2015

Funding

FY 2016 

Funding

Common 

Origination and 

Disbursement

Disbursement of 

Pell Grants and 

Direct Loans.

Accenture 

LLP

Arlington, VA*

Columbus, GA

Monticello, KY

Niagara Falls, NY

Philadelphia, PA

San Antonio, TX

Washington, DC

$122.9 $130.1

Front-End 

Business 

Integration

Integration of 

application 

processing, aid 

awareness, and 

eligibility 

determination.

Vangent Inc. Fairfax, VA

Montgomery, AL

Reston, VA

Aurora, IL

Mt. Vernon, IL

Hattiesburg, MS

Arlington, VA

Coralville, IA

Herndon, VA

Las Cruces, NM

Lawrence, KS

Rockville, MD

Washington, DC

$111.5 $115.4

Z-31
STUDENT AID ADMINISTRATION

Student Aid Contracts Projected to Exceed $5 Million, Fiscal Years 2015–2016

(dollars in millions)

*denotes vendor headquarters for loan servicers

Contract Description

2015

Vendor Vendor Location

FY 2015

Funding

FY 2016 

Funding

Virtual Data 

Center

Data center for 

student financial 

aid systems.

Dell/Perot 

Systems

Plano, TX

Fairfax, VA*

Washington, DC

$33.2 $58.2 

Enterprise 

Software 

Licensing

Maintenance for 

software licenses 

for Financial 

Management 

System and 

database 

operations.

Various Various $20.6 $23.6

National 

Student Loan 

Data System

Loan-level 

database to verify 

student eligibility, 

calculate 

institutional default 

rates, pay 

guaranty agency 

fees, track 

enrollment for loan 

servicing, and 

support credit 

reform accounting.

Briefcase 

Systems 

Development 

Inc.

Great Falls, VA*

Arlington, VA

Coralville, IA

Venice, FL

Lawrence, KS

$14.9 $12.5

Integrated 

Partner 

Management

Integration of 

institutional 

eligibility 

determination and 

oversight of 

schools, lenders, 

guaranty agencies 

and other FSA 

partners.

BSC Systems;

Creative

Ideas Simple 

Solutions, Inc.;

2020 Co. LLC;

Quality 

Software 

Services, Inc. 

Clarksville, MD*

Washington, DC

$11.5 $7.5

Financial 

Management 

System

Accounting system 

for FSA 

transactions.

Avineon, Inc. Washington, DC

McLean, VA

$8.9 $7.5

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STUDENT AID ADMINISTRATION

Quarterly June 2014 Customer Service Performance Results

New Not-For-Profit Servicers

June 2014 Score by Allocation Metric

1 American Customer Satisfaction Index (ACSI) scale of 0 to 100.

METRIC

Aspire 

Resources Inc. CornerStone

ESA/

Edfinancial

1 % of Borrowers in Current 

Repayment Status

91.95% 93.08% 92.58%

2 % of Borrowers > 90 Days 

Delinquent

4.14% 3.11% 3.75%

3 Resolution of Borrowers

Delinquent > 180 Days

16.12% 35.55% 37.58%

4 Borrower Survey1 75.00 73.00 72.00

5 Federal Personnel Survey1 75.00 76.00 72.00

METRIC Granite State-GSMR MOHELA

1 % of Borrowers in Current Repayment 

Status

91.13% 93.77%

2 % of Borrowers > 90 Days Delinquent 4.22% 3.17%

3 Resolution of Borrowers Delinquent > 180 

Days

13.33% 23.30%

4 Borrower Survey1 73.00 70.00

5 Federal Personnel Survey1 68.00 83.00

METRIC OSLA

VSAC Federal 

Loans

1 % of Borrowers in Current Repayment 

Status

89.15% 90.68%

2 % of Borrowers > 90 Days Delinquent 4.87% 5.33%

3 Resolution of Borrowers Delinquent > 180 

Days

20.70% 24.77%

4 Borrower Survey1 73.00 74.00

5 Federal Personnel Survey1 68.00 70.00

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Quarterly June 2014 Customer Service Performance Results

Title IV Additional Servicers

June 2014 Score by Allocation Metric

1

 American Customer Satisfaction Index (ACSI) scale of 0 to 100.

Note: Updates to this data will be released by electronic announcement in the “Loans” section of the Information for 

Financial Aid Professionals (IFAP) Web site (http://ifap.ed.gov/ifap/). 

METRIC

FedLoan 

Servicing 

(PHEAA) Great Lakes Nelnet Navient

1 Defaulted Borrower 

Count 1.58% 1.57% 0.91% 0.67%

2 Defaulted Borrower 

Amount 1.03% 1.10% 0.57% 0.38%

3 Borrower Survey1 74.33 76.00 76.33 74.00

4 School Survey1 81.00 81.33 79.33 73.33

5 Federal Personnel 

Survey1 74.00 77.00 71.00 72.00

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STUDENT AID ADMINISTRATION

Non-Federal Student Aid Support Activities

In addition to funds directly allocated to Federal Student Aid to manage student aid programs, 

$100.2 million ($82.4 million in Overhead and $17.8 million in non-Federal Student Aid pay) of 

the fiscal year 2016 request, an increase from $99.7 million in fiscal year 2015, is allocated to

departmental offices for central support activities, such as central computer services and

financial management systems operations, rent and other overhead, and legal and policy 

expertise.

Funding for Departmentwide financial management systems funded by this account will total 

$15.0 million in fiscal year 2016, a slight increase from $14.7 million in fiscal year 2015. This 

increase is needed for upgrading the Department’s Financial Management Systems Software 

(FMSS) and continued operations of EDCAPS, as explained in the Program Administration

request.

Rent payments to the General Services Administration for FSA-occupied space will total 

$18.5 million for fiscal year 2016, the same level as fiscal year 2015.

Combined funding for central computer services and telecommunications will total $24.0 million 

in fiscal year 2016. There is a slight increase of $0.3 million for these activities from fiscal year 

2015.

Other non-pay central support services, including background investigations, will total 

$24.9 million in fiscal year 2016, a slight decrease from $25.0 million, the fiscal year 2015 level.

In addition to 1,247 FSA full-time staff, the fiscal year 2016 request also provides $17.8 million, 

for the salaries and benefits of 103 FTE outside FSA who perform student-aid related activities 

and are located in the Office of Postsecondary Education; Office of Management; Office of the 

General Counsel; Office of the Chief Financial Officer; Office of the Chief Information Officer; 

and Office of Planning, Evaluation, and Policy Development. 

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STUDENT AID ADMINISTRATION

PROGRAM PERFORMANCE INFORMATION

Performance Measures

This section presents selected program performance information, including, for example, GPRA 

goals, objectives, measures, and performance targets and data; and an assessment of the 

progress made toward achieving program results. Achievement of program results is based on 

the cumulative effect of program resources available in previous years as well as in fiscal year

2016 and future years, and the resources and efforts invested by those served by this program.

In December 2012, Federal Student Aid (FSA) released an updated strategic plan, Federal 

Student Aid: Strategic Plan, Fiscal Years 2012–16 which described the organization’s current 

goals and objectives. FSA’s performance indicators were last updated earlier this year to 

account for improvements in data collection and analysis that allowed for more accurate and 

better-aligned metrics. FSA is in the process of updating its Strategic Plan for Fiscal Years 

2015–19, anticipated for publication next year, in which FSA’s metrics will be further refined. 

Goal: Provide superior service and information to students and borrowers. 

Measure: Percent of first time FAFSA filers among high school seniors. 

Year Target Actual

2013 Baseline 59.2%

2014 58.8%–60.8% 60.1 

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: This metric is being carried over from the previous performance plan. 

However, enhancements were made to the definition of and timeframe for the calculation.

There are two reasons for the definition changes: timeliness and accuracy. Nearly 90 percent 

of FAFSA applications are processed by the end of the fiscal year; however, FSA has

traditionally waited until the end of the following fiscal year to measure that performance. 

Therefore, several of the changes—such as the 9 month timeframe—help align a given fiscal 

year’s score with the appropriate performance that led to the score. Also, historically, FSA 

lacked the data granularity to best isolate those who are most likely a high school senior, 

leading to the use of proxies—such as using “original” application status as a proxy for being a 

first-time filer, or using system-generated ages instead of those that more closely align with the 

age of typical high school seniors. Now that more appropriate data is available, FSA no longer 

needs to use the definitions that were adapted for a data-deficient environment. 

The number of first-time filers among the high school senior age population has and will 

continue to be a key focus of FSA, and the metric has been established as part of the 

department’s 5-year strategic plan. Several FSA efforts (e.g. StudentAid.gov, FAFSA 

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STUDENT AID ADMINISTRATION

Completion Tool, Financial Aid Toolkit, and Outreach Initiatives/Social Media Campaigns) are 

targeted at increasing the percentage of high school seniors that apply for aid.

Measure: Persistence among first-time filing aid recipients.

Year Target Actual

2013 Baseline 78.5%

2014 77.5%–79.5% 79.6

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: FSA seeks to measure the impact of student aid on program 

completion. By following first-time filing aid recipients (e.g., college freshman and adult 

learners) into their second year, FSA can see whether it is making improvements in how 

applicants are translating the aid they receive into educational persistence. The metric provides 

FSA with a key contribution to the President's 2020 Goal and calculation methodology.

Measure: Customer visits to StudentAid.gov.

Year Target Actual

2013 Baseline 30,700,000 visits

2014 > 30,700,000 visits 32,665,637

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: FSA has consolidated many disparate sites and systems into a single 

integrated student experience. With new tools such as the launch of the site's Repayment 

Estimator and the future inclusion of NSLDS loan data, StudentAid.gov will continue to evolve 

into an expansive resource serving students and borrowers as they traverse the student aid 

lifecycle. The metric will help FSA further gauge the success of its effort.

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STUDENT AID ADMINISTRATION

Measure: Social media channel subscribership.

Year Target Actual

2013 Baseline 296,000 subscribers

2014 > 296,000 subscribers 368,042

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: Since 2012 FSA has used social media tools to drive awareness, 

uncover insights, engage and interact with students and borrowers, and drive traffic to FSA's 

Web sites. This metric helps track FSA's progress in this domain, adapting to new preferences, 

channels and engagement platforms. The metric is calculated as the aggregate sum of likes, 

followers and subscribers across Facebook, Twitter and YouTube. By focusing on overall 

subscribership across FSA’s social media channels, the metric will help gauge the success of 

FSA's efforts to provide accurate and accessible student aid information across its digitally 

engaged customer base.

Measure: Customer service level of American Customer Satisfaction Index for entire aid 

lifecycle (1–100 Scale).

Year Target Actual

2012 78.0 78.5

2013 78.0 78.4

2014 77.4–79.4 78.4

2015 TBD

2016 TBD

Note: Customer Satisfaction Scores for the Entire Life Cycle are based upon ACSI scores from the application, inschool, and servicing experiences of students and borrowers. Data are weighted based upon the intensity of the 

experience to the overall life cycle and the number of students within each category of the life cycle. At the time of 

Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: To measure overall customer satisfaction level throughout the 

student aid lifecycle, FSA calculates a weighted score based on the American Customer 

Satisfaction Index (ACSI) surveys of applicants, students in school, and borrowers in 

repayment. This metric measures how FSA is meeting its customers’ expectations. 

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STUDENT AID ADMINISTRATION

Goal: Work to ensure that all participants in the system of postsecondary education 

funding serve the interest of students from policy to delivery. 

Measure: Ease of Doing Business School Survey (1–100 Scale).

Year Target Actual

2012 >=72.0 74.0o

2013 74.0 74.0

2014 73.0–75.0 76.9

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: FSA works closely with postsecondary institutions to provide millions 

of students with Federal student aid. Successfully delivering aid through a complex system 

depends on FSA’s ability to work well with its institutional, financial, and State partners, and to 

provide adequate oversight to ensure that participants are complying with program 

requirements. To ensure that all partners can easily access the information they need, FSA 

conducts a quarterly survey to gauge the “ease of doing business with FSA.” The baseline 

was set in fiscal year 2011 and FSA’s goal is to maintain or improve survey results each year. 

Measure: Percent of borrowers >90 days delinquent.

Year Target Actual

2012 <=10.0% 9.5%No

2013 <=10.0 8.3No

2014 8.1 9.9

2015 TBD

2016 TBD

Note: The borrower delinquency rate is defined as the average number of borrowers each year who are 91–270 days 

delinquent in the year ending June 30, divided by the average number of borrowers in repayment for the year (does 

not include in-school or in-grace loan statuses). At the time of Budget Release, Fiscal Year 2015 targets were not 

finalized.

Additional information: FSA met its target with a performance result of 9.9 percent in fiscal 

year 2014. Although the real number of delinquencies was expected to rise in fiscal year 2014, 

the total number of borrowers was expected to rise at a greater rate, allowing the delinquency 

rate to drop slightly. A focus on reducing the number of borrowers more than 90 days 

delinquent provides FSA with insight on how to communicate information about repayment 

options in a targeted and timely manner.

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STUDENT AID ADMINISTRATION

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

the public and private sector.

Measure: Aid Delivery Cost per Application.

Year Target Actual

2012 $10.90 $10.85No

2013 11.23 11.16

2014 11.94 11.43

2015 TBD

2016 TBD

Note: Data for this measure is derived from FSA’s Activity Based Costing model, which is updated on a quarterly 

basis, and reconciled to FSA’s Statement of Net Cost, ensuring all costs assigned to FSA are included in the cost 

model. Specifically, the measure is defined as the 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. At the time of Budget Release, 

Fiscal Year 2015 targets were not finalized.

Additional information: In fiscal year 2011, FSA developed two measures to gauge the 

efficiency of aid delivery. The first one is the Aid Delivery Cost per Application. Throughout 

fiscal year 2011, FSA improved aid delivery by automating and simplifying processes, such as 

simplifying the FAFSA application to make it easier to navigate and complete. This has resulted 

in a reduction of aid delivery costs below the target in fiscal years 2012 through 2014.

Measure: Loan Servicing Cost per Borrower.

Year Target Actual

2012 $19.64 $18.49

2013 21.02 21.42

2014 21.20 21.59

2015 TBD

2016 TBD

Note: Data for this measure is derived from FSA’s Activity Based Costing model, which is updated on a quarterly 

basis, and reconciled to FSA’s Statement of Net Cost, ensuring all costs assigned to FSA are included in the cost 

model. At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: The second measure gauges the efficiency of aid delivery. The Loan

Servicing Cost per Borrower is defined as the total direct costs for servicing in the year ending 

June 30, divided by the average number of borrowers in servicing for the year. 

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STUDENT AID ADMINISTRATION

Goal: Ensure program integrity and safeguard taxpayers’ interest

Measure: Improper Payment Rate.

Year Target Actual

2013 Baseline 1.33%

2014 1.33% 1.54

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: The measure is defined as the estimated total Direct Loan and Pell 

program improper payments divided by their estimated total program outlays for the fiscal year. 

The rate calculation is subject to change, as FSA coordinates with OMB to refine its 

methodologies and re-assess the risk of its programs. In previous years, the Improper Payment 

Rate was calculated separately for each of the three risk-susceptible programs. For fiscal year

2014, FSA is reporting a single ‘blended’ rate that divides aggregated estimated improper 

payments for all three by aggregated estimated outlays. This new, more comprehensive 

measure enables FSA to view its progress in a more holistic manner.

The blended rate for fiscal year 2014 is 1.54 percent, which exceeds the fiscal year 2014 target 

of 1.33 percent. The increase is due to continued refinements in the estimation methodologies, 

which may result in the rates being not directly comparable to prior year targets.

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STUDENT AID ADMINISTRATION

Measure: Percentage of contract dollars competed by FSA.

Year Target Actual

2013 Baseline 86.3%

2014 85.3–87.3% 88.7

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: This metric is an effort by FSA to improve its performance 

measurement by tracking its efficiency. The metric rests on the assumption that contracts which 

are competed are more likely to be cost-effective and of high quality. This assumption is 

supported by OMB, which encourages Federal agencies to compete contracts where possible. 

The metric is calculated as a 5-year rolling average. The numerator is the total amount of 

dollars competed over a 5-year period ending in the most recently completed fiscal year; the 

denominator is the total amount of dollars expended on contracts over the same period. The 

data is extracted from FPDS-NG using the standard “Competition Report” for contracting office 

“Federal Student Aid Procurement Activity.”

Measure: Collection Rate.

Year Target Actual

2012 $31.90

2013 $34.31 41.57

2014 45.65 35.90

2015 TBD

2016 TBD

Note: In fiscal year 2012 there was no target established for this measure. At the time of Budget Release, Fiscal 

Year 2015 targets were not finalized.

Additional information: This metric measures the average amount of dollars collected from 

individual borrowers in the fiscal year for each dollar spent to collect. Collections are defined as 

the total amount of principal collected on both current and defaulted debt during the 12 month 

period ending June 30 of each year. Costs include the total direct costs calculated for loan 

servicing plus debt collections for the same period using FSA’s Activity-Based Costing process. 

Measuring this rate helps FSA to gauge the efficiency of its back-end systems and processes.

FSA did not meet its target in fiscal year 2014, with a result of $35.90. This was a result of a 

policy change that significantly increased defaulted loans being rehabilitated with lower 

borrower payments, which ultimately resulted in higher aggregate agency collection costs and 

lower cash collected. Total collections from rehabilitated loans rose by 50 percent over the prior 

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STUDENT AID ADMINISTRATION

year, to $6.9 billion, and 69 percent of the increase in collections over the prior year can be 

attributed to rehabilitation.

Goal: Strengthen Federal Student Aid’s performance culture and become one of the best 

places to work in the Federal Government.

Measure: FSA Employee Engagement Index (Subset of Questions from Governmentwide 

Employee Viewpoint Survey)—Percentage of positive responses to survey.

Year Target Actual

2013 Baseline 64.2%

2014 >= 64.2% 67.7

2015 TBD

2016 TBD

Note: At the time of Budget Release, Fiscal Year 2015 targets were not finalized.

Additional information: In fiscal year 2014, moved to the Employee Engagement Index, a 

government-wide set of questions developed by the U.S. Office of Personnel Management and 

the Partnership for Public Service, for the Federal Employee Viewpoint Survey (FEVS). FSA 

exceeded its target score in fiscal year 2014 likely the result of improving the employee 

experience. FSA’s performance improved on 70 of the 71 questions found on the fiscal year

2014 FEVS.

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STUDENT AID ADMINISTRATION

Organizational Chart

FEDERAL

STUDENT AID

Policy Liaison and

Implementation

Staff

BUSINESS

OPERATIONS

PROGRAM

COMPLIANCE

CUSTOMER

EXPERIENCE

FINANCE

PERFORMANCE

MANAGEMENT

TECHNOLOGY ADMINISTRATIVE

SERVICES

RISK

MANAGEMENT

Strategic Planning

And Reporting

Staff

Business

Intelligence

Staff

Communications

And Outreach 

Staff

Correspondence

Services Team

Communications

And Outreach 

Services

Team

FSA

ACQUISTIONS

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