Department of Education

STUDENT AID ADMINISTRATION

Fiscal Year 2015 Budget Request

CONTENTS

Page

Appropriations Language ......................................................................................................AA-1

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

Amounts Available for Obligation ..........................................................................................AA-3

Obligations by Object Classification ......................................................................................AA-4

Summary of Changes ...........................................................................................................AA-5

Authorizing Legislation..........................................................................................................AA-7

Appropriations History...........................................................................................................AA-8

Significant Items in FY 2014 Appropriations Reports.............................................................AA-9

Summary of Request ..........................................................................................................AA-10

Activity:

Student Aid Administration...........................................................................................AA-11

Organizational Chart ...........................................................................................................AA-42
STUDENT AID ADMINISTRATION

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Appropriations Language

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

and 10 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 [$1,166,000,000] $1,446,924,000, to remain available until 

September 30, [2015] 2016.

2 (Department of Education Appropriations Act, 2014.)

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.
STUDENT AID ADMINISTRATION

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Analysis of Language Provisions and Changes

Language Provision Explanation

1 ...and subpart 1 of part A of title VII of the 

Public Health Service Act,...

This language provides authority to administer 

the Health Education Assistance Loan (HEAL) 

program.

2 ... to remain available until September 30, 

[2015] 2016.

This language provides for appropriated funds 

to remain available for 2 years.
STUDENT AID ADMINISTRATION

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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2013 2014 2015

Discretionary appropriation:

Appropriation............................................................ $1,043,387 $1,166,000 $1,446,924

Across-the-board reduction (P.L. 113-6)................... -2,087 0 0 Discretionar y appropriati on

 Subtotal, appropriation.................................... 1,041,300 1,166,000 1,446,924

Sequester (P.L. 112-25)............................................ -52,489 0 0

Transfer to Department of Education, Program 

Administration.......................................... -7,688 0 0

Transfer to Department of Education, Office of Civil 

Rights.......................................................... -1,100 0 0

Transfer to Department of Education, Office of 

Inspector General................................................... -1,100 0 0

Transfer from Department of Health and Human Mandatory Discretionar y 

appropriation Services for Health Education Assistance Loan Discretionar y appropriati on

Discretionar y appropoProgram ................................................................. 0 1,000 0

Discretionar y appropriati on Subtotal, adjusted discretionary appropriation 978,923 1,167,000 1,446,924

Mandatory appropriation: Mandator y appropriate

on Not-For-Profit Servicing ............................................ 354,911 226,891 0

Subtotal, discretionary and mandatory 

appropriation.................................................. 1,333,834 1,393,891 1,446,924

Unobligated balance, start of year................................ 71,941 54,642 0

Recovery of prior-year obligations................................ 20,183 0 0

Unobligated balance expiring ....................................... -450 0 0

Unobligated balance, end of year................................. -54,642 0 0

Total, direct obligations1........................... 1,370,866 1,448,533 1,446,924

1 The 2014 estimate reflects fully obligating amounts carried forward from fiscal year 2013. The amount available for 

obligation here may differ from the President’s 2015 Appendix. 
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Obligations by Object Classification

(dollars in thousands)

Object Class 2013 2014 2015

Personnel Compensation and Benefits: PC&B

PC&B Full-time permanent............................................... $134,127 $139,061 $139,972

PC&B Full-time temporary................................................ 132 0 0

PC&B Part-time................................................................ 775 0 0

PC&B Consultants............................................................ 2 0 0

PC&B Overtime................................................................ 29 76 76

PC&B Awards................................................................... 1,643 1,685 1,600

PC&B Other Compensation.............................................. 24 0 0

PC&B Benefits.................................................................. 38,983 39,232 39,277

Subtotal........................................................ 175,715 180,054 180,925

Travel ...................................................................... 1,861 2,846 2,793

Rental payments to GSA and others ....................... 18,801 18,534 18,534

Communications, utilities, and miscellaneous 

charges ................................................................. 246 74 55

Printing and reproduction......................................... 1,321 2,012 1,705

Contractual services and supplies: CS&S

CS&S Advisory and assistance services .......................... 5,642 4,820 5,350

CS&S Other services........................................................ 760,341 804,686 835,712

CS&S Training and tuition ................................................ 1,411 2,450 2,371

CS&S Purchases of goods and services .......................... 19,455 16,437 21,231

CS&S Operations and maintenance of facilities................ 142 360 0

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

CS&S Information technology services and contracts....... 383,878 415,722 377,857

Subtotal........................................................ 1,170,869 1,244,505 1,242,521

Supplies and materials............................................. 210 178 264

Equipment ............................................................... 1,720 100 127

Building Alterations.................................................. 123 230 0

Total, obligations1 1,370,866 1,448,533 1,446,924

1 The 2014 estimate reflects fully obligating amounts carried forward from fiscal year 2013. The Object Classification 

table here may differ from the President’s 2015 Appendix. 
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Summary of Changes

(dollars in thousands)

 

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

2015.............................................................................................. 1,446,924

Net change ............................................................ +280,924

Increases: 2014 base

Change 

from base

Built-in: Built

 BIncrease in personnel compensation and benefits primarily for 

a proposed Governmentwide 1 percent pay raise and increase 

in benefits for the Department’s share of health, retirement and 

other benefits. $178,161 +$1,088

Program:

 Increase in discretionary loan servicing costs due to the 

elimination of mandatory budget authority under the Bipartisan 

Budget Act. 502,749 +268,951

Pro Increase in information technology contracts for core student 

aid system contracts. 361,351 +16,506

Pro Increase in funding in advisory and assistance services for 

portfolio analytics. 4,820 +530

Pr Increase in goods and services from the Government due to 

increase in datashare interagency agreements with the 

Internal Revenue Service (IRS). 16,437 +4,794

Pro Increase in supplies and materials. 178 +86

ProgIncrease in equipment. 100 +27

Pr Increase in training. 2,364 +7

Subtotal, increases +291,989
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Summary of Changes—Continued

(dollars in thousands)

____________________________________________________________________________

Decreases: 2014 base

Change 

from base

Program: Prog

Decrease in other services due to completion of ombudsman 

project and system changes. $74,046 -$10,034

Decrease in awards. 1,685 -85

Decrease in operations and maintenance of facilities. 360 -360

Decrease in printing. 2,012 -307

 Decrease in building alterations. 230 -230

 Decrease in operations and maintenance of equipment. 30 -30

 Decrease in postage. 74 -19

Subtotal, decreases -11,065

Net change +280,924

 
STUDENT AID ADMINISTRATION

Authorizing Legislation

(dollars in thousands)

Activity

2014

Authorized

2014

Estimate

2015

Authorized

2015

Request

Student aid administration (Higher 

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

section 458; Public Health Service Act, 

VII-A) Indefinite $1,166,000 Indefinite $1,446,924

Total definite authorization 0 0

Total discretionary appropriation 1,166,000 1,446,924

Total mandatory appropriation 226,891 0

Total appropriation 1,392,891 1,446,924

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STUDENT AID ADMINISTRATION

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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress 

House 

Allowance Footnote

Senate 

Allowance Footnote Appropriation Footnote

2006 $939,285 $124,084 $120,000 $118,800

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

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 $1,000 thousand proposed to be transferred from Department of Health and Human Services to 

Department of Education for the Health Education Assistance Loan program. The actual transfer between HHS and 

ED will reflect the remaining unobligated balances at the time of transfer. 
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Significant Items in FY 2014 Appropriations Reports

SAA Obligation Plan for Mandatory and Discretionary Funds

Senate: S.R. 113-71. The Committee directs the Department to continue to provide 

quarterly reports detailing its obligation plan by quarter for spending mandatory 

and discretionary funding for student aid administrative activities broken out by 

servicer, activity, and funding source.

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

directed to the Committees on Appropriations of the House of Representatives 

and the Senate.

Streamlined Metrics Across Loan Servicers

Managers’

Statement: P.L. 113-76. The Committee directs the Secretary to submit a report no later 

than March 31, 2014, detailing its plan to streamline the metrics by which Not-forProfit (NFP) servicers and Title IV Additional Servicers (TIVAs) are measured to 

ensure consistency across all servicing contracts.

Response: The Department is currently reviewing metrics for all servicing contracts and will 

provide a plan to the Committees on Appropriations of the House of 

Representatives and the Senate, as well as to the Committee on Education and 

the Workforce and the Committee on Health, Education, Labor and Pensions, as 

directed.
Summary of Request

DEPARTMENT OF EDUCATION FISCAL YEAR 2015 PRESIDENT'S BUDGET 

Click here for accessible version 

(in thousands of dollars) 2015

Category 2013 2014 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 1 D 642,057 663,251 675,224 11,973 1.805%

 2. Servicing activities D 336,867 502,749 771,700 268,951 53.496%

Subtotal 978,924 1,166,000 1,446,924 280,924 24.093%

 3. Health education assistance loan program (non-add) 2 D 0 1,000 0 (1,000) -100.000%

 4. Not-for-profit servicers M 367,593 226,891 0 (226,891) -100.000%

Total 3 1,346,517 1,392,891 1,446,924 54,033 3.879%

Discretionary D 978,924 1,166,000 1,446,924 280,924 24.093%

Mandatory M 367,593 226,891 0 (226,891) -100.000%

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

For mandatory programs, the levels shown in the 2014 Appropriation column reflects the 7.2 percent sequester that went into effect October 1, 2013, pursuant to the Budget Control Act of 2011 (P.L. 112-25); 

the 2015 President's Budget column does not reflect a sequester in 2015. 

Detail may not add to totals due to rounding. 

1 The Student Aid Administration total in the 2015 President's Budget includes $3,000 thousand for the Health Education Assistance Loan (HEAL) program. 

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. 3 Reflects transfers in 2013 of $7,688 thousand, $1,100 thousand, and $1,100 thousand from Student Aid Administration (totaling $9,888 thousand) to Program Administration, Office for Civil Rights, 

and Office of Inspector General, respectively.

Compared to 2014 Appropriation

2015 President's Budget 

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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 2015 Authorization: Indefinite

Budget Authority

Activity

2014 F

o

ot

n

ot

e

2015Footnote

20Change 

from 2014

Salaries and Expenses: 0 0 0

Sal aries and Expenses Personnel costs $179,922 $180,925 +$1,003

Sal aries and Expenses Non-personnel costs,

excluding loan servicing costs 483,329 494,299 +10,970

Subtotal, salaries and expenses 663,251 675,224 +11,973

Loan servicing activity discretionary costs 502,749 1 771,700 2 +268,951

Total, discretionary costs 1,166,000 1,446,924 +280,924

Not-For-Profit servicing mandatory costs 226,891 3 0 4 -226,891

Total, mandatory costs 226,891 0 -226,891

Total, student aid administration 1,392,891 1,446,924 +54,033

FTE employees 1,320 1,320 0

_________________

1

 Includes $249,352 thousand in servicing costs for Title IV Additional Servicer (TIVAS) servicing contracts,

$167,442 thousand in servicing costs for Not-For-Profit (NFP) servicing contracts, $2,240 thousand for NFP TIVAS 

development costs, $58,517 thousand in servicing costs for the Common Services for Borrowers servicing contract, 

$2,700 thousand for shutdown activities associated with the Common Services for Borrowers servicing contract, 

$2,913 thousand in servicing costs for Department-held Perkins Loans, $13,273 thousand for Debt Management 

Collection System (DMCS) development costs, $3,800 thousand for TIVAS development costs, $937 thousand for 

Teacher Education Assistance for College and Higher Education (TEACH) grants servicing costs, and 

$1,575 thousand for a customer satisfaction survey required for TIVAS servicer volume allocation. 2

 Includes servicing costs of $616,006 thousand for TIVAS servicing contracts, $69,638 thousand in servicing 

costs for NFP servicing contracts, $72,536 thousand for DMCS servicing and development costs, $3,154 thousand 

for Department-held Perkins Loans servicing, $7,600 thousand for TIVAS development costs, $1,128 thousand for 

TEACH grants servicing, and $1,638 thousand for a customer satisfaction survey required for TIVAS servicer volume 

allocation. 3

 Includes $223,923 thousand in servicing costs for NFP servicing contracts, $2,660 thousand for NFP TIVAS 

development costs, and $308 thousand for a Financial Management System interface to NFPs. 4 The Bipartisan Budget Act of 2013 (P.L. 113-67) eliminated mandatory funding to fund the operations of eligible 

and qualified NFP student loan servicers under contract with the Department. 
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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 aid; processing millions of 

student financial aid applications; disbursing billions of aid dollars; administering billions of 

dollars in existing guaranteed loans; servicing tens of millions of accounts; and partnering with 

schools, financial institutions, and guaranty agencies to prevent fraud, waste, and abuse.

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

Student Aid (FSA) are responsible for administering the Federal student financial assistance 

programs. OPE formulates policy for the 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 of the student aid programs.

The Higher Education Amendments of 1998 established FSA as the Federal Government’s first 

performance-based organization (PBO) to improve service to 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 Federal Pell Grant Program is the foundation for Federal financial assistance. The program

ensures financial access to postsecondary education by disbursing $32.4 billion to 8.9 million 

low- and middle-income undergraduate students during the 2013-2014 award year, with an 

average award of $3,651. The maximum Pell Grant award has grown from $4,731 for the 

2008–2009 award year to $5,730 for the 2014-2015 award year and is projected to be 

$5,830 for the 2015-2016 award year. 

The William D. Ford Federal Direct Loan (DL) Program drives FSA’s workload. The DL program 

lends funds directly to students and their families through participating schools by providing 

subsidized and unsubsidized loans. The DL program is funded by borrowing from the U.S. 

Treasury and an appropriation for subsidy costs. See the Student Loans Overview and 

Student Aid Overview for details on Student Loan programs in the 2015 Budget.

The Federal Family Education Loan (FFEL) Program provided similar eligibility requirements 

and loan limits as the Federal Direct Loan Program; however, instead of the Government 

disbursing funds to borrowers, private lenders provided those funds which were insured by loan 

guaranty agencies and then reinsured by the Government. 

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
STUDENT AID ADMINISTRATION

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four programs to ensure students and families had access to FFEL loans through the 2009-

2010 award year. FSA continues to administer these programs, which continue to affect its

workload. ECASLA increased the loan servicing workload, doubling the volume of loans 

serviced by the Department’s private sector contractors. 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, required all new Federal student loans to be originated through the DL

program and serviced by the Department of Education effective July 1, 2010. Although all new 

loans are made through the DL program, FSA continues to administer many aspects of the 

FFEL program, while lenders and guaranty agencies continue to service and collect outstanding 

loans in the FFEL portfolio. In fiscal year 2015, the Department will make $102 billion in new

Direct Loans, excluding Consolidation Loans. The total outstanding portfolio of all loans is over 

$1 trillion.

FSA has provided the necessary ECLASA and Direct Loan servicing capacity, which is 

discussed on pages AA-16 through AA-17. 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 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. Over 96 percent, 

$269 million, of the requested increase will cover these servicing costs formerly funded by 

mandatory budget authority and will ensure uninterrupted and continual operations for servicing 

student loans. 

Funding levels for the past 5 fiscal years were:

Fiscal year (dollars in thousands)

2010 .................................................... . $788,402

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

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

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

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

_________________

FY 2015 BUDGET REQUEST

The Department requests $1.4 billion in discretionary resources to administer the Federal 

student aid programs in fiscal year 2015, a $280.9 million increase, or 24 percent, more than the 

fiscal year 2014 appropriation. The requested funds are necessary to manage and service the 

student loan portfolio, including the shift from mandatory budget authority to discretionary

budget authority and anticipated increases in loan volume; maintain operations for student aid 

application processing, origination, disbursement functions, and student aid information 

technology (IT) system hosting; and manage the acquisition strategy for FSA’s core contracts 

for origination and disbursement, student aid application processing, and system hosting. 
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The most significant changes from the fiscal year 2014 level are:

1) Loan servicing (+$269.0 million). The higher level reflects an increase in costs 

associated with the shift from mandatory budget authority to discretionary budget 

authority in the Bipartisan Budget Act of 2013, and the overall anticipated increase in 

loan volume for the entire portfolio. More detail is provided beginning with page 

AA-16.

2) Acquisition planning and procurement costs for critical expiring core contracts 

(+$9.7 million). More detail is provided beginning with page AA-18.

3) An overall increase (+$2.2 million) in operations and maintenance for Free 

Application for Federal Student Aid (FAFSA) processing, Pell Grant and Direct 

student loan origination and disbursement, and IT system hosting. This increase is 

attributable to increasing applications, originations and disbursements. More detail is 

provided, beginning page AA-20.
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FY 2015 Budget Costs by Category

The following chart provides for each fiscal year 2015 cost category the funding level and 

percentage share of the fiscal year 2015 Budget. Eighty-eight percent of the proposed SAA 

budget supports 2015 FSA core operations and personnel costs. FSA’s major budget priorities 

are: effectively servicing the growing student loan portfolio; maintaining operations for student 

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

modernizing key expiring core student aid systems. 

 

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 4 percent of the request. The remaining 

8 percent includes overhead and the “Other” category, which contains central support (e.g.,

rent, background investigations), central information technology (e.g., the Department’s 

EDCAPS financial systems), Web site interfaces, contract specialist support, and other activities 

that support FSA’s mission.

The sections below show, by cost category, the major projects and their fiscal year 2015 budget 

levels. The Budget includes $180.9 million to cover the personnel compensation and benefits 

costs of 1,320 FTE, 1,229 FTE in Federal Student Aid, and 91 FTE in the non-Federal Student 

Aid offices, delineated on page AA-34.

FY 2015 Priorities – $1,085.0 million

2015 Priorities, 

$1,085.0, 75%

Pay, $180.9, 13%

Other Core Student Aid 

Systems, $37.0, 3%

IT Security Initiatives, 

$16.8, 1%

Overhead, $81.5, 6% Other, $45.7, 2%

FY 2015 Costs by Category and as Percent of Discretionary Request (dollars in millions)
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Effectively servicing the student loan portfolio: $771.7 million

The fiscal year 2015 budget request includes a total of $771.7 million for loan servicing costs 

($762.5 million for operations and maintenance for loan servicers, $7.6 million for system 

development costs, and $1.6 million for customer service satisfaction surveys required for 

allocation of borrower accounts). The servicing cost estimate is based on overall loan volume, 

repayment status of the borrower, and the timing of loan delivery. Loan servicing costs are 

presented separately from other student aid administration operating costs to provide greater 

transparency on the main cost to FSA.

Currently, the Department contracts with 11 TIVAS and NFP Servicers. The 4 TIVAS servicers

are Sallie Mae, Nelnet, American Education Services/Pennsylvania Higher Education 

Assistance Agency (AES/PHEAA), and Great Lakes Education Loan Services (the last two are 

also NFPs). The 7 additional new NFP servicers that started under SAFRA are Missouri Higher 

Education Loan Authority, ESA/EDFinancial, Cornerstone, Aspire, Granite State, Oklahoma 

Student Loan Authority, and Vermont Student Assistance Corporation.

All servicers will be funded with discretionary resources. SAFRA provided mandatory budget 

authority to fund administrative costs of eligible NFP loan servicers; however, the Bipartisan 

Budget Act of 2013 eliminated mandatory funding for NFP servicing costs. 

FY 2015 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, the costs of servicing increase. 

However, unit costs for loan servicing are expected to remain steady between 2014 and 2015 

for the TIVAS servicers. 

These tables detail the discretionary budget authority for the TIVAS and NFP servicers, average 

unit costs, and the major assumptions behind servicing costs for Department-held Federal 

student loans. Servicing costs are largely determined by volume (average borrower accounts 

per month) and the average negotiated contractual unit costs. Average borrower accounts per 

month are calculated by the distribution of new unique borrower accounts to a servicing

contractor. The average unit cost to service each borrower’s loans is derived by contractual 

pricing schedules based on different borrower statuses (e.g., in-school, in-grace/current 

repayment, deferment/forbearance, and delinquency). 

 
STUDENT AID ADMINISTRATION

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1 Amounts are obligations and may differ from total budget authority.

Note: TIVAS includes Sallie Mae, Nelnet, American Education Services/Pennsylvania Higher Education Assistance 

Agency (AES/PHEAA), and Great Lakes Education Loan Services.

1 Amounts are obligations and may differ from total budget authority.

Customer Service Survey Data

Since September 2009, the Department has been assigning federally-owned loans to a team of 

private contractors. Per the contractual agreement with these loan servicers, the Department 

annually measures servicer performance in the areas of customer satisfaction and default 

prevention. These results determine each servicer’s allocation of future loan volume. Results 

TIVAS Servicers:

Major Assumptions Driving Servicing Costs

2013 2014 2015

TIVAS (Borrowers) 28,499,657 31,185,537 34,397,002

TIVAS Average Unit Cost per Month 

(whole dollars)

$1.66 $1.67 $1.67

Number of Servicing Months 12 12 12

TIVAS Loan Servicing Cost 

(dollars in millions)

$567 $625 $690

TIVAS Other Servicing Costs 

(Development and Customer 

Surveys)

(dollars in millions)

$10 $21 $9

Perkins Loan Servicing Cost 

(dollars in millions)

$2 $3 $3

Total Loan Servicing Cost 

(dollars in millions)

$5791 $649 $702

Not-For-Profit Servicers:

Major Assumptions Driving Servicing Costs

2013 2014 2015

Not-For-Profit Volume (Borrowers) 3,229,467 3,027,353 2,901,798

Not-For-Profit Average Unit Cost per 

Month (whole dollars)

$2.24 $2.22 $2.00

Number of Servicing Months 12 12 12

Not For-Profit Loan Servicing Cost 

(dollars in millions)

$87 $81 $69

Not-For-Profit Other Servicing Costs 

(Development and Start-up)

(dollars in millions)

$12 0 0

Total Not For-Profit Loan Servicing 

Cost 

(dollars in millions)

$991 $81 $69
STUDENT AID ADMINISTRATION

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from Customer Service Survey Data from June 2013 are displayed on page AA-32. 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). 

Targeted Repayment Options for Borrowers

In addition to servicing borrowers’ loans, FSA has helped to ease borrowers’ applications for 

income-based repayment plans by creating a new Income-Driven Repayment (IDR) 

e-application, which includes Income-Based Repayment (IBR), Income-Contingent Repayment,

and Pay As You Earn (PAYE) repayment options. The new IDR application contains a built-in 

repayment amount estimator to help borrowers see the difference in monthly payments for the 

different IDR plans. 

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

options for current college students, recent graduates, and borrowers during November and 

December 2013. The campaign included outreach on Facebook, Twitter, YouTube, LinkedIn, 

and other Web sites. The campaign resulted in approximately 233 million audience impressions 

and 712,700 clicks, which sent users to Federal Student Aid repayment tools and resources. 

To help students and their families make more educated decisions about planning and paying 

for college, the Department produced several tools and resources including the Repayment 

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

StudentAid.gov. At the end of fiscal year 2013 there were approximately 1 million borrowers 

that selected IBR and 60,000 borrowers in PAYE. 

For the 2015 Budget, 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. 

Strategically planning the acquisition process including procurement of systems: 

$36.0 million 

FSA’s core operations and IT systems hosting are supported through several large contracts: 

FEBI, COD, National Student Loan Data System, and Virtual Data Center. All of these 

contracts are scheduled to expire between fiscal years 2014 and 2016. FSA is implementing a 

multi-year acquisition strategy for all these contracts to ensure operational continuity while 

leveraging the competitive procurement process to increase efficiency, simplify operations, and 

reduce costs. The request includes procurement related costs for acquisition strategy 

assistance and development costs.

During fiscal years 2012 and 2013, FSA’s Performance Management Unit used the Enterprise 

Strategic Acquisition Plan (ESAP) to review the documentation procedures and portability of the 

systems (FEBI, COD, Direct Loan Consolidation System, and Debt Management Collection 

System), documentation of business requirements, statement of objectives, performance work 

statements, service level agreements, and market research. As a result, FSA can design an 

acquisition process that will reduce risk when transitioning core legacy operations. 

The fiscal year 2015 request for these procurement activities is $36 million, an increase of 

$9.7 million over fiscal year 2014. The table below shows the major student aid procurement 
STUDENT AID ADMINISTRATION

AA-19

contracts for fiscal years 2014 and 2015 and the contract expiration dates; the table excludes 

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

Funding for Major Student Aid Procurements

(dollars in millions)

Acquisition FY 2014 FY 2015 Contract Expiration Date

Common Origination Disbursement $5.1 $13.5 September 2015

Front End Business Integration 15.0 16.5 January 2015

National Student Loan Data System 3.2 0.0 July 2014

Virtual Data Center 3.0 6.0 August 2016

Total 26.3 36.0

Below is a description of the fiscal year 2015 procurement activities:

Common Origination and Disbursement (COD): $13.5 million

The COD system processes origination and disbursement records for Pell Grants, TEACH 

Grants, Iraq/Afghanistan Service Grants, and Direct Loans (Stafford, Unsubsidized Stafford for 

undergraduate and graduate/professional students, Parent PLUS and Graduate PLUS). These 

grant and loan programs—excluding Direct Consolidations—will provide an estimated 

$141 billion to students and parents in fiscal year 2015. The COD contract includes system 

operations and maintenance activities, a call center, the StudentLoans.gov Web site, and 

customer service to assist institutions with processing data and managing their loan 

administration activities. 

The fiscal year 2015 request includes funding for the procurement of an origination and 

disbursement services contract prior to the expiration of COD. This funding will allow for 

acquisition planning; market research; and a full and open competition among vendors to either 

provide the solution by modifying their own existing system or to develop a new system,

whichever has the most benefit to the Government. 

Front End Business Integration (FEBI): $16.5 million 

The current contract for FEBI is set to expire January 2015. In order to move this large core 

system to a new contract, FSA designed a multi-phased business effort to streamline the many 

functions (application processing and eligibility determination, customer service delivery, and 

ombudsman) for prospective and current borrowers. The FEBI recompete would 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 2013, phase I of this recompete effort prioritized 

operational support for handling inquires to the Ombudsman Group. Fiscal year 2014 will focus 

on application processing and eligibility determination. The requested funds for fiscal year 2015 

would support the front-end customer contact center, which provides information to student aid 

applicants.
STUDENT AID ADMINISTRATION

AA-20

Virtual Data Center: $6.0 million 

The Virtual Data Center (VDC) is a single computing environment for data and transaction 

processing, network communication services, infrastructure, and tools required to deliver 

financial aid. The VDC is a large central site that hosts 56 systematic applications necessary to

deliver student financial aid. The current contract with Dell will end in August 2016. FSA will 

create, solicit and award 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.

During fiscal year 2014, FSA will use funds to define alternative hosting strategies, technical 

architectures and contractual structures of a new FSA Virtual Data Center. FSA will prepare the 

formal solicitation documents for a full and open competition, conduct information sessions with 

the market, and publish proposals to meet the VDC requirements.

During fiscal year 2015, FSA will evaluate and select the best value proposals, and negotiate 

best and final offers for the new VDC. Parallel servicing will be required under the new data 

center contract and the preceding contract until the new system is fully operational so that there 

is no interruption of service to users. 

Maintaining continual operations for student aid application processing, origination and 

disbursement functions, and IT system hosting and security: $277.3 million

The budget request includes $277.3 million for student aid application processing, origination, 

and disbursement functions, and IT system hosting, an increase of $2.2 million from fiscal year

2014. Like servicing, these costs are driven by volume and are needed to process FAFSAs, 

originate and disburse student loans, and maintain the necessary IT infrastructure to prevent 

loss of critical student aid information and service interruption for students and borrowers. Key 

FSA operational costs include:

• Front End Business Integration (FEBI) ($56.6 million), including operations and 

maintenance ($49.9 million), school products and services ($4.7 million), and 

FAFSA enhancements ($2 million);

• Common Origination and Disbursement (COD) ($116.2 million); and

• IT system costs ($104.5 million), including the operation and maintenance of the 

data center, software licenses, the technical architecture and system support for 

FSA applications.

The FEBI contract components are severable and also include a price per application based on 

a firm fixed-price tiered schedule. A predetermined 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 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 FAFSA application enhancements. FEBI school products and 

services include necessary tools for schools with EDEXpress Financial Aid Administrators 

(FAAs) Access, Participation Management, and COD Ancillary Services.
STUDENT AID ADMINISTRATION

AA-21

Other Core Student Aid Administration Systems - $37.0 million

National Student Loan Data System (NSLDS): $13.8 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 FSA. 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 student loan indebtedness of borrowers, 

budget formulation, portfolio management, and policy analysis. NSLDS is also used to calculate 

school cohort default rates, prevent fraud and abuse through pre-screening and post-screening 

for Title IV aid eligibility, and calculate statutory guaranty agency payments.

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

undertaking a major effort to improve 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. The Administration has made 

college affordability and transparency a top priority for prospective students and their families

with the College Scorecard, an interactive tool allowing users to search colleges based on 

various factors (e.g., programs or majors offered, awards offered, location, undergraduate 

enrollment size, and campus setting). The College Scorecard provides students and parents 

information on college costs, graduation rates, loan default rates, and median borrowing. In the 

future, employment information should be useful for making an informed decision on college 

choice. In addition, these upgrades will help FSA and the Department establish the college 

rankings system. The fiscal year 2015 request also includes costs associated with the College 

Scorecard effort under the Office of Postsecondary Education.

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 

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

payments. The 2015 request supports the operations and maintenance of the system. 

Integrated Partner Management (IPM): $7.1 million

During fiscal year 2015, IPM will become operational, consolidating processes that are currently 

scattered among six disparate systems: Lender Application Process, Financial Statements and

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

Electronic Application (e-App), 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 of Federal Student Aid for all customers and employees to have access to 

the same current institutional eligibility and oversight data. IPM will provide better data 

accuracy, information security through a single point of access, and effective oversight to target 

enforcement efforts. 
STUDENT AID ADMINISTRATION

AA-22

Federal Student Aid Administration Interagency Agreements: $7.0 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 (HHS): 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 good repayment status. 

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 for 

housing loans due to student loan defaults will frequently pay off their defaulted student loan to 

obtain the housing loan.

Department of Treasury, Fiscal Service: The Department has two interagency agreements with 

Fiscal Service:

1. Through the Federal Employee Salary Offset Program, Treasury shares information 

with the Department regarding employees whose Federal pay is or could potentially be 

offset through the Treasury Offset Program.

2. This agreement with Lockbox Services 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 Project: This agreement simplifies the FAFSA completion 

process by directly transferring tax return information to the appropriate FAFSA data 

fields. Applicants will be 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. IBR Plan Data Share: This agreement allows borrowers to connect with IRS directly

to retrieve their Adjusted Gross Income (AGI) for completing the income-based 

repayment 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.
STUDENT AID ADMINISTRATION

AA-23

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

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

Disaster Assistance Improvement Plan: The Disaster Assistance Improvement Plan will 

implement provisions of Executive Order 13411, Improving Assistance for Disaster Victims, 

which will ensure that individuals who are victims of a terrorist attack or natural disaster have 

access to Federal disaster assistance.

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 - $16.8 million

IT Security: $16.8 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): $9.2 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 required 

to 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. 

Beginning in fiscal year 2014, security authorizations will also be conducted on 20 guaranty 

agency systems. In fiscal year 2015, FSA will also ensure school systems are in compliance 

with the security authorization mandate.

Enterprise Identity Management System (EIMS): $2.4 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 that borrowers face when they log in to FSA systems by using their social security 

number and PIN. EIMS will mitigate this security risk by requiring a username/password 

combination. EIMS will also improve interoperability between agencies using PIV credentials 

and improve partner communities’ interaction with FSA systems by consolidating multiple 

access logins, which will provide a consistent personal authentication while eliminating the use 

of a user’s social security number.
STUDENT AID ADMINISTRATION

AA-24

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 reports to DHS.

In fiscal year 2015, FSA will continue to link external systems into the Security Operation Center 

to evaluate threats to FSA networks and data.

Two-Factor Authentication: $1.6 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 direct interfaces with guaranty agencies, 

NFPs, TIVAS, and Payment Collection Agencies and distributing tokens to Foreign and 

Domestic Postsecondary Schools and partner financial institutions.

FSA will use these funds to implement soft tokens as the second authentication mechanism. 

Soft tokens cost less and are easier to maintain than physical tokens. FSA will replace the 

physical tokens as they reach the end of their life with soft tokens. These funds will continue to 

support operations and maintenance of this service and help desk support.

Trusted Internet Connection (TIC): $1.2 million

FSA works with the Department’s Chief Information Officer (CIO) to consolidate ED’s Internet 

connections and comply with the OMB mandate to implement a TIC initiative. The Internet 

connection consolidation will reduce external access points and allow for the standardization of 

monitoring devices and easier identification of potentially malicious traffic. Compliance is 

monitored by DHS. 

In fiscal year 2013, FSA routed the first external system, COD, through the TIC. By the end of 

fiscal year 2015, the four TIVAS servicing systems’ Internet connections will be routed through 

the TIC. The fiscal year 2015 request will support the routing of these external systems. 

Internet Protocol version 6 (IPv6): $0.4 million

In order to comply with the Federal CIO memorandum on IPv6, FSA needs to upgrade internal 

client applications that communicate with public Internet servers and support enterprise 

networks to operationally use IPv6 by the end of fiscal year 2014. FSA will also ensure that 

procurements of IT networks comply with the Federal Acquisition Regulation requirements for 

use of IPv6 capabilities. This transition will accommodate more IP addresses and improve 

network efficiency and security. Enhancing the network from IPv4 will support the increase of 

public devices connecting to FSA systems, including smartphones, tablets, and personal 

computers. The migration to IPv6 will ensure uninterrupted service for users who have an 

updated IPv6 Web address.
STUDENT AID ADMINISTRATION

AA-25

Other – $45.7 million

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

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

Web site interfaces and contract specialist support.

System Application Matrix

The two system matrixes, shown on page AA-26, illustrate the interdependencies between the 

major student aid system applications for the core business functions and the end user. The 

first chart shows each system application, its projected costs for 2014 and 2015, and core 

business functions supported by each application. The second chart shows the 

interdependencies between all applications and the four users—school, students, financial 

partners, and the Department.
STUDENT AID ADMINISTRATION

AA-26

System Applications and Core Business Functions Interdependencies

System Application

2014 Cost

(dollars in 

millions)

2015 Cost

(dollars in 

millions)

Student Aid 

Application 

Processing

Origination 

and 

Disbursement

Student 

Loan 

Servicing

CSB, TIVAS, DMCS, and 

Perkins Loan Servicing; 

Development; and Customer 

Surveys $502.7 1 $771.7 1 No X X

Common Origination and 

Disbursement 109.6 2 129.7 2 X X X

Front End Business 

Integration and FAFSA 

Operations 82.2 2 73.1 2 X X No

Virtual Data Center 56.9 2 64.0 2 X X X

Enterprise Software 

Licenses 22.9 24.7 X X X

National Student Loan Data 

System 24.2 2 3 13.8 X X X

Financial Management 

System 6.7 7.5 No X

Integrated Partner 

Management 11.0 7.1 No X X

Total Discretionary Costs 816.2 1,091.6 No No No

1 Amount reflects only discretionary request. In FY 2014, $226.9 in million mandatory budget authority was used 

for loan servicing.

2 Amount includes recompete efforts. 3 Amount includes $9 million for the NSLDS system upgrades.

Systems Applications and End Users

System Application School Student

Financial 

Partners 

Department 

of Education

CSB, TIVAS, new NFP Servicers, and 

DMCS 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.
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-27

Major SAA Contracts

The following table lists Student Aid Administration contracts estimated to exceed $5 million in 

fiscal year 2015.

Student Aid Contracts Projected to Exceed $5 Million in FY 2015

(dollars in millions)

*denotes vendor headquarters for loan servicers

Contract Description Vendor Vendor Location

FY 2014

Funding

FY 2015

Funding

CSB Servicing and 

consolidation of 

direct student 

loans, servicing 

FFEL loans, and 

collection of 

defaulted loans.

Xerox Germantown, MD*

Coralville, IA

Lawrence, KS

Louisville, KY

Utica, NY

 $61.21 0.0

TIVAS Servicing of direct 

student loans and

servicing of FFEL 

loans.

AES/PHEAA Harrisburg, PA*

Chester, PA

Mechanicsburg, 

PA

State College, PA

$254.1 1 $624.7 1

Great Lakes 

Education 

Loan 

Services Inc.

Madison, WI*

Aberdeen, SD

Boscobel, WI

Eau Claire, WI

Rocky Hill, CT

Nelnet 

Servicing 

LLC

Lincoln, NE*

Aurora, CO

Highlands Ranch, 

CO

Albany, NY

Sallie Mae 

Corporation

Newark, DE*

Fishers, IN

Indianapolis, IN

Reston, VA 

Wilkes-Barre, PA

1 Amount reflects discretionary request. In fiscal year 2014, $226.9 million in mandatory budget authority was 

used for loan servicing.
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-28

Student Aid Contracts Projected to Exceed $5 Million in FY 2015

(dollars in millions)

(Continued)

*denotes vendor headquarters

Contract Description Vendor Vendor Location

FY 2014

Funding

FY 2015

Funding

New NFP 

Servicers

Servicing of direct 

student loans and

servicing of FFEL 

loans.

Missouri 

Higher 

Education 

Loan 

Authority

Chesterfield, MO* $80.6 $69.6 1

ESA/

Edfinancial

Knoxville, TN

Aspire 

Resources 

Inc.

West Des Moines, 

IA

Cornerstone Salt Lake City, UT

New 

Hampshire 

Higher 

Education 

Corporation

Concord, NH*

Oklahoma 

Student 

Loan 

Authority

Oklahoma City, OK

Vermont 

Student 

Assistance 

Corporation

Winooski, VT

1 Amount reflects discretionary request. In fiscal year 2014, $226.9 million in mandatory budget authority was 

used for loan servicing.
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-29

Student Aid Contracts Projected to Exceed $5 Million in FY 2015

(dollars in millions)

(Continued)

*denotes vendor headquarters

Contract Description Vendor Vendor Location

FY 2014

Funding

FY 2015 

Funding

Common 

Origination and 

Disbursement

Disbursement of 

Pell Grants and 

Direct Loans.

Accenture 

LLP

Phoenix, AZ

Alexandria, VA

Arlington, VA

Bloomfield, CT

Bozeman, MT

Buffalo, NY

Cincinnati, OH

Columbus, GA

Herndon, VA

Lawrence, KS

Monticello, KY

Montgomery, AL

North 

Tonawanda, NY

Phenix City, AL

Philadelphia, PA

San Antonio, TX

Utica, NY

Washington, DC

$109.6 $129.7

Front-End 

Business 

Integration

Integration of 

application 

processing, aid 

awareness, and 

eligibility 

determination.

Vangent Inc. Fairfax, VA

Alexandria, VA

Arlington, VA

Coralville, IA

Herndon, VA

Las Cruces, NM

Lawrence, KS

Phoenix, AZ

Rockville, MD

Washington, DC

$82.2 $73.1
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-30

Student Aid Contracts Projected to Exceed $5 Million in FY 2015

(dollars in millions)

(Continued)

*denotes vendor headquarters

Contract Description Vendor Vendor Location

FY 2014

Funding

FY 2015 

Funding

Virtual Data 

Center

Data center for 

student financial 

aid systems.

Perot 

Systems

Plano, TX

Ashburn, VA

Fairfax, VA

Herndon, VA

$56.9 $64.0 

Enterprise 

Software 

Licensing

Maintenance for 

software licenses 

for Financial 

Management 

System and 

database 

operations.

Various Various $22.9 $24.7

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 

Alexandria, VA

Arlington, VA

Coralville, IA

Herndon, VA

Venice, FL

$24.2 2 $13.8

Financial 

Management 

System

Accounting system 

for FSA 

transactions.

Avineon, Inc. Washington, DC

Lawrence, KS

Alexandria, VA

Herndon, VA

$6.7 $7.5

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. 

Washington, DC $11.0 $7.1

2 Amount includes $9 million for NSLDS system upgrades.
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-31

Student Aid Contracts Projected to Exceed $5 Million in FY 2015

(dollars in millions)

(Continued)

*denotes vendor headquarters

Contract Description Vendor Vendor Location

FY 2014

Funding

FY 2015 

Funding

Enterprise 

Information 

Technology 

Integration

Integration of 

operational data 

from multiple 

student aid 

systems to 

facilitate data 

exchange.

Phoenix 

Programming 

Services

Rockville, MD

Alexandria, VA

Herndon, VA

Kensington, MD

Lawrence, KS

$6.5 $6.0
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-32

Quarterly Customer Service Performance Results

New Not-For-Profit Servicers

June Score by Allocation Metric

1 The Department no longer contracts directly with this servicer. 2 American Customer Satisfaction Index (ACSI) scale of 0 to 100. 3 No borrowers were > 180 days delinquent at end of the prior quarter.

Servicers

METRIC

Aspire 

Resources Inc. COSTEP1 CornerStone

1 % of Borrowers in Current 

Repayment Status

93.15% 82.24% 90.99%

2 % of Borrowers > 90 Days 

Delinquent

3.43% 2.11% 5.54%

3 Resolution of Borrowers

Delinquent > 180 Days

14.56% 50.00% 6.19%

4 Borrower Survey2 72.00 69.00 71.00

5 Federal Personnel Survey2 73.00 60.00 76.00

Servicers

METRIC

Granite StateGSMRKSA 

Servicing1 MOHELA

1 % of Borrowers in Current 

Repayment Status

82.84% 72.16% 92.24%

2 % of Borrowers > 90 Days 

Delinquent

11.72% 20.11% 4.07%

3 Resolution of Borrowers

Delinquent > 180 Days

6.45% 14.43% 28.91%

4 Borrower Survey2 73.00 62.00 72.00

5 Federal Personnel Survey2 67.00 57.00 75.00

Servicers

METRIC

EDGEucation

Loans1 EdManage1

ESA/

Edfinancial

1 % of Borrowers in Current 

Repayment Status

81.30% 81.32% 90.10%

2 % of Borrowers > 90 Days 

Delinquent

1.76% 11.53% 5.50%

3 Resolution of Borrowers

Delinquent > 180 Days

N/A3 14.65% 10.48%

4 Borrower Survey2 64.00 65.00 69.00

5 Federal Personnel Survey2 61.00 58.00 71.00
STUDENT AID ADMINISTRATION

____________________________________________________________________________

AA-33

Quarterly Customer Service Performance Results

New Not-For-Profit Servicers 

(continued)

June Score by Allocation Metric

2 American Customer Satisfaction Index (ACSI) scale of 0 to 100. 3 No borrowers were > 180 days delinquent at end of the prior quarter

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/). 

Quarterly Customer Service Performance Results

Title IV Additional Servicers

June Score by Allocation Metric

2 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/). 

Servicers

METRIC OSLA

VSAC Federal 

Loans

1 % of Borrowers in Current Repayment 

Status

87.11% 80.11%

2 % of Borrowers > 90 Days Delinquent 6.82% 13.81%

3 Resolution of Borrowers Delinquent > 180 

Days

19.88% N/A3

4 Borrower Survey2 73.00 72.00

5 Federal Personnel Survey2 60.00 68.00

Servicers

METRIC

FedLoan 

Servicing 

(PHEAA) Great Lakes NelNet Sallie Mae

1 Defaulted Borrower 

Count 0.91% 1.11% 0.59% 0.54%

2 Defaulted Borrower 

Amount 0.52% 0.63% 0.35% 0.29%

3 Borrower Survey2 73.67 75.67 74.00 73.67

4 School Survey2 77.00 82.67 77.67 78.00

5 Federal Personnel 

Survey2 78.00 76.00 70.00 75.00
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Non-Federal Student Aid Support Activities

In addition, $95.8 million is allocated to departmental offices for central support activities, such 

as rent and central computer services, and for student-aid related activities managed by other 

Department offices, such as financial management systems operations and legal services 

provided by the Office of the General Counsel. The fiscal year 2015 request also includes costs 

of the College Scorecard in the Office of Postsecondary Education.

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

$20.8 million in fiscal year 2015, an increase from $8.5 million in fiscal year 2014. 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 2015, the same level as fiscal year 2014.

Combined funding for central computer services and telecommunications will total $21.9 million 

in fiscal year 2015, $0.4 million below the 2014 level.

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

$20.3 million in fiscal year 2015, a decrease of 3.7 million from $24.0 million, the fiscal year

2014 level. 

In addition to 1,229 FSA full-time staff, the fiscal year 2015 request also provides $13.3 million

for the salaries and benefits of 91 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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PROGRAM PERFORMANCE INFORMATION

Performance Measures

This section presents selected program performance information, including 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 the resources provided in previous years and those requested in fiscal year

2015 and future years, as well as the resources and efforts invested by those served by this 

program.

In December 2012, FSA released its strategic plan, “Federal Student Aid: Strategic Plan, Fiscal 

Years 2013-17.” FSA updated its five goals and performance indicators to measure the delivery 

of Federal student aid. Some indicators were in the previous strategic plan (Fiscal Years 

2012-2016) and had baselines and targets created in fiscal year 2010. 

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

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

Year Target Actual

2010 Baseline 49.5%

2011 >= 49.5% 52.0

2012 >=52.0 54.0o

2013 52.0 – 54.0 52.2

2014 No Lower than Prior Year

2015 No Lower than Prior Year

Additional Information: Following the unprecedented 33 percent growth in FAFSA application 

volume since 2009, FSA has focused on increasing FAFSA accessibility and ease of use. 

Although the recent increase in applications—the product of high unemployment—is unlikely to 

be repeated in the near term, the volume remains high at 21.8 million FAFSAs processed for the 

most recent full cycle of the award year 2012-13, an decrease of only 1 percent from the peak; 

similarly, year-to-date figures for 2013-14 stand at 16 million FAFSAs processed, a year-overyear decrease of just 3 percent. Demographics have also changed: since 2009, low income 

applicants have increased by 41 percent, first generation filers have increased by 31 percent, 

and adult learners have increased by nearly 39 percent. FSA has built and implemented 

various enhancements to the FAFSA process and conducted several outreach and engagement 

campaigns to improve the applicants’ experience.
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Measure: Proportion of first-time FAFSA filers among workforce ages 25+ with no college.

Year Target Actual

2010 Baseline 3.9%

2011 >=3.9% 3.8

2012 >=3.6 3.7%

2013 2.8 - 3.4 3.3

2014 No Lower than Prior Year

2015 No Lower than Prior Year

Additional Information: FSA met this metric by achieving an actual result of 3.3 percent. This 

metric peaked at 3.9 percent in award cycle 2009–10 when the unemployment rate rose 

sharply, and data analysis correctly projected that this segment would decrease as the economy 

improved. However, continued efforts to increase the number of older filers likely ensured that 

the FAFSA filings for this segment did not decrease further.

Measure: Proportion of first-time FAFSA filers among low-income students.

Year Target Actual

2011 Baseline 54.8%

2012 >=57.0% 60.3

2013 57.9 - 62.7 57.1

2014 No Lower than Prior Year

2015 No Lower than Prior Year

Additional information: This metric measures the effectiveness of FSA’s outreach in getting 

low-income students to file a FAFSA application for the first time. The baseline was set in fiscal 

year 2011 and FSA’s target is to maintain or increase these percentages each year. FSA did 

not meet its target for this performance metric for fiscal year 2013. This may be due, in part, to 

economic variables; in that, the historic volume of completed FAFSAs in prior years may have 

represented a peak correlated with an unusually weak economy and may be unlikely to repeat

in the near future.
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Measure: Proportion of first-time FAFSA filers ages 19-24 among those in the population who 

are high school graduates with no college.

Year Target Actual

2011 Baseline 27.0%

2012 >=27.0% 28.4No

2013 26.0 - 28.0 27.1

2014 No Lower than Prior Year

2015 No Lower than Prior Year

Additional information: FSA met its target for this performance metric, with approximately 

27.1 percent of the target population submitting FAFSAs during the 2012–13 application cycle 

(January 2012 through June 2013). This is a substantial increase from the 2008–09 application 

cycle, when just 22 percent of this population filed FAFSAs for the first time.

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

lifecycle (1-100 Scale).

Year Target Actual

2010 Baseline 74.0

2011 74.0 78.0

2012 78.0 78.5

2013 78.0 78.4

2014 78.0

2015 78.0

Note: Customer Satisfaction Scores for the Entire Life Cycle are based upon ACSI scores from the application, 

in-school, and servicing experiences of students and borrowers. Data is 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.

Additional Information: To measure overall customer satisfaction level, FSA calculates a 

weighted score based on the ACSI surveys of applicants, students in school, and borrowers in 

repayment. This metric measures how FSA is simplifying its information. FSA continues to 

improve the aggregate ACSI score yearly, and has done so for 3 of the past 4 years. 
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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

2011 Baseline 72.0

2012 >=72.0 74.0

2013 74.0 74.0

2014 No Lower than Prior Year

2015 No Lower than Prior Year

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 its partners can easily access the information they need, FSA 

conducts a quarterly survey with postsecondary institutions and partners 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. FSA met its goal in both fiscal years 2012 and 

2013.

Measure: Percent of borrowers >90 days delinquent.

Year Target Actual

2011 Baseline 9.9%

2012 <=10.0% 9.5No

2013 <=10.0 8.3

2014 No Higher than Prior Year

2015 No Higher than Prior Year

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).

Additional information: FSA exceeded its goal in fiscal years 2012 and 2013. 
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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

2011 Baseline $9.89

2012 $10.90 10.85No

2013 11.23 11.16

2014 Expect increase

2015 Expect increase

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.

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

efficiency and effectiveness of the student aid lifecycle. The first is the Aid Delivery Cost per 

Application measure. Throughout that year, FSA improved aid delivery by automating and 

simplifying processes such as simplifying the FAFSA application to make it easier to navigate 

and complete. The calculated unit cost for aid delivery in fiscal year 2013 is $11.16. This unit 

cost reflects data for the four fiscal quarters ending June 30, 2013 (2012/Quarter 4 through 

2013/Quarter 3), because the full fiscal year 2013 unit costs are not yet available. The unit cost 

for FAFSAs may increase as FSA refines specific cost assignment methodologies.

Measure: Loan Servicing Cost per Borrower.

Year Target Actual

2011 Baseline $18.15

2012 $19.64 18.49o

2013 21.02 21.42

2014 Expect increase

2015 Expect increase

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 costs for servicing in the year ending June 30, divided 

by the average number of borrowers in servicing for the year. 

Additional information: The second measure is the Loan Servicing Cost per Borrower. This 

unit cost tracks the overall costs of loan servicing operations and maintenance, including labor, 

non-labor, and contracts. The fiscal year 2013 Loan Servicing measure experienced a slightly 
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higher than targeted unit cost primarily due to the continuation of low volumes in Common 

Services for Borrowers (CSB) past the December 2012 TIVAS transition deadline. The 

decreased borrower account volumes generally incurred higher rates under the contract tiered 

pricing schedule.

Goal: Ensure program integrity and safeguard taxpayers’ interest

Measure: Direct Loan Default Rate.

Year Target Actual

2010 Baseline 12.2%

2011 <=12.2% 11.3

2012 <=11.3 9.6No

2013 9.8 9.8

2014 No Higher than Prior Year

2015 No Higher than Prior Year

Note: The default rate is defined as the average balance of loans serviced by FSA that are 270 days or more past 

due and loans serviced in debt collection during the year, divided by the average balance of loans serviced by FSA 

(does not include in-school or in-grace loan statuses).

Additional Information: For the third year in a row, FSA met or exceeded the Direct Loan 

default rate performance metric. The Direct Loan portfolio includes all unpaid accounts in the 

default collection system since the program began, as well as recent defaults that are 

delinquent more than 270 days. Loans are never charged off and are rarely discharged in a 

bankruptcy. FSA will continue to pursue collections through its loan servicers and collection 

agencies by using tools such as wage garnishment and IRS offset. 

Measure: Collection Rate.

Year Target Actual

2010

2011

2012 $31.90

2013 $34.31 $41.57

2014 TBD

2015 TBD

Note: In fiscal year 2012 there was no target established for this measure.

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

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

The baseline for this new metric is $34.31, and FSA exceeded this target with a rate of $41.57, 

collecting $7.26 more from each borrower than the target collection amount. This represents a 

30 percent improvement from the prior year.

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

places to work in the Federal Government.

Measure: FSA Morale Index (Subset of Questions from Government-wide Employee Viewpoint 

Survey) - Percentage of positive responses to survey.

Year Target Actual

2011 Baseline 58%

2012 >=58% 58

2013 57 57

2014 No Lower than Prior Year

2015 No Lower than Prior Year

Additional Information: The FSA Morale Index was developed from a subset of seven 

Employee Viewpoint Survey (EVS) questions that address issues of concern to employees. 

FSA will focus its “First Class” employee engagement program objectives to match areas of 

concerns identified in the EVS. 
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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

Conference and

Outreach Services

Team

Communications

And Info Resources

Team