ANNUAL REPORT FY 2020
United States Department of Education

Betsy DeVos

Secretary

Federal Student Aid

Mark A. Brown

Chief Operating Officer

Finance Office

Alison L. Doone

Chief Financial Officer

November 16, 2020

This report is in the public domain. Authorization to reproduce it, in whole, or in part, is granted.

While permission to reprint this publication is not necessary, the citation should be:

U.S. Department of Education, Federal Student Aid, FY 2020 Annual Report, Washington, D.C., 

20002.

This report is also available under Performance Reports on the Federal Student Aid website at 

StudentAid.gov. 

To connect to Federal Student Aid through social media, please visit the Federal Student Aid 

website at StudentAid.gov or on Twitter at @FAFSA. 

Federal Student Aid strives to improve and enhance the content quality, report layout, and 

public accessibility of the Annual Report. Suggestions on how this report can be made more 

informative and useful are welcome. The public and other stakeholders are encouraged to 

submit all questions and comments to AFRComments@ed.gov.
Fiscal Year 2020 Annual Report | Federal Student Aid i

Contents 

Contents

About This Report ............................................................. iii

About This Report.......................................................................... v

Overview of the Federal Student Aid Annual Report ....................vii

Letter from the Chief Operating Officer of Federal 

Student Aid....................................................................... ix

Letter from the Chief Operating Officer of Federal Student Aid ....xi

Management’s Discussion and Analysis (Unaudited) ......... 1

Overview of Management’s Discussion and Analysis ..................... 3

Fiscal Year 2020 Organizational Highlights ................................... 4

Looking Forward at Federal Student Aid .............................................................. 4

Federal Student Aid Fiscal Year 2020 by the Numbers........................................... 7

Mission and Organizational Structure............................................ 9

Mission, Vision, and Core Values ...................................................................... 10

FSA Organizational Structure ........................................................................... 11

Significant Legislation that Directs the Federal Student Aid Mission....................... 13

Federal Student Aid Stakeholders..................................................................... 14

Federal Student Financial Aid Programs............................................................. 16

Performance Management...........................................................21

Agency Priority Goals...................................................................................... 28

Quality of Performance Data............................................................................ 31

Analysis of Financial Statements.................................................32

Introduction .................................................................................................. 32

Balance Sheet................................................................................................ 34

Financial Management Highlights ..................................................................... 49

Analysis of Systems, Controls, and Legal Compliance..................50

Annual Performance Report (Unaudited) .........................53

Overview of the Annual Performance Report...............................55

Introduction to the Annual Performance Report..........................56

Federal Student Aid Strategic Goals, Performance Metrics, and Results ................. 58
ii Fiscal Year 2020 Annual Report | Federal Student Aid

Contents 

Performance Results by Strategic Goal........................................63

Strategic Goal 1: Empower a High-Performing Organization................................. 64

Strategic Goal 2: Provide World-Class Customer Experience to the Students, 

Parents, and Borrowers We Serve .................................................................... 72

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness ......... 92

Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards........ 103

Strategic Goal 5: Enhance the Management and Transparency of the Portfolio..... 111

Fiscal Year 2020 Accomplishments of Federal Student Aid........137

Legislative and Regulatory Recommendations ..........................142

Annual Bonus Awards................................................................143

Report of the Federal Student Aid Ombudsman.........................144

Financial Section............................................................165

Overview of the Financial Section .............................................167

Financial Statements................................................................. 168

Consolidated Balance Sheet........................................................................... 169

Consolidated Statements of Net Cost.............................................................. 170

Consolidated Statements of Changes in Net Position......................................... 171

Combined Statements of Budgetary Resources ................................................ 172

Notes to the Financial Statements.............................................173

Required Supplementary Information (Unaudited) ...................210

Independent Auditors’ Report ...................................................217

Office of Inspector General Audit Transmittal................................................... 217

Independent Auditors’ Report ........................................................................ 219

Other Information (Unaudited)......................................233

Other Information .....................................................................235

Summary of Financial Statement Audit and Management Assurances ................. 235

FSA Management Challenges ......................................................................... 235

Payment Integrity ........................................................................................ 236

Appendices ....................................................................237

Appendix A: Discontinued Strategic Goals and Performance 

Metrics ......................................................................................239

Appendix B: Glossary of Acronyms and Terms...........................241

Appendix C: Availability of the Federal Student Aid Annual 

Report .......................................................................................247
Fiscal Year 2020 Annual Report | Federal Student Aid iii

Contents 

About This Report
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Contents 

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Fiscal Year 2020 Annual Report | Federal Student Aid v

Contents 

About This Report

Federal Student Aid (FSA), a principal office of the United States (U.S.) Department of 

Education (the Department), is required by legislation to produce an Annual Report, which 

details the organization’s fiscal year financial and program performance. The Federal Student 

Aid FY 2020 Annual Report (Annual Report) is a comprehensive document that provides an 

analysis of FSA’s financial and program performance results for Fiscal Year (FY) 2020 and 

exhibits the organization’s effectiveness in accomplishing its mission. The Annual Report

enables the President of the United States, the U.S. Congress (Congress), and the public to 

assess the organization’s performance relative to its mission and determine whether FSA has 

demonstrated accountability for the resources entrusted to it.

This report presents information about FSA’s performance as a Performance-Based 

Organization (PBO), its initiatives, accomplishments, and challenges, as required by the U.S.

Office of Management and Budget (OMB) Circular A-11, Preparation, Submission and 

Execution of the Budget, Part 6, Section 260, and Circular A-136, Financial Reporting 

Requirements. The report also satisfies the requirements included in the following federal 

statutes:

• Higher Education Act of 1965, as amended

• Federal Managers’ Financial Integrity Act of 1982

• Chief Financial Officers Act of 1990

• Government Performance and Results Act of 1993

• Government Management Reform Act of 1994

• Federal Financial Management Improvement Act of 1996

• Reports Consolidation Act of 2000

• Improper Payments Information Act of 2002, amended

• Government Performance and Results Modernization Act of 2010

• Improper Payments Elimination and Recovery Act of 2010

• Improper Payments Elimination and Recovery Improvement Act of 2012

The Department produces the U.S. Department of Education FY 2020 Agency Financial 

Report (AFR). That report provides a comprehensive view of the Department’s stewardship 

over its resources and includes a summary of the information contained in the Annual Report. 

The Annual Report is available at StudentAid.gov/Annual Report.
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Contents 

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Fiscal Year 2020 Annual Report | Federal Student Aid vii

Overview of the Federal Student Aid Annual Report 

Overview of the Federal Student Aid Annual Report

The Annual Report is organized into the following five sections: 

Management’s Discussion and Analysis

Management’s Discussion and Analysis provides an overview of the 

Annual Report. It includes a discussion of the FSA mission, its 

organizational structure, and the fiscal year financial and performance 

highlights. The section concludes with a discussion of FSA’s systems, 

controls, and compliance with laws and regulations.

Annual Performance Report

The Annual Performance Report section presents the strategic goals 

included in the Federal Student Aid Strategic Plan for Fiscal Years 

2015–19 (FY 2015–19 Strategic Plan) and the draft Federal Student 

Aid Five-Year Strategic Plan for Fiscal Years 2020–24 (FY 2020–24 

Strategic Plan). This section also includes a crosswalk between both 

strategic plans, and a discussion of the results of the performance 

metrics under each strategic goal. The section concludes with FSA’s 

fiscal year accomplishments, its legislative and regulatory 

recommendations to the Department, the Annual Bonus Awards, and 

the Report of the Federal Student Aid Ombudsman.

Financial Section

The Financial Section provides a detailed view of FSA’s stewardship 

and accountability for its resources. The audited financial statements

begin the section, followed by the accompanying Notes to the Financial 

Statements, Required Supplementary Information, and the 

Independent Auditors’ Report.

Other Information

Other Information includes a summary of the Financial Statement 

Audit, links to the Summary of Management Assurances, and FSA’s

Management Challenges included in the AFR.

Appendices

The Appendices include Appendix A, which provides the discontinued 

strategic goals and performance metrics; Appendix B, which lists the 

acronyms cited throughout the report; and Appendix C, which provides 

information on the availability of the Annual Report.
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Overview of the Federal Student Aid Annual Report 

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Fiscal Year 2020 Annual Report | Federal Student Aid ix

Letter from the Chief Operating Officer of Federal Student Aid 

Letter from the Chief Operating Officer of Federal 

Student Aid
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Letter from the Chief Operating Officer of Federal Student Aid 

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Fiscal Year 2020 Annual Report | Federal Student Aid xi

Letter from the Chief Operating Officer of Federal Student Aid 

Letter from the Chief Operating Officer of Federal 

Student Aid

Dear Federal Student Aid Colleagues, Partners, and Customers:

I am pleased to present the 

Fiscal Year (FY) 2020 Annual Report that 

highlights the outstanding work and 

accomplishments of the entire Federal Student 

Aid (FSA) organization. This report tells the story 

of our substantial work to improve the quality of 

service to customers, foster collaboration among 

stakeholders, improve operational efficiency and 

flexibility, and invest in our internal and expanded 

workforce capability.

This report reflects the spirit of our mission—

Keeping the Promise: Funding America’s Future, 

One Student at a Time—which is ingrained in the 

Higher Education Act of 1965, as amended. For 

55 years, the ideals framing this law have guided 

the United States (U.S.) Department of Education 

in facilitating broad access to higher education 

and enabled FSA’s evolution to execute that critical task.

While broadening access to higher education remains integral to our mission, we are cognizant 

of, and concerned about, the size of the federal student loan portfolio, which now exceeds 

$1.5 trillion. Management of such a vast portfolio requires steady leadership, active 

stewardship, and transparency. Through internal portfolio analytics and feedback from our 

customers and other stakeholders, we recognize the need for improvement and are working to 

improve our programs, products, services, and operations.

During FY 2020, FSA provided more than $115 billion in federal grants, loans, and work-study 

funds to approximately 10.8 million students at more than 5,600 participating postsecondary 

schools. We fulfilled our mission even as we addressed the challenges of the global 

Coronavirus Disease 2019 (COVID-19) emergency. 

In FY 2020, our challenges became opportunities, especially as more than 1,400 FSA 

employees in 11 offices across the United States deftly transitioned to a 100 percent virtual 

work posture. Organizational productivity remained high over the past year as employees went 

from packing in crowded conference rooms to gathering in virtual meetings. PowerPoint slides 

on big screens suddenly transitioned to screensharing and virtual whiteboards, and FSA shifted 

resources and assistance online to serve students, families, and partner institutions.

Working closely with our federal student loan partners, we made sure student loan servicers 

were compliant with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

student loan relief provisions that suspended loan payments and temporarily set the interest 

rate on all Department-held loans to zero percent. FSA notified employers to stop wage 

Mark A. Brown

Chief Operating Officer
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Letter from the Chief Operating Officer of Federal Student Aid 

garnishments, and when some employers continued to garnish wages, we worked with the U.S.

Department of Treasury to get those wages refunded quickly, expediting more than 2 million 

Treasury Offset Program/Administrative Wage Garnishment refund payments. And, we 

developed resources, such as the StudentAid.gov/coronavirus webpage, that provided 

customers with vital information. 

In FY 2020, FSA reached new heights in customer service, an improved user experience, 

proactive partner engagement, and streamlined organizational capabilities. This success was 

largely due to the innovative planning and work undertaken over the past decade by current and 

former FSA employees. We have long had in our sights the goals of transforming FSA’s 

technology infrastructure and data processing environments, implementing a world-class user 

experience, strengthening our partnership with schools, and enhancing our oversight of 

vendors.

The Next Gen FSA initiative delivered intuitive, self-service tools for students, parents, and 

borrowers. The new StudentAid.gov—FSA’s primary website for customers—consolidated the 

four most-visited websites into one and has steadily added information, tools, and resources 

that offer personalized guidance about federal student aid. These tools include the Annual 

Student Loan Acknowledgment, which is designed to help borrowers understand their debt 

balance—including their lifetime maximums—before borrowing more money. The tools will also 

help ensure borrowers understand common debt terms. Students who have received grants will 

also see how much they have received and how much eligibility they have left. In a little more 

than 5 months, more than 858,000 customers have completed the acknowledgment.

The Aid Summary dashboard gives customers personalized information about loans and grants 

they have received. For borrowers who have filed an Employment Certification Form to 

determine their eligibility for Public Service Loan Forgiveness, the Aid Summary dashboard 

provides them with a count of their qualifying payments. The Make a Payment pilot allows a 

subset of FSA customers—between five and seven million people—to make a payment on the 

StudentAid.gov website or through their mobile device. Part of the Next Gen FSA roadmap will 

eventually allow all federal student loan borrowers to do so.

Another tool on StudentAid.gov, Loan Simulator, walks students and parents through a guided, 

easy-to-use wizard that allows them to “test-drive” and compare personalized scenarios, using 

their own student debt data. This tool helps students set repayment goals and develop informed 

financial strategies.

Customers can now access all our contact centers through one phone number: 1-800-4-FEDAID. This number includes a new interactive voice response functionality to direct our customers 

to the appropriate place so they can get help fast. FSA’s virtual assistant—AidanSM—uses 

artificial intelligence to answer more than 3,000 variations of common questions about federal 

student aid. Available to a subset of FSA customers in the first year of its pilot rollout, Aidan 

responded to more than 1.3 million messages from nearly 546,000 customers. 

Once FSA brings its online Business Process Operations (BPO) vendors, customers will benefit 

greatly from centralized contact center support. In FY 2020, FSA awarded Next Gen FSA 

contracts to five companies for services that include corresponding with customers and partners 

via phone, chat, social media, postal mail, and email, as well as supporting the back-office 

processing associated with those contacts. FSA will provide comprehensive contact center 
Fiscal Year 2020 Annual Report | Federal Student Aid xiii

Letter from the Chief Operating Officer of Federal Student Aid 

training and oversight, ensuring that BPO vendors have up-to-date knowledge about federal 

student aid programs to give customers the right answer in every interaction.

FSA strives to be the most-trusted source of information about federal student aid. That includes 

building trust and collaboration among stakeholders and partners by promoting transparency, 

accountability, and proactive assistance. FSA closed 96 percent of outstanding Freedom of 

Information Act requests in FY 2020 and adjudicated approximately 150,000 borrower defense 

applications.

FSA recognizes that by providing proactive technical assistance to postsecondary institutions, 

schools can administer the federal student aid programs more effectively. In FY 2020, we 

fulfilled our oversight responsibilities by resolving more than 3,000 deficient audits and flagged 

financial statements, evaluating more than 2,000 school financial responsibility notifications, and 

processing 5,500 eligibility-related actions, including recertification applications. Additionally, 

FSA has reduced the number of outstanding Program Reviews. In FY 2020, we issued more 

than 240 Program Review Reports and Final Program Review Determinations to institutions and 

third-party servicers subjected to a program review. 

Through the Project Success program, FSA collaborated with guaranty agencies to improve

retention, graduation, and cohort default rates at more than 160 minority-serving institutions. At 

no cost to participating schools, the program provides tools, programs, and other resources for 

students to increase their financial literacy and help them achieve their higher education goals. 

Project Success has been extended through September 2022.

During FY 2020, FSA developed a draft FY 2020–24 Strategic Plan, our organization’s road 

map for improving our programs, products, services, and operations. The draft plan fully reflects 

our work to support customers and partners in every possible way, aggressively advance the 

Next Gen journey, and meet new and existing requirements.

I invite you to look back on all that our organization achieved in FY 2020, and I encourage you 

to look ahead to the opportunities that await us for our nation’s students and their families.

Sincerely,

Mark A. Brown

Chief Operating Officer

Federal Student Aid

United States Department of Education

November 16, 2020
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Fiscal Year 2020 Annual Report | Federal Student Aid 1

Overview of Management’s Discussion and Analysis 

Management’s Discussion and Analysis

(Unaudited)
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Management’s Discussion and Analysis (Unaudited) 

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Overview of Management’s Discussion and Analysis 

Overview of Management’s Discussion and Analysis

Management’s Discussion and Analysis provides an overview of the Annual Report. It includes 

the following subsections: 

• Fiscal Year 2020 Organizational Highlights: Fiscal Year 2020 Organizational 

Highlights presents Looking Forward at Federal Student Aid, which details the most 

important events and challenges that FSA faces and discusses the actions taken and 

progress made by FSA in addressing those challenges. This subsection also includes a 

presentation of FSA by the Numbers. 

• Mission and Organizational Structure: Mission and Organizational Structure provides 

the history of FSA; its mission, vision, and core values; as well as its organizational 

structure. The section also includes a discussion of the federal student aid programs.

• Performance Management: Performance Management presents an overview of FSA’s 

strategic and performance-planning framework, an overview of its draft FY 2020–24

Strategic Plan, the close-out details of its FY 2015–19 Strategic Plan, and a crosswalk 

between both strategic plans. This subsection concludes with a discussion of the annual 

priority goals and the quality of FSA’s performance data.

• Analysis of Financial Statements: Analysis of Financial Statements provides an 

overview of FSA’s financial data, an analysis of the financial data presented in the 

audited financial statements, and a discussion of FSA’s financial management

highlights. 

• Analysis of Systems, Controls, and Legal Compliance: Analysis of Systems, 

Controls, and Legal Compliance provides FSA’s management assessment in 

conjunction with the Department’s assessment on FSA’s internal controls related to the 

Federal Manager’s Financial Integrity Act of 1982 and its compliance with other laws and 

regulations related to the compliance of financial systems with federal requirements.
4 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Highlights

Fiscal Year 2020 Organizational Highlights

Looking Forward at Federal Student Aid

A major step forward for FSA in FY 2021 will be the publication of the FY 2020–24 Strategic 

Plan. The FY 2020–24 Strategic Plan will serve as the roadmap for FSA to meet existing and 

new requirements, operationalize the Next Generation Financial Services Environment (Next 

Gen FSA) initiative—the technical infrastructure designed to improve the customer and partner 

experience while streamlining FSA's existing operations—and support millions of customers in 

pursuit of their educational dreams. The goals and objectives within the plan will help FSA meet 

the deliverables it established to improve customer service and transform the loan servicing 

programs for students, parents, borrowers, institutions, and taxpayers.

FY 2020 has offered many lessons, and perhaps, the most important is that to effectively 

operate in the 21st century, FSA must be able to respond quickly to its customers’ needs and

adapt to major shifts in public policy. The Coronavirus Disease 2019 (COVID-19) global 

pandemic changed the landscape of higher education and heightened the need for FSA to be 

responsive to students, parents, borrowers, institutions, and other higher education 

stakeholders. In response to the pandemic, FSA increased its commitment to customer service, 

continued its Next Gen FSA journey to an improved digital environment, and worked to instill a

stronger culture of accountability with student loan servicers.

To fulfill its commitment during the COVID-19 emergency, FSA collaborated with its student 

loan servicers and other vendors to quickly execute the student loan relief provisions found in 

the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These provisions

suspended payments on Department-held loans and temporarily set the interest rates for loans 

held by the Department to 0 percent. Although the CARES Act flexibilities expired at the end of 

FY 2020, presidential action extended the benefits through December 31, 2020. To this end, 

FSA is committed to safeguarding the careful implementation of all present and future COVID19 emergency relief efforts for students and families.

In conjunction with executing the FY 2020–24 Strategic Plan and managing the extended 

COVID-19 student loan provisions, FSA will continue to advance the momentum gained in 

FY 2020. The focus for FY 2021 and beyond is to further deliver on the promise of Next Gen 

FSA. As discussed, Next Gen FSA already is transforming the experience of learning about, 

applying for, receiving, and repaying federal student aid for millions of students, parents, and 

borrowers. In FY 2021, Next Gen FSA will improve the experience of customers and partners–

including more than 5,600 postsecondary institutions–by:

• Expanding the availability of FSA’s virtual assistant, AidanSM, which uses artificial

intelligence and natural language processing to answer common questions from

customers about federal student aid,

• Enhancing the StudentAid.gov website inclusive of updates with new and existing

features (Aid Summary, Loan Simulator, and Make a Payment Pilot), which provide

personalized information and tools that help customers make more informed decisions

and manage their loans,
Fiscal Year 2020 Annual Report | Federal Student Aid 5

Fiscal Year 2020 Organizational Highlights

• Improving the Public Service Loan Forgiveness (PSLF) Help Tool to assist borrowers

with updated information about qualifying employers,

• Modernizing infrastructure systems and every aspect of how federal student aid is

delivered and monitored,

• Executing further enrichments to the myStudentAid mobile app which places financial

aid information and services at the customers’ fingertips,

• Implementing planning for the Next Generation Partner Participation and Oversight (Next

Gen PPO) program to transform the way FSA interacts with the thousands of schools,

financial institutions, and other partners by creating a single portal, FSA Partner

Connect, through which institutions can access FSA systems and processes,

streamlining processes for submitting and reviewing program participation and other

eligibility materials, and improving FSA workflow tools to support faster decision-making,

and

• Improving loan servicing throughout the student aid lifecycle by the appropriate

solicitation and acquisition of contracts. Specifically, the contracts will perform the

following:

o Create a state-of-the-art, enterprise-wide core processing capability for new

customers.

o Provide a transitional core processing system to house the legacy portfolio of more

than 35 million borrowers.

o Identify multiple vendors to staff and operate call centers, and manage manual

processing associated with customers transitioned to a new loan servicing platform.

As FSA works to modernize its organization through the acquisition of tools and services using 

contract vehicles, there are two areas on which it will not compromise. First, FSA will remain 

good stewards of taxpayer dollars and will not pay more than a fair price for services from any 

vendor. And second, because FSA will not provide customers with anything less than an

exceptional experience and exceptional service, vendors’ performance will be measured in an 

objective manner through service-level agreements. These agreements will hold vendors to high 

operational standards for their service to customers.

To assist in executing in all these areas, and in compliance with the Further Consolidated 

Appropriations Act, 2020, FSA also has developed a Next Gen FSA Strategic Plan. Although 

Next Gen FSA is embedded within the FY 2020–24 Strategic Plan, the Next Gen FSA Strategic 

Plan includes the subset of goals and objectives focused on the deliverables of this specific 

initiative. The Next Gen FSA Strategic Plan describes the FSA vision and introduces the Next 

Gen FSA Strategic Roadmap, which details how Next Gen FSA will work toward an interim 

servicing solution to continue to meet servicing needs at reasonable costs while also enabling 

Next Gen FSA capabilities.

But financial aid begins with FSA’s flagship deliverable, and that is the Free Application for 

Federal Student Aid® (FAFSA®) form. For this reason, FSA will also continue to work toward 

improving not only access to the FAFSA form, but also the ease of completing the application. 
6 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Highlights

By focusing on increasing customer knowledge about the form and the associated application 

periods, the Department will better assist students and families with understanding and 

accurately filling it out. In addition, in FY 2021, FSA will support FAFSA form simplification 

through technological enhancements such as the Data Retrieval Tool and through flexibilities 

provided to FSA through the Fostering Undergraduate Talent by Unlocking Resources for 

Education Act (FUTURE Act).

The timeline for implementation of the FUTURE Act is an iterative process and an important 

measure of FSA performance because the potential outcome of the associated changes will be 

beneficial to borrowers and stakeholders, visible in both the FAFSA form and other FSA 

services. FSA will continue to build out and develop the base infrastructure design to ensure 

effective and timely implementation. High-level designs have been completed and will assist in 

navigating implementation decisions throughout the fiscal year. 

Lastly, in the first half of 2020, FSA conducted a variety of exploratory research activities using

different methods of data collection and customer-based research. As work in this area moves 

forward, FSA plans to use enhanced customer analytics and information learned through 

improved exit counseling to suggest repayment strategies based on customers’ individualized 

goals, allowing customers to seamlessly enroll in repayment plans, easily establish recurring 

automatic payments, and feel confident in next steps toward successful repayment or loan 

forgiveness. FSA will proactively monitor borrower behavior in response to new borrower tools 

and resources, as well as environmental factors that may impact student loan repayment rates, 

then use predictive analysis to help guide students into and through loan repayment to reduce 

the number of delinquent or defaulted borrowers.
Fiscal Year 2020 Annual Report | Federal Student Aid 7

Fiscal Year 2020 Organizational Highlights

Federal Student Aid Fiscal Year 2020 by the Numbers

Figure 1: Federal Student Aid Net Outlays1

Fiscal Years 2016–20

Figure 2: Federal Student Aid Administrative Budget2

Fiscal Years 2016–20

Figure 3: Federal Student Aid Student Loan Portfolio3

Fiscal Years 2016–20

1 The Budgetary account is also known as the Program account; the Non-budgetary credit reform account is also known as the 

Financing account. For more information on these two accounts, please refer to Note 5.

2 Fiscal Year 2018 amount corrected from $1.5 to $1.7.

3 The amounts in Figure 3 include both lender-held FFEL loans and School-held Perkins loans.
8 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Highlights

Figure 4: Total FAFSA® Forms Processed and Total Students Receiving Aid

Fiscal Years 2016–20

Figure 5: Total Federal Student Aid Delivered

Fiscal Years 2016–20

Figure 6: Federal Student Aid Federal Employees4

Fiscal Years 2016–20

4 Number of employees listed is as of September 30 of each fiscal year.
Fiscal Year 2020 Annual Report | Federal Student Aid 9

Mission and Organizational Structure

Mission and Organizational Structure

FSA, a principal office of the Department, seeks to ensure that all eligible individuals can benefit 

from federal financial assistance for education beyond high school. As the nation’s largest 

provider of federal student financial aid, FSA is responsible for implementing and managing 

federal student financial assistance programs authorized under the Higher Education Act of 

1965, as amended (HEA). Specifically, Title IV of the HEA (Title IV) authorizes the federal 

student assistance programs for which FSA is responsible. These programs provide grants, 

loans, and work-study funds to students attending colleges or career and technical schools.

To execute the Title IV programs, FSA is responsible for a range of functions across the student 

aid lifecycle, which include: 

• Informing students and families about the availability of the federal student aid programs 

and the process of applying for and receiving aid from those programs, 

• Processing millions of FAFSA forms, 

• Accurately disbursing, reconciling, and accounting for billions of dollars of federal 

student aid funds delivered to students annually, 

• Managing the outstanding federal student loan portfolio and securing repayment from 

federal student loan borrowers, 

• Offering free assistance to students, parents, and borrowers throughout the entire 

financial aid process, and

• Providing oversight and monitoring of all program participants—schools, financial 

entities, and students—to ensure compliance with the laws, regulations, and policies 

governing the federal student aid programs.

This complex, multifaceted mission calls on a range of staff skills, and demands coordination by

all levels of management. Designated as a PBO by Congress in 1998, FSA emphasizes 

tangible results and efficient performance, as well as continuous improvement of the processes 

and systems that support its mission.
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Mission and Organizational Structure

Mission, Vision, and Core Values

FSA’s mission is student-focused. This mission drives the organization’s vision to be a reliable 

provider of federal student aid and services and to be the most trusted source of postsecondary 

education information to students and their families. As part of its vision, FSA strives to assist 

students and families in making better decisions about their postsecondary education funding 

options. The core values reflect a culture of integrity, excellence, and collaboration—key 

components in building a high-performing organization.

Table 1: FSA Mission, Vision, and Core Values

MISSION

Mission Keeping the Promise: Funding America’s Future, One 

Student at a Time.

VISION

Vision To be the most trusted and reliable source of student 

financial aid, information, and services in the nation.

CORE VALUES

Integrity Do the right thing above other interests and hold everyone 

accountable.

Customer Service Know what our customers want and ensure we meet their 

expectations.

Excellence Strive to be the very best in all we do by embracing a culture 

of continuous improvement.

Respect Value individuals by acknowledging the diversity of their 

contributions, ideas, and beliefs.

Stewardship Uphold the sacred trust of taxpayers as we work to support 

the goals of Congress and the Administration.

Teamwork Work in collaboration with our colleagues and partners to 

produce the best possible results.

As discussed in detail in the Performance Management section and Annual Performance 

Report, FSA has translated this vision into a set of clearly defined strategic goals and 

objectives, with related measurable performance metrics. The realization of these goals will 

enable the organization to accomplish its mission successfully.
Fiscal Year 2020 Annual Report | Federal Student Aid 11

Mission and Organizational Structure

FSA Organizational Structure

In FY 2020, FSA operated under a functional organizational structure that aligned the 

organization with its strategic drivers, business objectives, and mission goals. A Chief Operating 

Officer (COO) is appointed by the Secretary of Education (Secretary) to lead FSA. In 

March 2019, the Secretary appointed Mark A. Brown as the FSA COO. Figure 7 illustrates the 

functional organizations within FSA.

Figure 7: Federal Student Aid Organizational Chart

Fiscal Year 2020
12 Fiscal Year 2020 Annual Report | Federal Student Aid

Mission and Organizational Structure

During FY 2020, FSA operated on an annual administrative budget of approximately $1.8 billion. 

As of September 30, 2020, FSA was staffed by 1,462 full-time employees and augmented by 

contractors who provide outsourced business operations. The workforce is primarily based in 

FSA’s headquarters located in Washington, DC, with 10 regional offices located throughout the 

country as reflected in the following graphic (See Figure 8). The number of full-time employees 

at each location is shown in parentheses immediately following the location name.

Figure 8: Federal Student Aid Regional Map

Fiscal Year 2020
Fiscal Year 2020 Annual Report | Federal Student Aid 13

Mission and Organizational Structure

Significant Legislation that Directs the Federal Student Aid 

Mission

Several legislative acts guide FSA’s mission. The Higher Education Amendments of 1998 

established FSA as a PBO to administer the Title IV programs. The following table, while not allinclusive, identifies additional significant enactments of legislation that have influenced FSA’s 

mission.

Table 2: Overview of Legislative Authority

Legislation Purpose

Higher Education Act of 1965, as amended Created the federal student financial assistance programs known 

as Title IV programs.

Student Loan Reform Act of 1993 Authorized a multi-year phased implementation of the William D. 

Ford Federal Direct Loan Program.

Higher Education Reconciliation Act of 2005 Allowed graduate and professional students to use the Parent 

Loan for Undergraduate Studies Loan Program. 

College Cost Reduction and Access Act of 

2007

Authorized the Teacher Education Assistance for College and 

Higher Education Grant Program, created the Public Service 

Loan Forgiveness Program, and established Income Based 

Repayment plans.

Ensuring Continued Access to Student Loans 

Act of 2008

Provided the Department with the authority to implement 

programs to ensure eligible students and parents were not 

denied access to federal student loans during the credit market 

disruptions of 2008.

SAFRA Act of 2009 Provided that, beginning July 1, 2010, no new loans would be 

originated under the Federal Family Education Loan Program.

Bipartisan Student Loan Certainty Act of 2013 Established that federal student loan interest rates will be tied to 

financial markets and that each loan will have a fixed interest 

rate for the life of the loan.

Consolidated Appropriations Act, 2014 Transferred all Health Education Assistance Loan Program loans 

as of July 1, 2014, from the U.S. Department of Health and 

Human Services to the Department.
14 Fiscal Year 2020 Annual Report | Federal Student Aid

Mission and Organizational Structure

Federal Student Aid Stakeholders

The community of stakeholders in the student aid delivery system includes students, parents, 

lenders, guaranty agencies, postsecondary institutions, contracted servicers, and collection 

agencies, as well as taxpayers and other federal entities such as Congress and OMB.

Table 3: Role of FSA and Participants in the Federal Student Aid System

Participants Participants’ Role FSA’s Engagement with 

Participants

Students • Receive aid to finance postsecondary 

education and repay loans following 

completion or exit from school. 

• Explaining federal student aid 

opportunities and requirements, 

• Providing products, services, and tools to 

help students pay for postsecondary 

education, 

• Identifying students who are eligible for 

aid, and

• Protecting students and borrowers from 

unfair, deceptive, or fraudulent practices 

in the student aid marketplace. 

Guaranty Agencies • Insure Federal Family Education Loan 

Program loans and service their defaulted 

loan portfolios. 

• Monitoring compliance, 

• Assisting them in meeting regulatory 

requirements, 

• Providing technical assistance, and 

• Paying default claims.

Loan Holders • Hold and service outstanding Federal 

Family Education Loan Program loans to 

students.

• Monitoring compliance, 

• Assisting them in meeting requirements, 

• Providing interest subsidies and Special 

Allowance Payments; and 

• Educating them regarding policy.

FSA-Contracted Loan 

Servicers

• Service William D. Ford Federal Direct Loan

Program portfolio and portions of Federal 

Family Education Loan Program portfolio, 

• Provide systems and services to support 

FSA’s core operations (e.g., applications, 

disbursements), and

• Recover payments from defaulted

borrowers. 

• Entering contractual agreements, 

• Setting performance standards, and

• Overseeing operations.

Postsecondary Institutions • Determine students’ aid packages and 

disburse funds.

• Determining eligibility and disbursing aid, 

• Monitoring compliance and regulatory 

requirements, and

• Providing technical assistance.

Congress • Sets statutory requirements for student loan 

programs as well as a myriad of borrower 

benefits and budget appropriations. 

• Providing data and information for 

decision making and

• Providing updates on operational 

performance.

The President, the 

Department, and others in 

the Executive Branch

• Set regulatory standards and establish 

policy for the distribution of aid and 

collection of loan payments. 

• Providing data that informs policy 

decisions, 

• Providing recommendations for 

implementation of new policies, and

• Sharing information regarding high risk 

compliance concerns. 
Fiscal Year 2020 Annual Report | Federal Student Aid 15

Mission and Organizational Structure

FSA’s responsibilities include coordinating and monitoring the activity of the large number of 

federal, state, nonprofit, and private entities involved in delivering federal student aid within the 

statutory framework established by Congress and regulatory framework established by the 

Department.
16 Fiscal Year 2020 Annual Report | Federal Student Aid

Mission and Organizational Structure

Federal Student Financial Aid Programs

Each year, FSA delivers more than $115 billion in financial aid to students through the Title IV 

programs of the HEA. These programs collectively represent the nation’s largest source of 

federal financial aid for postsecondary education students. This aid covers expenses such as 

tuition and fees, room and board, books and supplies, and transportation. Federal financial aid 

is mainly distributed to students through: 

• Loans: Student aid funds that are borrowed to help pay for eligible education programs

and must be repaid with interest,

• Grants: Student aid funds that do not have to be repaid, unless other conditions apply,

and

• Work-Study: Part-time employment program that allows students enrolled in college to

earn money to help pay for school.

To obtain federal financial aid, prospective aid recipients must complete the FAFSA. In 

FY 2020, FSA processed more than 17.8 million FAFSA forms, resulting in the delivery of 

approximately $115.6 billion in Title IV aid to more than 10.8 million postsecondary students and 

their families. These students attended more than 5,600 active institutions of postsecondary 

education that participate in federal student aid programs and which are accredited by agencies

recognized by the Secretary. 

The following table presents a comparison of the amounts of Title IV aid disbursed to students 

by program in FY 2020 and FY 2019. A summary discussion of each Title IV program is 

presented in the paragraphs after the table.
Fiscal Year 2020 Annual Report | Federal Student Aid 17

Mission and Organizational Structure

Table 4: Summary of Federal Aid Disbursed to Students by Program5

(Dollars in Millions)

Programs

2020 Aid 

Disbursed 

to Students

2019 Aid 

Disbursed 

to Students

Difference Percentage 

Change

Federal Loan Programs

William D. Ford Federal Direct Loan 

Program $86,129.4 $90,156.0 $(4,026.6) (4.5)% 

Federal Perkins Loan Program 0.0 630.5 (630.5) (100.0)

Other Loan Programs - - - 0.0%

Subtotal Loan Programs $86,129.4 $90,786.5 $(4,657.1) (5.1)% 

Federal Grant Programs

Federal Pell Grant Program $27,466.5 $28,974.7 $(1,508.2) (5.2)% 

Federal Supplemental Educational 

Opportunity Grant Program 820.5 853.5 (33.0) (3.9) 

The Teacher Education Assistance for 

College and Higher Education Grant 

Program 

78.1 78.5 (0.4) (0.5) 

Other Grant Programs 0.5 0.4 0.1 (25.0)

Subtotal Grant Programs $28,365.6 $29,907.1 $1,541.5 (5.2)% 

Federal Work-Study Program

Federal Work-Study Program $1,079.3 $1,078.5 $0.8 0.1% 

Rounding 0.1 0.1 0.0 0.0 

Grand Total $115,574.4 $121,772.2 $(6,197.8) (5.1)% 

Federal Loan Programs

In fulfilling its program responsibilities, FSA directly manages or oversees a loan portfolio of 

more than $1.5 trillion, representing approximately 212 million student loans to more than 

45 million borrowers. These loans were made primarily through the first two federal student loan 

programs described below.

The William D. Ford Federal Direct Loan (Direct Loan) Program lends funds directly to 

students and parents through participating schools. Created in 1993, this program is funded 

primarily by borrowings from Treasury, as well as an appropriation for subsidy costs. Four

different types of direct loans are available for borrowers: 

5 Aid disbursed to students as cited in the table above, and in the following sections concerning the Federal Loan Programs, the 

Federal Grant Programs, and the Federal Work-Study Program in the Management’s Discussion and Analysis, excluding the 

Federal Perkins Loan Program amounts, are derived from amounts from FSA’s and the Department’s financial systems. All amounts 

are fiscal year amounts, except for the Federal Perkins Loan Program, which is reported as the prior award year amount 

(e.g., Award Year 2018–19 reported in FY 2020). The number of awards or recipients reported in the Management’s Discussion and 

Analysis is derived from a variety of sources including FSA’s Common Origination and Disbursement System and data used to 

support the President’s Budget. Recipient counts are based on award year.
18 Fiscal Year 2020 Annual Report | Federal Student Aid

Mission and Organizational Structure

• Direct Subsidized Loans: Federal loans based on financial need made to

undergraduate students for which the federal government generally does not charge

interest while the borrower is in school, in grace, or in deferment status. If the interest is

not paid during the grace period, the interest is added to the loan’s principal balance.

• Direct Unsubsidized Loans: Federal loans made to undergraduate students and

graduate students for which the borrower is fully responsible for paying the interest

regardless of the loan status. Interest on unsubsidized loans accrues from the date of

disbursement and continues throughout the life of the loan.

• Direct Parent Loans for Undergraduate Students (PLUS) Loans: Federal loans

made to graduate or professional students and parents of dependent undergraduate

students for which the borrower is fully responsible for paying the interest regardless of

the loan status.

• Direct Consolidation Loans: Federal loans that allow the borrower to combine multiple

existing federal student loans into one new loan. The borrower will only have to make

one monthly payment on the consolidation loan, and the repayment term of the loan may

be longer than the terms of the original loans, which may result in a lower monthly

payment.

As of September 30, 2020, FSA’s portfolio of Direct Loans included $1,100.5 billion in credit 

program receivables, net. In FY 2020, the Department made $86.1 billion6 in net loans to 

7.9 million recipients.

Under the Federal Family Education Loan (FFEL) Program, students and parents obtained 

federal loans through private lenders. Guaranty Agencies insure lenders against borrower 

default; the federal government, in turn, reinsures the guaranty agencies. Federal subsidies 

ensure private lenders earn a certain yield on the loans they hold. 

The passage of the SAFRA Act, which was included in the Health Care and Education 

Reconciliation Act of 2010 (HCERA) (Pub. L. 111-152), ended the origination of new FFEL 

Program loans as of July 1, 2010. Nevertheless, FSA, lenders, and guaranty agencies continue 

to service and collect outstanding FFEL Program loans. FSA, FFEL lenders, and guaranty 

agencies held a FFEL Program loan portfolio of approximately $108.8 billion as of

September 30, 2020. Of this portfolio, $67.4 billion represented FSA’s credit program 

receivables, net. In FY 2020, FSA made gross payments of approximately $757.9 million to 

lenders for interest and special allowance subsidies and $5.6 billion to guaranty agencies for 

reinsurance claims and fees paid for account maintenance, default aversion, and collection 

activities.

The Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) authorized the 

Department to implement a number of programs to ensure credit market disruptions did not 

deny eligible students and parents access to federal student loans for the 2008–09 and 

2009–10 academic years. The authority for two ECASLA Programs, the Loan Purchase 

Commitment Program and the Loan Participation Interest Purchase Program, expired after 

6 Excludes consolidation loans of $30.4 billion.
Fiscal Year 2020 Annual Report | Federal Student Aid 19

Mission and Organizational Structure

September 30, 2010. The third ECASLA Program, the Asset-Backed Commercial Paper

Conduit (ABCP Conduit) Program, ended in January 2014. 

As of September 30, 2020, FSA-held FFEL credit program receivables net totaled $67.4 billion, 

comprising $21.1 billion acquired under the "traditional" (Non-ECASLA) guaranteed loan 

program, and $46.3 billion in loans acquired under the ECASLA authorization.

The Federal Perkins Loan Program is one of three campus-based student aid programs.

These federal loans were made by schools to undergraduate and graduate students who 

demonstrate financial need. Historically, participating schools received a certain amount of 

funds each year from FSA for distribution under this program, which supplemented funds in a 

school’s revolving fund, from which new disbursements were made. These funds enabled 

eligible institutions to offer low-interest loans to students based on financial need. Once the full 

amount of the school’s funds had been awarded to students, no additional loans were to be 

made under this program for the year. In FY 2020, FSA reported Award Year 2018–19 

disbursements of approximately $0 million of funds, comprising 0 awards to eligible students. 

The Federal Perkins Loan Program Extension Act of 2015 eliminated the authorization for 

schools to make new Perkins loan disbursements as of September 30, 2017 and ended all 

Perkins loan disbursements by June 30, 2018. 

The Health Education Assistance Loan (HEAL) Program was transferred to the Department 

from the U.S. Department of Health and Human Services in FY 2014 under the Consolidated 

Appropriations Act, 2014 (Pub. L. 113-76). This program enabled graduate students in schools 

of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health, 

pharmacy, chiropractic, or programs in health administration and clinical psychology to obtain 

federally insured loans through participating lenders. Since September 30, 1998, no new loans 

have been originated through this program; however, borrowers are still obligated to repay any 

outstanding loans obtained through the program.

The Department assumed responsibility for the program and the authority to administer, service, 

collect, and enforce the loans. Credit program receivables, net of allowance for subsidy, were 

approximately $386.0 million for FY 2020. 

Federal Grant Programs

In fulfilling its responsibility for administering Title IV aid, FSA oversaw the disbursement of 

approximately $28.4 billion in grants to 6.7 million recipients. The following provides a summary 

for each grant program, including aid disbursed in FY 2020. 

The Federal Pell Grant (Pell Grant) Program helps ensure financial access to postsecondary 

education by providing grant aid to low-income and middle-income undergraduate students. 

Considered the foundation of a student’s financial aid package, Pell Grants vary according to 

the financial circumstances of students and their families. In FY 2020, the Department disbursed 

$27.5 billion in Pell Grants averaging approximately $4,080 to approximately 6.7 million 

students. The maximum Pell Grant award was $6,195 in the 2019–20 award year and increased 

to $6,345 in the 2020–21 award year. 

The Federal Supplemental Educational Opportunity Grant Program is one of three campusbased programs through which the Department provides funds directly to eligible institutions. 

Funds provided through this program enable eligible institutions to offer grants to students 
20 Fiscal Year 2020 Annual Report | Federal Student Aid

Mission and Organizational Structure

based on need. Federal grants distributed under this program are administered directly by the 

financial aid office at each participating school. Each participating school receives a certain 

amount of Federal Supplemental Educational Opportunity Grant funds each year from FSA.

Once the full amount of the school’s grant funds has been awarded to students, no additional

awards can be made under this program for the year. This form of aid does not require 

repayment. In FY 2020, approximately $820.5 million were disbursed through approximately 

1.8 million campus-based awards.

The Teacher Education Assistance for College and Higher Education (TEACH) Grant

Program provides individual awards up to $4,000 per year to students agreeing to teach 

mathematics, science, or other specialized subjects in a high-poverty school for at least four 

years within eight years of their graduation. This grant program began in the 2008–09 school 

year, starting July 1, 2008. For any 2019–20 or 2020–21 TEACH Grant first disbursed on or 

after October 1, 2019, and before October 1, 2020, the maximum award is $3,764. For any 

2020-21 TEACH Grant first disbursed on or after October 1, 2020, and before October 1, 2021, 

the maximum award is $3,772. If students fail to fulfill the service requirements specific to the 

program, their TEACH Grants convert to Direct Unsubsidized Loans, with interest accruing from 

the time of the award. In FY 2020, the Department disbursed more than 25,000 grants totaling 

$78.1 million under the TEACH Grant Program. 

The Iraq and Afghanistan Service Grant Program, which became effective July 1, 2010, 

provides non-need-based grants to students whose parent or guardian was a member of the 

Armed Forces and died in Iraq or Afghanistan because of military service after

September 11, 2001. These grants are awarded to students who are not eligible for a Pell Grant 

based on financial need, but meet the remaining Pell Grant eligibility requirements, and:

• Have a parent or guardian who was a member of the U.S. Armed Forces and died as a 

result of military service in Iraq or Afghanistan after the 9/11 events, and

• Were under 24 years old or enrolled in college at least part-time at the time of the parent 

or guardian’s death.

For any 2020–21 Iraq and Afghanistan Service Grant first disbursed on or after October 1, 2019, 

and before October 1, 2020, the maximum award is approximately $5,971. For any 2020–21 

Iraq and Afghanistan Service Grant first disbursed on or after October 1, 2020, and before 

October 1, 2021, the maximum award is approximately $5,983. The Department disbursed 

approximately $525,000 to support fewer than 100 awards in FY 2020. 

Federal Work-Study Program

The Federal Work-Study Program is one of three campus-based programs through which the 

Department provides funds directly to eligible institutions. Funds provided through this program 

enable eligible institutions to offer part-time employment to undergraduate, graduate, and 

professional students based on financial need, allowing them to earn money to help pay 

education expenses. The program is available to full-time or part-time students and encourages 

community service work. The work is often related to the student’s course of study. In FY 2020, 

approximately $1.1 billion were disbursed through more than 731,000 campus-based awards. 
Fiscal Year 2020 Annual Report | Federal Student Aid 21

Performance Management

Performance Management

The Performance Management section of the Annual Report provides a general overview of the 

performance management processes at FSA. The foundation of performance management 

within FSA is the five-year strategic plan. The key strategic drivers relevant to the strategic 

planning process within FSA are listed below. 

Table 5: Key Strategic Drivers Relevant to FSA Strategic Planning

Key Strategic Driver Relevance to FSA’s Strategic Planning Process

The Higher Education Act of 1965

legislation 

Prescribes Title IV program and PBO requirements (i.e., improve 

service, reduce costs, improve, and integrate support systems, 

develop delivery and information systems, and enhance staff 

development and talent). 

Student and borrower needs Students and borrowers are key customers of FSA services and 

products. 

Key trends and conditions for the financial 

aid environment 

Indicates student aid environment within which FSA must operate. 

Listed below are key trends that may affect the financial aid 

environment.

• The size and performance of FSA’s portfolio of loans has 

direct implications for taxpayers. 

• Students are making high impact financial decisions without 

the benefit of adequate financial knowledge. 

• Digital fluency and mobile ubiquity are driving new service 

expectations among customers.

• Increased volume of student data has created new 

opportunities, obligations, and risks. 

The Department’s Five-Year Strategic 

Plan 

Requires FSA’s support of the Department’s strategic goals related 

to postsecondary education.

Office of Inspector General’s (OIG)

Management Challenges 

Requires the Department and FSA senior management’s 

consideration for establishing priorities. OIG’s Management 

Challenges for FY 2020 include:

• Improper Payments, 

• Information Technology Security, 

• Oversight and Monitoring, and

• Data Quality and Reporting.

OIG and GAO audits Requires FSA senior management’s consideration for establishing 

priorities to address findings and recommendations. 

Federal financial management laws and 

regulations 

Prescribes financial management requirements. 

Federal performance reporting legislation 

and requirements 

Prescribes performance and reporting requirements. 

Federal budget deficits Requires FSA to look for opportunities to reduce operating costs 

through improved efficiency. 
22 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Management

The key strategic drivers inform the strategic planning process, aligning FSA with the PBO 

requirements outlined in the 1998 Amendments to the HEA while ensuring future consistency 

and accountability. In this way, the key strategic drivers influenced the development and 

implementation of FSA’s strategic plan, as well as the development and tracking of performance 

measures. The Performance Management section illustrates the outcome of this effort by 

discussing the following:

• FSA’s transition to a new FY 2020–24 Strategic Plan, 

• FSA’s performance management processes, 

• FSA’s FY 2020 strategic goals, 

• FSA’s alignment to the Department’s FY 2018–22 Strategic Plan, and

• FSA’s efforts to validate the quality of performance data reported. 

The performance management framework outlined in this section provides the foundation for 

the presentation of both performance achievements and challenges experienced in FY 2020. 

The section also highlights the organizational emphasis to create a more robust culture of 

performance management through collaboration internally and with Department officials.

FSA’s Transition to the FY 2020–24 Strategic Plan

In FY 2019, FSA initiated the development of an organizational five-year performance plan that 

aligned with its vision to create a more student-focused, agile, and transparent organization. 

The plan, FY 2020–24 Strategic Plan, establishes ambitious goals and objectives to ensure that 

FSA will continue to improve upon its mission while increasing accountability in all areas of 

organizational performance. As FSA also continues its implementation of the Next Gen FSA 

initiative, staged to transform nearly every aspect of the federal student aid programs, the draft 

FY 2020–24 Strategic Plan creates measurable outcomes consistent with the effort.

From an organizational performance standpoint, FSA managed the organization towards the 

strategic goals, objectives, and performance metrics established in the draft FY 2020–24

Strategic Plan throughout FY 2020. To maintain consistency with the previous FY 2015–19 

Strategic Plan, FSA transitioned eight performance metrics into the draft FY 2020–24 Strategic 

Plan. FSA aligned the transitioned metrics under the appropriate goals and objectives to 

strengthen the range of measurement in key performance areas. FSA also discontinued the 

utilization of five performance metrics from the FY 2015–19 Strategic Plan and will no longer 

use these performance metrics to measure organizational progress.

To increase accountability, FSA introduced 36 new performance metrics in the draft 

FY 2020–24 Strategic Plan. Therefore, there are a total of 44 performance metrics within the 

new plan in comparison to 13 performance metrics outlined in the previous one. The significant 

increase in performance metrics associated with the draft FY 2020–24 Strategic Plan is

illustrative of FSA’s concerted effort to evaluate its progress across its five strategic goals 

through clear and measurable strategic objectives to reinforce accountability and transparency 

in operations. By assigning detailed performance metrics to each goal and objective throughout 

the plan, FSA broadened its scope to analyze organizational progress. In this way, both now 

and in the future, FSA can establish performance targets that are aligned with measurable 

outcomes of organizational success.
Fiscal Year 2020 Annual Report | Federal Student Aid 23

Performance Management

To review the performance metrics transitioned and discontinued from the FY 2015–19 

Strategic Plan, please refer to the Crosswalk between FY 2015–19 and FY 2020–24 Strategic 

Plans (Table 6). For a more detailed discussion of the goals, objectives and performance 

metrics associated with the FY 2020–24 Strategic Plan, please refer to the Annual Performance 

Report section of this document.

Table 6: Crosswalk between FY 2015–19 and FY 2020–24 Strategic Plans

Performance Metrics FY 2015–19 Plan Disposition in FY 2020–24 Plan 

A.1 Percent of First-Time FAFSA Filers Among 

High School Seniors 

2.1.B Percentage of high school seniors 

submitting the FAFSA. 

A.2 Persistence Among First-Time Filing Aid 

Recipients 

5.1.E Persistence among first-time filing aid 

recipients.

A.3 Customer Visits to StudentAid.gov 

2.1.A Number of visits (sessions) demonstrating 

adoption of the updated StudentAid.gov 

site.

A.4 Social Media Channel Subscribership Discontinued in FY 2020

A.5 ACSI Aid Life Cycle Surveys 2.2.G American Customer Satisfaction Index 

(ACSI) Aid Lifecycle Survey score.

B.1 Improper Payment Rate Discontinued in FY 2020

B.2 Percent of Borrowers > 90 Days Delinquent 5.3.C Percent of Borrowers > 90 Days 

Delinquent.

C.1 Aid Delivery Costs Per Application Discontinued in FY 2020

C.2 Outstanding Direct Loan Portfolio in Current 

Repayment Status 

5.1.C Outstanding Direct Loan Portfolio in 

Current Repayment Status.

D.1 Ease of Doing Business with FSA 3.2.D Ease of doing business with FSA.

D.2 Percentage of Contract Dollars Competed by 

FSA Discontinued in FY 2020

D.3 Collection Rate Discontinued in FY 2020

E.1 Employee Engagement Index 

1.1 Improve Federal Employee Viewpoint Survey 

score: Employee Engagement Index. FSA’s 

scores will improve the first year and 

continue to increase 1–2% annually.
24 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Management

Performance Management Processes at Federal Student Aid

During FY 2020, FSA used a tiered performance management framework to establish goals and 

communicate, measure, and report performance:

• FSA FY 2020–24 Strategic Plan

• Weekly Performance Accountability Meetings

• Annual Performance Report

• Department’s Quarterly and Annual Performance Reviews

• Agency Priority Goals (APGs)

FSA’s FY 2020‒24 Strategic Plan

The FY 2020–24 Strategic Plan outlines goals, objectives, and performance metrics that provide 

a roadmap for how FSA will successfully operate, respond to change, and execute its mission 

moving forward. These strategic goals collectively provide the framework for continuous 

improvement at FSA, guiding the organization in managing its programs more effectively, and 

providing clear strategic direction to all of FSA’s internal and external constituencies. To provide 

the framework to effectively achieve these outcomes the five-year strategic goals must be:

• Appropriate to the mission of the organization, 

• Realistic and measurable, 

• Achievable in the time frame established and challenging in their targets, and

• Understandable to the layperson with language that is unambiguous and terminology 

that is adequately defined.

As stated, each strategic goal encompasses objectives and identifies performance metrics to 

measure FSA’s level of success in meeting the strategic goal. For each performance metric, 

FSA identifies a target level of performance for each fiscal year. FSA sets the target level of 

performance at a challenging, but realistic level that is achievable within the timeframe. Meeting 

or exceeding the target indicates that FSA succeeded in attaining the established performance 

metric, while falling short of the target indicates that FSA did not attain the performance metric. 

The following table summarizes the key components of the FY 2020–24 Strategic Plan. 
Fiscal Year 2020 Annual Report | Federal Student Aid 25

Performance Management

Table 7: Key Components of the FY 2020–24 Strategic Plan

Key Component Description

Strategic Goals Statements of long-term purpose outlined in the FY2020–24 Strategic Plan that 

define how FSA will accomplish its mission. These goals are aligned to FSA’s 

responsibilities as a PBO. 

Objectives Statements that describe the tactical activities FSA will perform to achieve the 

associated strategic goal. 

Performance 

Metrics

Levels of performance over a certain timeframe used to gauge FSA’s success in 

reaching its strategic goals. These metrics include targets and timeframes. 

Targets Indicators of the desired performance levels or specific desired results targeted 

for a given fiscal year. Targets, if available, are expressed in quantifiable terms 

and are compared to the actual result to determine level of performance. 

FSA’s FY 2020‒24 Strategic Plan – At a Glance

The FY 2020–24 Strategic Plan outlines strategic goals and objectives that will be used to track 

and evaluate FSA’s progress toward meeting its mission. The following table provides an 

abbreviated view of the FY 2020–24 Strategic Plan. 

Table 8: Strategic Goals and Strategic Objectives for Fiscal Years 2020‒24

Strategic Goal 1 Strategic Objectives

Empower a High Performing Organization

1.1: Improve employee engagement and workplace inclusion to 

develop and retain talent, improve employee satisfaction, and 

engage in effective succession planning.

1.2: Expand employee skills and capabilities to support Next Gen 

FSA. 

Strategic Goal 2 Strategic Objectives

Provide World-Class Customer 

Experience to the Students, Parents, and 

Borrowers We Serve

2.1: Ensure that all students can easily access information on 

federal student aid, apply for federal student aid, and have 

information on repayment options.

2.2: Provide seamless, easy, personalized digital interactions equal 

with top financial institutions in the delivery of financial aid 

products and services.

2.3: Streamline contact center and back-office operations to improve 

our customers’ integrated experience.

2.4: Simplify the communication and processes associated with 

borrower repayment plans.

Strategic Goal 3 Strategic Objectives

Increase Partner Engagement and 

Oversight Effectiveness

3.1: Provide effective oversight of FSA’s partners utilizing a 

comprehensive suite of monitoring tools.

3.2: Strengthen partner engagement and provide effective outreach 

and assistance. 
26 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Management

Strategic Goal 4 Strategic Objectives

Strengthen Data Protection and 

Cybersecurity Safeguards.

4.1: Implement business partner and vendor systems that house, 

manage, and provide systems supporting FSA business 

processes, outreach and awareness focused on oversight, 

enforcement, infrastructure, systems, and data.

4.2: Improve student privacy data and cybersecurity controls of 

Institutions of Higher Education (IHEs) through outreach and 

communication to mitigate future cyber-incidents and breaches. 

4.3: Build an effective cybersecurity culture through employee 

awareness, training and accountability focused on protecting 

systems and data.

Strategic Goal 5 Strategic Objectives

Enhance the Management and 

Transparency of the Portfolio

5.1: Improve the management and transparency of FSA’s student 

loan portfolio performance.

5.2: Provide analytics and operational support for a customercentric, data-driven, performance-based organization.

5.3: Leverage portfolio analytics to drive improved outcomes for 

customers and taxpayers.

5.4: Increase vendor performance through quality management 

activities centered on customer service and product delivery.

Weekly Performance Accountability Meetings

Throughout FY 2020, FSA measured and analyzed performance based upon performance 

metric results outlined in the draft FY 2020–24 Strategic Plan, as well as various internal metrics 

used for operational management. The analysis of performance is a transparent process within 

the organization, executed through weekly performance accountability meetings with the FSA 

leadership and management team.

Each week, the analysis of specified performance metrics is presented through various 

performance dashboards to the FSA leadership and management team by program managers 

responsible for outcomes. In the weekly meetings, progress of the designated performance 

metrics, both negative and positive, is discussed in an open forum. For any performance metrics 

not on track, the analysis must include identification of the root cause of the unexpected result 

and a recommendation of the appropriate corrective actions necessary to improve performance. 

Performance dashboards for the draft FY 2020–24 Strategic Plan and the performance metrics 

associated with the Department’s Quarterly Performance Review were also developed in 

FY 2020 and utilized to discuss performance metric progress on a quarterly basis.

Annual Performance Report

To report progress on meeting the strategic goals, FSA prepares and publishes an Annual

Performance Report, which is included in the Annual Report. In addition to the Annual 

Performance Report, the Annual Report includes FSA management’s discussion and analysis of 

financial and performance results, its audited financial statements and notes, and the report of 

the independent auditors.

Department of Education Quarterly and Annual Performance Reviews

The Quarterly and Annual Performance Review meetings and data calls are part of the 

Department-wide performance management system. The meetings, associated data collection, 

and reporting protocols operate at the principal office level and are designed to integrate and 
Fiscal Year 2020 Annual Report | Federal Student Aid 27

Performance Management

align all of the Department’s performance management elements, including the U.S. 

Department of Education Strategic Plan for Fiscal Years 2018–22, APGs, the priorities of the 

President and other principal offices, and legal requirements. The Quarterly Performance 

Review framework primarily focuses on process improvements and capacity building, providing 

principal offices an opportunity to establish specific milestones. FSA tracks the status of its

Quarterly Performance Review metrics and reports on its progress to the Department on a 

quarterly and annual basis.

The Department’s goals, objectives, and performance measures have been integrated 

seamlessly into FSA’s draft FY 2020‒24 Strategic Plan. Fourteen performance measures are 

shared between the plans, and others are built into the objectives. The decision to have shared 

performance metrics between the plans was made during the development of the strategic plan 

to ensure there was both consistency and alignment between the Department and FSA. This 

decision will improve customer service, partner collaboration, and oversight throughout FSA’s 

ongoing efforts. Currently, FSA directly supports the following Department strategic goals:

• Goal 2: Expand postsecondary educational opportunities; improve outcomes to foster 

economic opportunity; and promote an informed, thoughtful, and productive citizenry.

• Goal 3: Strengthen the quality, accessibility, and use of education data through better 

management, increased privacy protections, and transparency.

• Goal 4: Reform the effectiveness, efficiency, and accountability of the Department 

through its focuses on vendor management, risk mitigation, and cybersecurity.
28 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Management

Agency Priority Goals 

APGs are a performance accountability structure of the Government Performance and Results 

Modernization Act of 2010 (Pub. L. 111-352) that provide agencies a mechanism to focus on 

leadership priorities, set outcomes, and measure results, bringing focus to mission areas where 

agencies need to drive significant progress and change. APG statements are outcome-oriented, 

ambitious, and measurable with specific targets set that reflect a near-term result or 

achievement agency leadership wants to accomplish within approximately 24 months.

In FY 2020, the Department identified five proposed APGs for FY 2020–21. These APGs were 

focused on an increase in educational choice, enhancing multiple pathways for student success 

in career and job ready skills, improving the customer service the Department provides, and 

improving student privacy protection and cybersecurity at institutions of higher education and 

provide regulatory relief and burden reduction to education stakeholders. Of the five APGs, two 

were closely tied to FSA’s mission and were supported by FSA during FY 2020. They are:

• Related to Goal 2.4 – APG: The Next Generation Financial Services Environment 

(Next Gen FSA) will personalize and improve customers’ experience when they engage 

with Federal Student Aid (FSA); and

• Related to Goal 3.2 – APG: Improve Student Privacy and Data Security at Institutions 

of Higher Education through Outreach and Compliance Efforts.

Each quarter, the Department analyzes the progress toward accomplishing the Departmental 

APGs, with the objective of successfully accomplishing the current APGs by September 30, 

2021.

To achieve the success of the Goal 2.4 APG, FSA is responsible for improving the customers’ 

experience throughout the entire student aid life cycle by continuing to modernize capabilities 

for the FAFSA application and the servicing and repayment of student loans. As noted in the 

APG, Next Gen FSA is the Department’s transition to the digital future of FSA and aims to shift 

FSA to be a more customer-centric organization. It is the Department’s expectation, articulated 

within the APG Achievement Statement, that FSA will build products and services that meet 

customers’ expectations. The Department notes that this strategy is predominately used in 

private industry, and now several government agencies, including FSA, are following this 

customer-centric model. The FY 2020 approved Goal 2 APG statement is:

By September 30, 2021, FSA will transform its relationship with prospective and current 

customers through deployment of significant components of the Next Gen FSA that result in a 

personalized experience:

• The number of individuals submitting a Free Application for Federal Student Aid® 

(FAFSA®) through a mobile device will increase to 2.6 million.
Fiscal Year 2020 Annual Report | Federal Student Aid 29

Performance Management

• The overall customer satisfaction level throughout the student aid life cycle, as 

measured by the FSA Customer Satisfaction score7

, will increase.

Therefore, the APG is aligned with the progress of Next Gen FSA and is measured by the 

following customer-centric metrics in FY 2020:

• Number of customers submitting the FAFSA forms via a mobile platform—either through 

the myStudentAid mobile app or mobile-optimized FAFSA.gov. 

• The overall customer satisfaction level throughout the student aid life cycle, as 

measured by the ASCI. 

• Number of customers checking loan balances via the myStudentAid mobile app. 

• Number of users adopting a virtual assistant that will answer questions about federal 

student aid. 

• Number of visits (sessions) to the redesigned StudentAid.gov website. 

For data validation purposes, mobile app and FAFSA data are collected from Apple’s App Store, 

Google Play, and FSA’s online platform analytics. For number of downloads of the app, FSA 

generates a monthly report directly from Apple’s App Store and Google Play. The data are 

reported as a cumulative number for all three months within the quarter, and summarily for the 

entire fiscal year reporting.

For the Goal 3.2 APG, FSA works with the Department’s Office of the Chief Information Officer 

(OCIO). The Goal 3.2 APG statement is:

By September 30, 2021, the Department will participate in 12 engagements with sector-related 

Non-Governmental Organizations (NGOs) to inform the development of five best practice 

programmatic improvements such as, by:

1) Issuing guidance to IHEs to provide a definition of information security breach and when 

and how to report a breach;

2) Establishing secure mechanisms for breach notification, including secure storage for 

such information; or

3) Creating a process through which IHEs can validate compliance notifications and 

reporting requests.

As previously stated, this is also a two-year APG covering FY 2020 and FY 2021. FSA and the 

Department will achieve this APG through collaborative efforts involving training, outreach, 

monitoring, and reporting to include:

7 The Federal Student Aid Customer Satisfaction Score is an annual composite metric that measures the overall 

customer satisfaction level throughout the student aid life cycle FAFSA applicants (mobile and FAFSA.gov), Title IV 

aid recipients in school, and borrowers in repayment. The score is based on the American Customer Satisfaction 

Index surveys.
30 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Management

• Issuing best practice programmatic improvements documents to IHEs to provide a 

definition of information security breach and on when and how to report an information 

security breach.

• Establishing secure mechanisms for breach notification, including secure storage for 

such information.

• Creating a process through which IHEs can validate compliance notifications and 

reporting requests.

• Developing a collaborative IHE outreach strategy in compliance with the Gramm-LeachBliley Act (GLBA) and constructing an outreach timeline.

• Conducting ongoing outreach activities by FSA and the Privacy Technical Assistance 

Center within the Student Privacy Policy Office related to privacy and data security 

requirements.

• Tracking the timeliness of privacy and data security reports received by FSA as a result 

of FSA outreach activities.

For data validation purposes regarding the outreach metric, the activity records maintained by 

FSA and the Department’s OCIO through the Department’s Privacy Technical Assistance 

Center, are recorded on a SharePoint site. Based on actions by contractors, Department 

personnel, and FSA personnel, data accuracy is high, reliable, and consistent.

All APG metric results were also made available on Performance.gov each quarter for public 

view.
Fiscal Year 2020 Annual Report | Federal Student Aid 31

Performance Management

Quality of Performance Data

Ensuring the integrity of the data required to determine performance results is a critical step in 

reporting performance. For this step, FSA developed and implemented a Validation and 

Verification Matrix. Specifically, FSA uses this matrix as a tool to validate the completeness and 

reliability of the underlying data gathered and used to calculate each performance metric for the 

reporting period, including the performance results reported in this Annual Report. For each 

performance metric, this matrix is used to document the following: measurement definition and 

owner; data source, availability, security procedures, and known limitations; whether data are 

subject to FSA’s OMB Circular A-123 Internal Control Review process; and procedures for 

accessing the data, calculating the performance metric, and validating and verifying the data 

gathered.

In FY 2020, FSA updated its approach to create the matrix using an online information collection 

tool. The information collection tool automated the process of information gathering across the 

organization. In addition, the information received by the tool was also used to establish the 

process of performance reporting and generate content for this report.

For a discussion of data quality and limitations for each performance metric, please see the 

section Performance Results by Strategic Goal, contained in the Annual Performance Report

section.
32 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Analysis of Financial Statements

Introduction

The Analysis of Financial Statements section provides an overview of FSA’s financial results for 

FY 2020. This section assists readers in understanding FSA’s financial results, position, and 

condition as reflected in the financial statements and notes located in the Financial Section of 

this report. The financial analysis explains major changes in assets, liabilities, costs, and 

budgetary resources. It also includes comparisons of the current year to the four prior years and 

discusses the relevance of significant balances, amounts, and trends reflected in the financial 

statements and notes.

FSA is committed to providing sound management, financial systems, and controls to ensure 

students receive aid and repay loans according to applicable laws and regulations. FSA’s 

financial statements are prepared in accordance with established federal accounting standards 

and reporting requirements. The financial statements are subject to an annual independent 

audit to determine whether FSA’s financial statements present fairly FSA’s financial position, net 

cost, changes in net position, and budgetary resources. In FY 2020, FSA achieved an 

unmodified audit opinion on its financial statements for the eighteenth consecutive year.

FSA presents its financial statements and notes in the format required by OMB Circular A-136, 

Financial Reporting Requirements. For FY 2020 and FY 2019, the Balance Sheet, Statement of 

Net Cost, and Statement of Changes in Net Position were prepared on a consolidated basis, 

whereas the Statement of Budgetary Resources was prepared on a combined basis. These 

financial statements, along with the Independent Auditors’ Report on these statements, can be 

found in the Financial Section of this Annual Report. 

FSA has oversight responsibilities for more than $1.5 trillion in federal student loans, of which it 

directly owns and manages approximately $1.4 trillion. The remaining balance represents nondefaulted FFEL Guaranteed loans held by lenders and Federal Perkins loans held by schools, 

as detailed in Note 5. As described in Note 1 and Note 5, FSA reports its portfolio of federal 

student loans on its Balance Sheet, on the line item Credit Program Receivables, Net. This is 

the gross amount of loans and interest receivable less an allowance for the present value of 

amounts not expected to be recovered (Allowance for Subsidy). Subsidy Expense is a factor 

included in the Allowance for Subsidy and represents an estimate in present value terms of the 

cost to the government of direct loans and loan guarantees. Subsidy Expense is recorded in the 

year a loan is disbursed and updated annually through a re-estimation process. It includes 

default costs (net of recoveries), contractual payments paid to third-party private collection 

agencies (PCAs), and net borrowing costs, less any origination or other fees collected. If the net 

cost to the government is greater than zero, then the subsidy expense is said to be positive. 

However, the subsidy expense may also be zero (break-even), or it may be negative if the 

estimated cost of providing loans to borrowers is less than the value of collections received as 

interest and fees. As of September 30, 2020, FSA reported $1.2 trillion in Credit Program 

Receivables, Net after deducting an Allowance for Subsidy of approximately $258.3 billion. 

Credit Program Receivables, Net was 0.3 percent less than the prior-year amount which 

resulted from a 8.9 percent decrease in FSA’s underlying portfolio of credit program receivables 

that was offset by adjustments that decreased the FY 2020 Allowance for Subsidy by 
Fiscal Year 2020 Annual Report | Federal Student Aid 33

Analysis of Financial Statements 

approximately 38 percent from the FY 2019 amount. The reasons for the adjustment to the 

Allowance for Subsidy estimate are explained in Note 5. 

The FY 2020 FSA Financial Highlights tables presented below provide a condensed summary 

of the significant balances in FSA’s Balance Sheets and Statements of Net Cost over a five-year 

period, beginning with FY 2016. The tables also show the percentage change between the prior 

and current fiscal years as of September 30, 2019 and 2020, respectively. The figures and 

tables presented in this section include rounding adjustments to ensure that the component line 

items sum to the corresponding total. As a result, there may be small discrepancies between the 

amounts shown in a particular figure or table when compared to similar items discussed in the 

text or presented in other areas of the Annual Report.

Table 9: Federal Student Aid Financial Highlights

Condensed Balance Sheets

Fiscal Years 2016–20

(Dollars in millions)

Asset FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Percentage 

Change8

Fund Balance with Treasury $60,358 $74,032 $73,405 $62,567 $70,266 12.3%

Credit Program Receivables, Net 1,075,227 1,145,406 1,209,495 1,202,092 1,169,614 (2.7)

Remaining Assets 1,334 2,256 2,365 2,217 2,171 (2.1) 

Total Assets $1,136,919 $1,221,694 $1,285,265 $1,266,876 $1,242,051 (2.0)% 

 

Debt $1,126,345 $1,178,473 $1,258,481 $1,287,494 $1,249,807 (2.9)% 

Subsidy due to Treasury General 

Fund 2,642 7,013 7,528 10,302 3,283 (68.1) 

Remaining Liabilities 9,614 13,000 10,197 13,971 8,350 (40.2)

Total Liabilities $1,138,601 $1,198,486 $1,276,206 $1,311,767 $1,261,440 (3.8)% 

 

Unexpended Appropriations $26,531 $28,524 $32,487 $31,400 $35,038 11.6%

Cumulative Results of Operations (28,213) (5,316) (23,428) (76,291) (54,427) (28.7)

Net Position $(1,682) $23,208 $9,059 $(44,891) $(19,389) (56.8)

Total Liabilities & Net 

Position $1,136,919 $1,221,694 $1,285,265 $1,266,876 $1,242,051 (2.0)% 

Table 10: Statements of Net Cost

(Summarized) 

Fiscal Years 2016–20

(Dollars in millions)

Asset FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Percentage 

Change9

Gross Cost $93,032 $73,771 $71,232 $144,865 $171,245 18.2%

Less: Earned Revenue (34,260) (35,825) (36,224) (36,820) (39,384) 7.0

Net Cost of Operations $58,772 $37,946 $35,008 $108,045 $131,861 22.0%

8 The percentage change is calculated as the difference between FY 2019 and FY 2020, divided by the FY 2019 amount. In some 

instances, where the current-year amount has an opposite sign to the prior-year amount, the percentage change may be negative 

even though the annual change is positive (and vice versa). Similarly, if the current-year negative amount has a larger negative 

value than the prior-year negative amount, the difference will be negative, but the percentage change will be positive.

9 Refer to Footnote 6.
34 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Balance Sheet

The Balance Sheet presents the recorded value of assets and liabilities retained or managed by 

FSA as of a specific point in time. The assets represent resources available for use by FSA to pay 

its liabilities or to satisfy its future service needs. The liabilities are amounts FSA owes, the 

probable and measurable future outflows of its resources arising from past transactions or events. 

The difference between the assets and the liabilities represents FSA’s net position.

The consolidated Balance Sheet shows that FSA had total assets of $1,242.1 billion as of 

September 30, 2020, a decrease of $24.8 billion, or 2.0 percent under the September 30, 2019 

total assets balance of $1,266.9 billion. The difference resulted primarily from a 12.3 percent 

increase in Fund Balance with Treasury ($7.7 billion), combined with a 2.0 percent decrease in 

net Credit Program Receivables ($32.5 billion). Together, FSA’s Fund Balance with Treasury 

and its net Credit Program Receivables accounted for approximately 99.9 percent of Total 

Assets as of September 30, 2020, as illustrated in the Composition of Assets chart (Figure 9). 

The Comparison of Assets chart (Figure 10) presents changes in these two principal Balance 

Sheet line items over the past five fiscal years.

Figure 9: Composition of Federal Student Aid Assets*

Fiscal Years 2016–20

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Figure 10: Comparison of Federal Student Aid Assets*

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.
Fiscal Year 2020 Annual Report | Federal Student Aid 35

Analysis of Financial Statements 

Credit Program Receivables, Net. FSA’s Credit Program Receivables, Net balance of 

$1,169.6 billion balance as of September 30, 2020, represents FSA’s most important asset 

category and accounted for almost 95 percent of Total Assets. This balance includes 

$1,330.2 billion in principal, interest, and fees, less an allowance for subsidy cost of 

approximately $160.6 billion that adjusted the loan portfolio to its estimated present value. FSA 

reports the total amount under the three major program categories Direct Loan, FFEL, and 

Other, as illustrated in Figure 11 below and discussed more fully in the following sections.

Figure 11: Total Federal Student Aid Loan Portfolio*

Net of Allowance for Subsidy

Fiscal Years 2016–20

(Dollars in Billions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Figure 11 also shows that over the four-year period 2016–20, FSA’s portfolio of FSA net credit 

program receivables increased by $94.4 billion or 8.8 percent. The Direct Loan program 

accounted for most of this change, increasing by $141.6 billion (14.8 percent), offset by the 

$47.5 billion (41.3 percent) reduction of the FFEL Portfolio over the same period. However, the 

overall upward trend reversed in FY 2020 when the $9.4 billion (12.2 percent) net reduction in 

FFEL net credit program receivables coincided with the $23.2 billion (2.1 percent) decrease in 

Direct Loan credit program receivables. The overall reduction in FSA’s net credit program 

receivables portfolio was $32.5 billion or 2.7 percent.

The directional changes observed in the Direct Loan and FFEL portfolios are principally related 

to the impact of the SAFRA Act, which as of June 30, 2010, eliminated all new loan originations

under the FFEL Program in favor of direct lending. Loan consolidation has also played a role.

Consolidation is the process of combining one or more federal student loans into one loan. For 

more information about which federal loans may be eligible for consolidation and other 

requirements, please visit StudentAid.gov/consolidation. Another significant factor in 

FY 2020 was a decrease to the allowance for subsidy cost by $97.7 billion (almost 38 percent). 

The reasons for the adjustment to the subsidy cost estimate are explained in Note 5. 
36 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Direct Loan Credit Program Receivables, Net. Direct Loan Credit Program receivables 

continue to be the major component of FSA’s credit program receivable portfolio in FY 2020. As 

of September 30, the $1,100.5 billion Direct Loan portfolio ending balance comprises 

94.2 percent of FSA's total credit program receivables net, compared to the prior year ending 

balance of $1,123.7 that represented 94.9 percent. The FY 2020 Direct Loan ending balance 

total includes $1,316.9 billion in principal, interest, and fees, with an allowance for subsidy cost 

to the government of $216.4 billion. This amount contrasts to the prior year where the subsidy 

costs were projected at $124.5 billion on Direct Loan principal, interest, and fees of 

$1,248.2 billion. The factors that contributed to the variance in subsidy cost at a time when the 

underlying loan balances increased by 5.5 percent are addressed in Note 5. 

The FY 2020 $68.7 billion increase in Direct Loan Receivables (before subsidy costs) was 

mainly driven by the growth in the outstanding amount owed by borrowers, principally resulting 

from new loan originations ($86.1 billion), consolidation disbursements ($30.4 billion), and the 

net increase in accrued interest and fees ($8.8 billion). This was offset by reductions to principal 

due to loan payments by borrowers ($53.1 billion), loan discharges ($7.7 billion), and other

adjustments. 

The growth in principal outstanding has accounted for virtually all growth of the Direct Loan 

portfolio over the past five years in dollar terms, as seen in Figure 12. Over the same period, 

Table 12 shows that accrued interest increased at a higher average annual rate than did 

principal outstanding (8.9 percent versus 20.3 percent), although, as illustrated by Table 11, 

accrued interest only increased from 5.3 percent to 8.4 percent of the net receivable amount, 

while principal outstanding increased from 94.1 percent to 111.3 percent of the net amount. See 

Note 5 for more details.

Figure 12: Components of Direct Loan Receivables, Net*

Fiscal Years 2016–2010

(Dollars in Billions) 

10 Line items may include rounding adjustments to reconcile to the total amount being reported. Recipient numbers come from the 

Data Center or NSLDS. See Footnote 12 
Fiscal Year 2020 Annual Report | Federal Student Aid 37

Analysis of Financial Statements 

Figure 12 also includes the number of recipients corresponding to the outstanding loan portfolio

at each fiscal year end. Recipients are students that benefit from the federal student loans. In 

most cases, a recipient is the borrower; but in the PLUS loans, the parent is the borrower, and 

the student is the recipient. The chart shows that Direct Loan recipients grew from 31.5 million 

to 35.9 million over the five-year period, reflecting, as reported in Table 12, an average annual 

increase of 3.3 percent, well below the rate of increase of principal and interest described 

earlier. As a result, the average debt (principal and interest) balance outstanding per Direct 

Loan recipient increased by 21.1 percent during this time, from $30,273 to $36,682; the higher 

debt burden per student is likely an indication of increasing postsecondary education costs.

Table 11: Components of Direct Loan Credit Program Receivables, Net by Percentage*

Fiscal Years 2016–20

Direct Loan Component FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Principal* 94.1% 95.9% 97.2% 103.7% 111.3%

Accrued Interest 5.3% 5.7% 6.5% 7.4% 8.4%

Allowance for Subsidy 0.6% (1.6)% (3.7)% (11.1)% (19.7)% 

Net Receivable 100.0% 100.0% 100.0% 100.0% 100.0%

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Table 12: Increase in Principal, Interest and Subsidy Components of Direct Loan Credit 

Program Receivables, Net and Recipient Counts*

Direct Loan 

Component FY 2016–17 FY 2017–18 FY 2018–19 FY 2019–20

FY 2016–20

Average Year-toYear Change

Principal 10.6% 8.5% 7.5% 5.1% 7.9%

Accrued Interest 17.7% 21.0% 15.7% 10.6% 16.1% 

Allowance for Subsidy (415.1)% (143.1)% (206.7)% 73.8% (172.8)% 

Net Receivable 8.6% 7.1% 0.8% (2.1)% 3.6% 

Total Recipients 4.8% 3.6% 2.6% 2.3% 3.3% 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

While the Direct Loan portfolio has grown rapidly in recent years, it has also changed in 

character as an increasing proportion of students begin the repayment phase of their loans. 

Under Title IV, each loan may pass through several distinct statuses as the student progresses 

through the loan life cycle, from borrowing to repaying.

Repayment on most federal student loans is not required while the student recipient is “In 

School” unless they drop below half-time enrollment. However, PLUS loans enter repayment as 

soon as the loan is fully disbursed. Then, after the student graduates, leaves school, or drops 

below half-time enrollment, student borrowers are frequently entitled to a “Grace” period. During 

this period, repayment is not required to begin on the loan. Not all federal student loans have a 

grace period and for most loans, interest will accrue during the grace period. At the end of the 

grace period, the loan will enter “Repayment” status and regular monthly payments will be 

required according to an agreed upon payment schedule. If the borrower continues to make 

timely payments such that no more than 30 days elapse after the due date without payment, 

then the loan is classified as “Current.” If more than 30 days elapse, then the loan will be 

reclassified as “Delinquent.” Under Title IV, if more than 270 days pass without payment being 
38 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

received to satisfy the oldest payment due, Direct Student Loans are technically considered “In 

Default”.

11 The status continues to be tracked through the life of the loan until the loan is paid in 

full or otherwise closed out.

On March 20, 2020, the Secretary directed the FSA to provide the following relief on 

Department-held federal student loans: suspend loan payments; stop collections on defaulted 

loans; and set interest rates to 0 percent for a period of 60 days. This relief was provided 

retroactively to borrowers beginning on March 13, 2020. On March 27, 2020, Congress passed, 

and the President signed into law, the CARES Act, which extended the above described relief 

measures and provided additional relief measures through September 30, 2020. On August 8, 

2020, the President directed the Secretary to continue to provide relief for Department-held

loans until December 31, 2020. The Department has extended the relief provided to borrowers 

in the CARES Act through December 31, 2020. The relief provided to borrowers from March 13, 

2020 through March 26, 2020, and from October 1, 2020 through December 31, 2020, was 

provided under the Secretary’s authority in the Higher Education Relief Opportunities for 

Students Act of 2003. 

Figure 1312 divides FSA’s portfolio of direct loans into two main categories, based on repayment 

status. For the purpose of this discussion,

13 loans are classified as “In Repayment” if, under the 

terms of the promissory note, the loan is current, delinquent, defaulted, in non-defaulted 

bankruptcy, or in a disability status. Alternatively, loans are classified as “Not in Repayment” if 

the borrower is “In School”, “In Grace”, or has been granted a deferment or a forbearance. The 

loan status “Deferment” includes loans for which payments have been postponed due to certain 

circumstances, such as returning to school, military service, or economic hardship. Similarly, 

“Forbearance” includes loans for which payments have been temporarily suspended or reduced 

because of certain types of financial hardships. Figure 13 reports the portfolio balance as the 

sum of principal and interest balances (i.e., the gross amount) owed by the borrower and 

excludes any subsidy cost or allowance that would adjust the outstanding balance to its net 

present value.

As can be seen in Figure 13, although both segments grew during the period FY2016–19, the 

“In Repayment” segment grew more rapidly to become the larger portfolio segment. During this 

period the “In Repayment” segment grew to represent 65.7 percent of the total principal and 

interest amount outstanding, increasing the need for FSA to facilitate the ability of Direct Loan 

borrowers to meet their repayment obligations timely.

The September 30, 2020 balance of loans in repayment of $146.6 billion (11.1 percent of the 

total direct loan portfolio) is significantly less than the $820.1 billion (65.7 percent) as of 

September 30, 2019. The dramatic decline in this segment reflects the impact of COVID-19 and 

11 FSA’s policy is to not transfer such loans to the defaulted debt servicer until more than 360 days pass without payment being 

received, in order to ensure parity of Direct Loan borrower treatment with that of FFEL borrowers. 12 FY 2015–18 data are based on data published by the FSA Data Center, StudentAid.gov/portfolio. FY 2019 data are taken 

directly from the NSLDS. Also, the FY 2018 data published in the FY 2018 Annual Report, taken directly from NSLDS, have been 

replaced with data subsequently published by the Data Center.

13 The In Repayment/Not in Repayment classifications used for this discussion are slightly different from the definitions under 

34 CFR §§ 685.207, 685.204, and 685.205 which specify that a borrower first enters repayment before receiving a deferment or 

forbearance. Under 34 CFR § 685.205(a), borrowers in forbearance may still make payments on their loans. In addition, under 

34 CFR Part 668 Subpart N, borrowers in a deferment or forbearance are considered to be in repayment for purposes of calculating 

the cohort default rate for institutions.
Fiscal Year 2020 Annual Report | Federal Student Aid 39

Analysis of Financial Statements 

the CARES Act which placed most borrowers into administrative forbearance through 

December 31, 2020.

Figure 13: Direct Loan Portfolio by Repayment Status*

Principal and Interest Only 

Fiscal Years 2016–20

(Dollars in Billions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. Also, prior data may be 

restated, as explained in Footnote 12.

In the following Figures 14A and 14B, the Direct Loan portfolio of “In Repayment” principal and 

interest has been subdivided into three categories, “Current”, “Delinquent”, and 

“Default/Bankruptcy/Other”, as those terms are defined above.

Figure 14A: Direct Loan Portfolio Segment in Repayment by Status*

Principal and Interest Only 

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. Also, prior data may be 

restated, as explained in Footnote 12.
40 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Figure 14B: Direct Loan Portfolio Segment in Repayment by Status*

Principal and Interest Only 

Fiscal Years 2016–20

(Percentage of Total)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. Also, prior data may be 

restated, as explained in Footnote 12.

Regarding the “In Repayment” segment amounts as of September 30,2020, $0 in loan principal 

is in delinquent status (0 percent) as compared to $90.9 (11.1 percent) as of September 30, 

2019. Also, regarding the “In Repayment” segment amounts as of September 30, 2020, 

$131.9 billion (90.0 percent) in loan principal was in default/bankruptcy/other status compared to 

$134.5 billion (16.4 percent) as of September 30, 2019. The dramatic changes in these 

segments from 2019 to 2020 were due to the impact of the CARES Act and Presidential 

Directives which suspended borrower payments through December 31, 2020.

For related performance information about the percentage of borrowers more than 90 days 

delinquent, please see Performance Metric 5.3.C located in the Annual Performance Report 

section.

The portfolio of Direct Loan principal and interest receivables “Not in Repayment” can also be 

further subdivided based on the reason why the debt is not currently subject to repayment.

Figures 15A and 15B14 subdivide this segment into two such categories, “In School, Grace 

Period, and Education Deferments” and “Forbearance/Noneducation Deferments”, as defined 

earlier.

Figure15A shows that the amount of Direct Loan principal and interest categorized as “In

School, Grace Period, and Education Deferments” has remained relatively consistent, 

$289.5 billion in FY 2016 to $282.8 billion at the end of the current year. This slight decrease 

reflects a decline in new Direct Loan disbursements over the period, and the aging of the Direct 

Loan portfolio of principal and interest receivable, as a greater proportion of debt moved from “In 

School, Grace Period, and Education Deferments” category to the “In Repayment” segment.

Figure 15B indicates that during the four-year period FY 2016–19, the “Forbearance and

Noneducation Deferments” segment grew from $106.6 billion to $133.2 billion, increasing from 

26.9 percent to 31.1 percent of the “Not in Repayment” segment. However, during the 

14 Please refer to footnotes 11 and 12. 
Fiscal Year 2020 Annual Report | Federal Student Aid 41

Analysis of Financial Statements 

FY 2016–19 period, as a percentage of the total portfolio of Direct Loan principal and interest 

receivables, the “In Deferment/Forbearance” portion has declined from 11.1 percent to 

10.7 percent.

Figures 15A and 15B illustrate the dramatic impact of the CARES Act and Presidential 

Directives. “In School, Grace Period, and Education Deferments” amounts decreased from 

$294.8 billion as of September 30, 2019 to $282.8 billion as of September 30, 2020. However, 

the “Forbearance and Noneducation Deferments” amounts increased from $133.2 billion as of 

September 30, 2019 to $887.5 billion as of September 30, 2020. 

Figure 15A: Direct Loan Portfolio Segment not in Repayment by Status*

Principal and Interest Only

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Figure 15B: Direct Loan Portfolio Segment not in Repayment by Status*

Principal and Interest Only

Fiscal Years 2016–20

(Percentage of Total)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.
42 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

FSA FFEL Credit Program Receivables, Net. FSA’s portfolio of FFEL loans includes debt 

acquired under the Conduit, Loan Participation Purchase, and Loan Purchase Commitment 

Programs established through the FY 2008 ECASLA law and referred to collectively as the 

FFEL ECASLA Loan Programs. It also includes debt acquired under the “traditional” (NonECASLA) defaulted guaranteed loan programs, known collectively as the “FFEL Guaranteed” 

portfolio segment. Changes in these FFEL loan portfolio segments over the past five fiscal years 

are shown in Figure 16.

Figure 16: Total Federal Student Aid FFEL Loan Portfolio***

Fiscal Years 2016–20

(Dollars in Billions)

*FFEL, Guaranteed (Non-ECASLA) Program

**FFEL, ECASLA Acquired Loan Program

***Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Figure 16 illustrates that with $46.3 billion outstanding, the ECASLA FFEL portfolio segment 

remains the major component of the FFEL Guaranteed portfolio of net credit program 

receivables as of September 30, 2020 but declined by $36.6 billion (44.1 percent) during the 

five-year period shown. This decrease was mainly the result of collections of principal and the 

impact of borrowers consolidating their loans under the Direct Loan Program, to take advantage 

of more favorable repayment options available in that program. 

The ECASLA FFEL portfolio declined from $53.7 billion as of September 30, 2019 to 

$46.3 billion as of September 30, 2020 ($7.4 billion). Outstanding principal declined $4.6 billion 

to $48.1 billion and the subsidy allowance increased by $4.1 billion to $11.0 billion. These 

amounts, which reduce the net receivable balance, were offset by an increase in the interest 

receivable of $1.3 billion to $9.2 billion. Despite this decrease, the proportion of ECASLA FFEL 

loans were approximately 70 percent of the total $67.4 billion of FFEL loans outstanding as of 

the current year-end.
Fiscal Year 2020 Annual Report | Federal Student Aid 43

Analysis of Financial Statements 

Over the same five-year period, the smaller FFEL Guaranteed portfolio declined from 

$32.0 billion to $21.1 billion. The FFEL Guaranteed portfolio declined from $23.1 billion as of 

September 30, 2019 to $21.1 billion as of September 30, 2020 ($2.0 billion). Outstanding 

principal declined $0.8 billion to $36.7 billion and the subsidy allowance increased by $1.7 billion 

to $30.5 billion. These amounts, which reduce the net receivable balance, were offset by an 

increase in the interest receivable of $0.5 billion to $14.9 billion. 

The overall impact of changes in the principal, accrued interest, and subsidy components of the 

FFEL portfolio are shown below in Figure 17.

15 The reduction in FFEL recipients during the 

period FY 2016–20 also demonstrates the impact of debt consolidations and refinancing on the 

outstanding portfolio balance.

Figure 17: Components of Federal Student Aid FFEL Receivables, Net

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Other Credit Program Receivables, Net. As shown in Figure 18 below, TEACH Grants, 

Perkins Loans, and HEAL Loans make up the third segment of Credit Programs Receivable, net 

that FSA reports on its balance sheet.

15 Recipients in Millions for FY 2015–18 are based on data published by the FSA Data Center, at StudentAid.gov/portfolio.

FY 2019 data are taken directly from NSLDS. Also, the FY 2018 data published in the FY 2018 Annual Report, taken directly from 

NSLDS, have been replaced with data subsequently published by the Data Center.
44 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Figure 18: Federal Student Aid Other Loan Portfolio

Fiscal Years 2016–20

(Dollars in Millions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

This segment, known as Other Credit Program Receivables, Net, increased by 14.5 percent 

during the past five years, but still accounted for only 0.1 percent of FSA’s total loan portfolio 

throughout that period. Other Credit Program Receivables, net ended FY 2020 with a balance of 

$1.7 billion, a $214.5 million increase compared to the prior year-end.

Composition of FSA Liabilities. FSA’s liabilities represent probable and measurable future 

outflows of resources arising from past transactions or events. As of September 30, 2020, FSA 

had total liabilities of nearly $1.3 trillion, a decrease of $50.3 billion or 3.8 percent less than the 

September 30, 2019 total, in contrast to the 2.0 percent reduction in FSA’s total assets.

Debt. FSA’s debt is the primary component of its liabilities, accounting for 99.1 percent of the 

total. FSA’s debt balance of approximately $1.3 trillion as of September 30, 2020 is 2.9 percent 

less than the prior-year amount. As shown in Figure 19, the Direct Loan Program was the 

principal debt component throughout the FY 2016–20 period and ended FY 2020 with a balance 

of nearly $1.2 trillion, 0.8 percent above the prior-year amount, representing 92.8 percent of 

total debt.
Fiscal Year 2020 Annual Report | Federal Student Aid 45

Analysis of Financial Statements 

Figure 19: Comparison of Federal Student Aid Debt

Fiscal Years 2016–20

(Dollars in Billions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

FSA borrows funds from Treasury to support the disbursement of new loans, and for the 

payment of credit program outlays and related costs. FSA then makes repayments after 

considering its cash position and liability for future cash outflows, as mandated by the Federal 

Credit Reform Act of 1990 (FRCA). The net impact of these activities on the outstanding debt 

portfolio are illustrated for the Direct Loan and FFEL Programs in Figures 20 and 21 

respectively.

Figure 20: Direct Loan Program Net Financing Activity

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

Direct Loan net financing activity (Figure 20) also accounted for most of the overall increase in 

FSA’s outstanding debt level during the same five years. By comparison, in the absence of any 

borrowing for new loan disbursements (Figure 21), FFEL-related debt decreased consistently 

from FY 2016–20. These changes in net financing activity for Direct Loan and FFEL Programs 

reflect the impact of the SAFRA Act on disbursements, interest rate driven loan consolidations, 

and related changes in estimated subsidy costs.
46 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Figure 21: Federal Student Aid FFEL Loan Program Net Financing Activity

Fiscal Years 2016–20

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.
Fiscal Year 2020 Annual Report | Federal Student Aid 47

Analysis of Financial Statements 

Statement of Net Cost

The Statement of Net Cost is the federal financial statement that presents the net cost of 

operations for FSA programs. FSA’s net cost is the gross cost incurred during its operations 

less any exchange (i.e., earned) revenues earned from its activities. Gross cost is composed of 

the cost of credit programs, grant programs, and operating costs. Exchange revenues are 

primarily interest earned on credit program loans.

Figure 22: Composition of Federal Student Aid Net Cost

Fiscal Years 2016–20

(Dollars in Billions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported.

As shown in Figure 22, FSA’s earned revenues (mainly interest and fee accruals net of subsidy 

amortization) increased from $34.2 billion in FY 2016 to $39.4 billion in FY 2020, an overall 

increase of 15.2 percent or about 3.8 percent annually on average. By comparison, FSA’s gross 

costs fluctuated much more widely over the same period, from $93.0 billion in FY 2016 to 

$171.2 billion in FY 2020, mainly as the result of subsidy-related transactions. As a result, net 

costs fluctuated also, most notably increasing 22.0 percent from $108.1 billion reported in 

FY 2019 to $131.8 billion in FY 2020. FSA’s total costs exceeded its earned revenues in both 

years, but the margin was greater in FY 2020 by $23.7 billion, of which $39.4 billion was 

attributable to the Direct Loan Program, largely offset by the $10.6 billion decrease in FFEL net 

costs. 

For the Direct Loan Program, the $39.4 billion increase in net costs was primarily the result of 

an increase in subsidy transfer modifications ($39.6 billion). Similarly, the $10.6 billion decrease

in FFEL Program net costs was mostly the result of a $10.3 billion increase in gross costs.

Both the FFEL and Direct Loans Programs are mandatory programs whose costs are largely 

driven by Federal borrowing costs, prevailing interest rates, in-school interest benefits for 

borrowers, the costs related to borrower defaults, and loan volume demand. The programs are 

funded by mandatory and indefinite budget authority and therefore do not receive annual 

appropriations. For more details regarding the inherent difficulty of estimating the impact of 

these complex factors, please refer to Note 5.
48 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Financial Statements 

Statement of Changes in Net Position

The Statement of Changes in Net Position presents those amounts that caused the net position 

section of the Balance Sheet to change from the beginning to the end of the reporting period 

and is affected by changes in its two components, cumulative results of operations and 

unexpended appropriations.

FSA’s net position as of September 30, 2020, was negative $19.4 billion, an increase of 

$25.5 billion compared to the previous September 30 net position. The difference reflects an 

increase in the cumulative results of operations by the amount of $21.9 billion, from 

$(76.3) billion, to $(54.4) billion, of which $(8.0) billion of the increase related to the Direct Loan 

Program and $(14.0) billion was attributable to the FFEL Program. In addition, unexpended 

appropriations increased by $3.6 billion, of which $2.9 billion were attributable to the combined 

Perkins Loan and Grants Programs, with the $0.9 billion increase in Direct Loan Program 

unexpended appropriations accounting for most of the remaining difference.

Statement of Budgetary Resources

The Statement of Budgetary Resources compares the budgetary resources provided with the 

status or execution of those resources. It also details the composition of the resources and 

shows the amount of net outlays. Appropriations are available to cover the subsidy cost of each 

loan program and administrative expenses. Subsidy expense represents the difference between 

the net present value of expected future cash flows and the face value of each loan portfolio. 

Appropriation authority is available as needed on a permanent basis to finance costs resulting 

from loans guaranteed in the years before FY 1992. The Pell Grant Program receives 

appropriations to cover actual grant disbursements.

This statement shows that as of September 30, 2020, FSA had $388.9 billion in combined 

budgetary resources, of which $24.4 billion remained unobligated and not apportioned. This 

compared to $306.1 billion in budgetary resources twelve months earlier of which $20.1 billion 

were unobligated and not apportioned. Overall budgetary resources increased by only 

$82.8 billion or 27.0 percent, primarily as the net result of increases in budgetary resources for 

the Direct Loan Program ($60.2 billion) and the increase attributable to the FFEL Program 

($22.8 billion).

FSA’s Net Outlays after Distributed Offsetting Receipts as of September 30, 2020, were 

$104.4 billion, an increase of $7.1 billion or 7.3 percent compared to the prior September 30 

amount of $97.3 billion. The Direct Loan Program accounted for a $7.9 billion increase, with a 

FFEL increase of $1.9 billion and a $2.8 billion decrease attributable to the combined Perkins 

Loan and Grants Programs. FFEL Program activity was mainly due to an increase in net outlays 

($6.6 billion), together with an increase in distributed offsetting receipts ($4.8 billion). Additional 

information is provided in Note 12.
Fiscal Year 2020 Annual Report | Federal Student Aid 49

Analysis of Financial Statements 

Financial Management Highlights

Financial Impact of the Coronavirus Disease 2019 (COVID-19)

In response to the COVID-19 pandemic, Congress enacted the CARES Act on March 27, 2020.

As part of the CARES Act, FSA received $40 million to support efforts related to loan 

forbearance, default collection wage garnishment assistance for student loan borrowers, 

servicing system modifications, systems support of COVID-19 telework, and hiring of temporary 

employees. In FY 2020, FSA obligated $13.9 million, committed approximately $3.0 million, and 

the remaining balance will carry over into FY 2021. 

The CARES Act provided emergency relief measures in the Direct Loan program that included 

suspending loan payments, halting collections on defaulted loans, and setting interest rates to 

0 percent through September 30, 2020. In response, FSA stopped all federal wage 

garnishments and collection actions for borrowers with federally held loans in default, and FSA 

paid approximately 2.3 million refunds of Treasury Offset Program (TOP) and Administrative 

Wage Garnishments (AWG) totaling $2.5 billion. On August 8, 2020, the President directed the 

Secretary to continue these measures until December 31, 2020.

Limitations of Financial Statements

The principal financial statements are prepared to report the financial position, financial 

condition, and results of operations, pursuant to the requirements of 31 U.S.C. § 3515(b). The 

statements are prepared from records of Federal entities in accordance with Federal generally 

accepted accounting principles (GAAP) and the formats prescribed by OMB. Reports used to 

monitor and control budgetary resources are prepared from the same records. Users of the 

statements are advised that the statements are for a component of the U.S. Government.
50 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Systems, Controls, and Legal Compliance 

Analysis of Systems, Controls, and Legal 

Compliance

FSA adheres to the Government Accountability Office (GAO) published guidance on internal 

control and recognizes that internal control is an integral part of managing an organization.

Internal control includes the plans, methods, and procedures used to meet the organization’s 

missions, goals, and objectives. In carrying out these components of internal control, FSA 

supports an environment for performance-based management. Internal control also serves as 

the first line of defense in safeguarding assets and preventing and detecting errors and fraud.

Internal control helps government program managers achieve desired results through effective 

stewardship of public resources.

Internal controls should provide reasonable assurance that the objectives of the agency are 

being achieved in the following categories:

• Effective and efficient operations, 

• Reliability of reporting for internal and external use, and

• Compliance with applicable laws and regulations.16

FSA is responsible for establishing and maintaining effective internal control over reporting and 

financial management systems that meet the objectives of the Federal Managers’ Financial 

Integrity Act of 1982 (FMFIA) and annually assessing the effectiveness and efficiency of its 

internal controls over operations and compliance with applicable laws and regulations in 

accordance with OMB Circular A-123, Management’s Responsibility for Enterprise Risk 

Management and Internal Control (OMB Circular A-123). On June 6, 2018, OMB updated OMB 

Circular A-123, Appendix A, Management of Reporting and Data Integrity Risk, to further align 

to the revised OMB Circular A-123 updated in 2016. FSA continues to coordinate with the 

Department and internally to execute these requirements.

Based on the results of this year’s assessment, FSA reported to the Department’s management 

that its internal control over operations, including internal controls intended to prevent, detect 

and recover improper payments, and compliance with applicable laws and regulations, as of

September 30, 2020, was operating effectively, with one exception noted in the Legal 

Compliance section of the Department’s AFR: Debt Collection Improvement Act of 1996. More 

details about this issue and the efforts being taken to remediate the non-compliance can be 

found in the Department’s AFR. 

In addition, FSA, working with the Department, conducted its current year assessment of the 

effectiveness of internal control in accordance with the requirements of Appendix A of OMB 

Circular A-123, updated on June 6, 2018. OMB Circular A-123, Appendix A provides 

requirements to agencies for conducting management’s assessment of internal control over 

reporting. The Department’s evaluation for FY 2020 did not identify any material weaknesses in 

controls as of September 30, 2020. The scope of FSA’s assessment focuses on new processes 

and processes with high-risk profiles that are tested every year. Processes with lower-risk 

16 Government Accountability Office Standards for Internal Control in the Federal Government, GAO-14-704G, September 10, 

2014, p.5.
Fiscal Year 2020 Annual Report | Federal Student Aid 51

Limitations of Financial Statements 

profiles are reviewed and tested on a 3-year cycle. In FY 2020, FSA continued to rely on audits 

of external service providers conducted by independent public accountants in accordance with 

the Statement on Standards for Attestation Engagements Number 18, Reporting on Controls at 

a Service Organization.

FSA’s participation in the Department's implementation of the requirements of OMB Circular 

A-123, including Appendix A, enables it to continue to build upon its internal control framework. 

This framework will be used in continuing efforts to monitor and improve internal control. Refer 

to the Analysis of Systems, Controls and Legal Compliance section of the Department’s AFR for 

additional information related to management’s assurances and disclosures.

Refer to the Analysis of Systems, Controls and Legal Compliance section of the Department’s 

AFR for information related to the Department's compliance with the FMFIA.

FSA’s financial management systems strategy is formulated and managed as part of the 

Department’s strategy. For details on FSA’s financial management systems strategy, refer to 

the Financial Management Systems Strategy narrative found in the Management’s Discussion 

and Analysis section of the Department’s AFR.
52 Fiscal Year 2020 Annual Report | Federal Student Aid

Analysis of Systems, Controls, and Legal Compliance 

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Fiscal Year 2020 Annual Report | Federal Student Aid 53

Annual Performance Report (Unaudited) 

Annual Performance Report (Unaudited)
54 Fiscal Year 2020 Annual Report | Federal Student Aid

Annual Performance Report (Unaudited) 

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Fiscal Year 2020 Annual Report | Federal Student Aid 55

Overview of the Annual Performance Report 

Overview of the Annual Performance Report

The Annual Performance Report section of the Annual Report provides detailed performance 

information on FSA’s progress in achieving the goals and objectives described in the 

FY 2015–19 Strategic Plan and the draft FY 2020-24 Strategic Plan. This section also includes 

reports on other areas of performance that are required by the Higher Education Amendments 

of 1998. The subsections of the Annual Performance Report are listed and briefly discussed 

below: 

• Introduction to the Annual Performance Report: The Introduction to the Annual 

Performance Report provides an overview of the Annual Performance Report and 

includes a high-level summary of the FY 2020–24 Strategic Plan. 

• Performance Results by Strategic Goal: This subsection details the results of each 

overall strategic goal by performance metric. Each performance metric includes a table 

that presents five years of data results, where available, its current target and results. 

The performance metric section also includes a discussion of the metric’s target context, 

analysis of progress, and data quality limitations. 

• Fiscal Year 2020 Accomplishments of Federal Student Aid: This subsection 

describes additional accomplishments that were not measured by the performance 

metrics included in the strategic plan but were the result of initiatives that FSA undertook 

to support the implementation of the strategic plan or legislative changes. 

• Legislative and Regulatory Recommendations: This subsection details legislative 

and regulatory recommendations that FSA provided to the Department in support of the 

Department’s regulatory activities.

• Annual Bonus Awards: This subsection discusses executive compensation at FSA in 

compliance with the legislative requirements under the PBO legislation that created FSA.

• Report of the Federal Student Aid Ombudsman: The report discusses the FSA 

Ombudsman’s activities in accomplishing its statutory mission of addressing complaints 

about Title IV financial aid programs.
56 Fiscal Year 2020 Annual Report | Federal Student Aid

Overview of the Annual Performance Report 

Introduction to the Annual Performance Report

In FY 2019, FSA embarked on the journey to guide the organization towards more effectively 

achieving its vision “To be the most trusted and reliable source of student financial aid, 

information, and services in the nation.” This effort culminated into an organizational five-year 

performance plan that better aligned with the vision and established the framework to create a 

more student-focused, agile, and transparent organization. For the development of the 

FY 2020–24 Strategic Plan, FSA worked throughout the fiscal year to also coordinate the 

closing of FSA’s FY 2015–19 Strategic Plan on September 30, 2019. In compliance with the 

PBO legislation, FSA has offered a public comment period for external stakeholders, such as 

students, institutions of higher education, Congress, lenders, and other key parties. The public 

comment period for the draft plan ends on October 23, 2020. FSA will review and incorporate 

comments as appropriate and plans to publish the FY 2020–24 Strategic Plan by December of 

Calendar Year 2020.

In conjunction with this effort and to ensure a consistent transition with the previous FY 2015–19

Strategic Plan, FSA is utilizing eight existing performance metrics within the draft FY 2020–24 

Strategic Plan. FSA also aligned these metrics with goals and objectives in a specific manner to 

reinforce the performance expectations in key areas. Due to these changes, FSA also 

discontinued the utilization of five performance metrics from the FY 2015–19 Strategic Plan. 

FSA will no longer use these performance metrics to measure organizational progress (refer to 

the Table 13: Crosswalk between FY 2015-19 and FY 2020-24 Strategic Plans, for the 

discontinued performance metrics). Therefore, in FY 2020, FSA’s performance is measured

against the strategic goals, objectives and performance metrics established in the FY 2020–24 

Strategic Plan. 

In the FY 2020 Annual Performance Report, FSA provides the results associated with both the 

36 new performance metrics introduced in the draft FY 2020–24 Strategic Plan, as well as the 8 

existing metrics discussed earlier. The performance framework established within the draft 

FY 2020–24 Strategic Plan encompasses all areas of business and offers a renewed focus on 

data-driven decisions that will enable positive outcomes for customers, other stakeholders, and 

taxpayers. By making advances in performance accountability, FSA is working to be a more 

transparent organization.

FSA is required, by the PBO-enabling legislation, to report annually its level of performance and 

the associated results. This section, the Annual Performance Report, satisfies this annual 

reporting requirement. For additional performance-related information—including a more 

complete discussion of FSA’s mission, organization, and performance management—refer to 

the Management’s Discussion and Analysis section of this document. To read more about 

FSA’s strategic plans, refer to StudentAid.gov/strategicplan. 

To review the performance metrics transitioned and discontinued from the FY 2015–19

Strategic Plan, refer to the Crosswalk between FY 2015–19 and FY 2020–24 Strategic Plans. 
Fiscal Year 2020 Annual Report | Federal Student Aid 57

Fiscal Year 2020 Organizational Performance 

Table 13: Crosswalk between FY 2015–19 and FY 2020–24 Strategic Plans

Performance Metrics FY 2015–19 Plan Disposition in FY 2020–24 Plan 

A.1 Percent of First-Time FAFSA® Filers Among 

High School Seniors 

2.1.B Percentage of high school seniors 

submitting the FAFSA®. 

A.2 Persistence Among First-Time Filing Aid 

Recipients 

5.1.E Persistence among first-time filing aid 

recipients.

A.3 Customer Visits to StudentAid.gov 

2.1.A Number of visits (sessions) demonstrating 

adoption of the updated StudentAid.gov 

site.

A.4 Social Media Channel Subscribership Discontinued in FY 2020

A.5 ACSI Aid Life Cycle Surveys 2.2.G American Customer Satisfaction Index 

(ACSI) Aid Lifecycle Survey score.

B.1 Improper Payment Rate Discontinued in FY 2020

B.2 Percent of Borrowers > 90 Days Delinquent 5.3.C Percent of Borrowers > 90 Days 

Delinquent.

C.1 Aid Delivery Costs Per Application Discontinued in FY 2020

C.2 Outstanding Direct Loan Portfolio in Current 

Repayment Status 

5.1.C Outstanding Direct Loan Portfolio in 

Current Repayment Status.

D.1 Ease of Doing Business with FSA 3.2.D Ease of doing business with FSA.

D.2 Percentage of Contract Dollars Competed by 

FSA Discontinued in FY 2020

D.3 Collection Rate Discontinued in FY 2020

E.1 Employee Engagement Index 

1.1 Improve Federal Employee Viewpoint Survey 

score: Employee Engagement Index. FSA’s 

scores will improve the first year and 

continue to increase 1–2% annually.
58 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Performance 

Federal Student Aid Strategic Goals, Performance Metrics, and 

Results

Table 14: Fiscal Year 2020 Strategic Goals, Performance Metrics, and Results

Strategic Goal 1: Empower a High-Performing Organization

Strategic Objective 1.1: Improve employee engagement and workplace inclusion to develop 

and retain talent, improve employee satisfaction, and engage in 

effective succession planning.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

1.1 Improve Federal Employee Viewpoint Survey score: 

Employee Engagement Index. FSA’s scores will improve 

the first year and continue to increase 1–2% annually.

62––63% N/A N/A

Strategic Objective 1.2 Expand employee skills and capabilities to support Next Gen FSA.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

1.2.A Identification, validation, assessment, and prioritization 

of skill competencies, required grades, and strategic 

alignment in accordance with the workforce 

requirements study results.

50% 58.2% Met

1.2.B Development of a multi-year, targeted, training and 

development plan. Baseline N/A N/A

1.2.C Perform a training analysis at each performance review 

period within the fiscal period. Baseline 27 N/A

Strategic Goal 2: Provide World-Class Customer Experience to the Students, 

Parents, and Borrowers We Serve

Strategic Objective 2.1: Ensure that all students can easily access information on federal 

student aid, apply for federal student aid, and have information on 

repayment options.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

2.1.A Number of visits (sessions) demonstrating adoption of 

the updated StudentAid.gov site. 190 million 217 million Met

2.1.B Percentage of high school seniors submitting the 

FAFSA. 66% 63.8% Not Met

2.1.C Number of customers submitting the FAFSA via a mobile 

platform—the myStudentAid mobile app or fafsa.gov.

2.4 million 

submissions

2.5 million 

submissions Met
Fiscal Year 2020 Annual Report | Federal Student Aid 59

Fiscal Year 2020 Organizational Performance 

Strategic Objective 2.2: Provide seamless, easy, personalized digital interactions equal with 

top financial institutions in the delivery of financial aid products and 

services.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

2.2.A Number of customers checking loan balances via the 

myStudentAid mobile app. 70,000 133,417 Met

2.2.B Number of borrowers who view their aid summary 

information on StudentAid.gov. Baseline 7.6 million N/A

2.2.C Number of users of “Aidan,” the StudentAid. gov virtual 

assistant. 25,000 545,763 Met

2.2.D Number of borrowers who complete their annual 

certification on time for the Annual Student Loan 

Acknowledgement (ASLA).

Baseline 858,628 N/A

2.2.E Transactional email volume for outreach and 

communications to borrowers. Baseline 92.2 million N/A

2.2.F Recurring campaign email delivery volume for outreach 

and communications to borrowers. Baseline 32.2 million N/A

2.2.G American Customer Satisfaction Index (ACSI) Aid 

Lifecycle Survey score. 72–74 73.5 Met

2.2.H Customer Satisfaction Survey(s) for StudentAid. gov site 

and associated tools.

Survey 

Development

No survey 

developed Not Met

Strategic Objective 2.3: Streamline contact center and back-office operations to improve our 

customers’ integrated experience.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

2.3.A Quality Standard for Average Speed to Answer (ASA) at 

all Call Centers.

60 seconds or 

less 59.0 seconds Met

2.3.B Quality Standard for Abandon Rate (AR) for Incoming 

Calls at all Call Centers. 2% 3.6% Not Met

Strategic Objective 2.4: Simplify the communication and processes associated with 

borrower repayment plans.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

2.4.A Number of borrowers using Make a Payment feature to 

pay student loans.

Implement a 

pilot

Pilot 

implemented 

12, 245 paid

Met

2.4.B Percentage of borrowers using auto-debit. Baseline 24.8% N/A

2.4.C Percentage of Public Service Loan Forgiveness (PSLF) 

applicants who had used the PSLF Help Tool and who 

met the requirements for PSLF.

Baseline N/A N/A
60 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Performance 

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness

Strategic Objective 3.1: Provide effective oversight of FSA’s partners utilizing a 

comprehensive suite of monitoring tools. 

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

3.1.A FSA will annually conduct an Institutional Review for its 

participating partners including schools, third-party 

servicers, and financial institutions.

40% 51% Met

3.1.B Number of Borrower Defense (BD) applications 

adjudicated (subject to existing BD regulations). 150,000 160,000 Met

Strategic Objective 3.2: Strengthen partner engagement and provide effective outreach and 

assistance.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

3.2.A FSA will provide comprehensive training and/or 

specialized technical assistance to its participating 

schools that receive Title IV Aid on behalf of students.

35% 70% Met

3.2.B FSA will measure Partner Participation rates in training 

programs.

Baseline 70% N/A

3.2.C FSA will enhance the self-service training resource and 

informational platform to improve communication with 

participating partners, including schools, third-party 

servicers, and financial institutions.

Baseline 62% N/A

3.2.D Ease of doing business with FSA. 74–76% 71% Not Met

Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards. 

Strategic Objective 4.1: Implement business partner and vendor systems that house, 

manage, and provide systems supporting FSA business processes, 

outreach and awareness focused on oversight, enforcement, 

infrastructure, systems, and data. 

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

4.1 Increase partner/vendor cybersecurity effectiveness by 

reducing the total number of FSA system assessment 

findings by 20% per year.

1,800 3,561 Not Met

Strategic Objective 4.2: Improve student privacy data and cybersecurity controls of 

Institutions of Higher Education (IHEs) through outreach and 

communication, to mitigate future cyber-incidents and breaches.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

4.2.A Increase Institutions of Higher Education cybersecurity 

effectiveness by reducing GLBA cybersecurity noncompliance by 20% per year.Baseline 177 N/A

4.2.B Reduce incident reporting time at Institutions of Higher 

Education. Baseline 87.5 days N/A
Fiscal Year 2020 Annual Report | Federal Student Aid 61

Fiscal Year 2020 Organizational Performance 

Strategic Objective 4.3: Build an effective cybersecurity culture through employee 

awareness, training and accountability focused on protecting 

systems and data.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

4.3 Decrease the number of employee-related cybersecurity 

events associated with inappropriate use, distribution, or 

storage of Personally Identifiable Information (PII) and 

financial information by 20% a year.

1,800 1,713 Met

Strategic Goal 5: Enhance the Management and Transparency of the Portfolio

Strategic Objective 5.1: Improve the management and transparency of FSA’s student loan 

portfolio performance.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

5.1.A Initiate monthly reporting to the public through the FSA 

data center.

Establish 

specific 

number of 

public reports

56 Met

5.1.B Timeliness of FSA’s ability to respond to statutorily 

mandated reports. 30 days or less 30 days or less Met

5.1.C Outstanding Direct Loan Portfolio in Current Repayment 

Status. Baseline 93.7% N/A

5.1.D Percentage of borrowers who are in a positive 

repayment status within the first three years of student 

loan repayment.

Baseline N/A N/A

5.1.E Persistence among first-time filing aid recipients. 83–84% 81.0% Not Met

Strategic Objective 5.2: Provide analytics and operational support for a customer-centric, 

data-driven, performance-based organization.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

5.2.A Using the Enterprise Risk Management (ERM) Maturity 

Model, move the organization towards a “Risk 

Intelligent” position. The model defines organizational 

progress in the following way: 

• 1 = Initial; 

• 2 = Fragmented; 

• 3 = Integrated; 

• 4 = Risk Intelligent.

1.5 1.6 Met

5.2.B Implementation timeline for FUTURE Act. Establish a 

timeline N/A N/A

5.2.C Error rate discovered through income verification 

activities for borrowers on an IDR plan. Baseline N/A N/A
62 Fiscal Year 2020 Annual Report | Federal Student Aid

Fiscal Year 2020 Organizational Performance 

Strategic Objective 5.3: Leverage portfolio analytics to drive improved outcomes for 

customers and taxpayers.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

5.3.A Identify and provide intervention actions for customers at 

risk of default.

Development 

and testing of 

default 

intervention 

program

Developed, 

tested, and 

deployed two 

projects

Met

5.3.B Default rate by borrower count. Baseline N/A N/A

5.3.C Percent of borrowers > 90 days delinquent. Baseline 4.8% N/A

5.3.D Percentage of borrowers who did not make the first 

three payments. Baseline N/A N/A

5.3.E Percentage of customers who borrow less than the 

maximum loan amount. Baseline N/A N/A

Strategic Objective 5.4: Increase vendor performance through quality management activities 

centered on customer service and product delivery.

Performance Metrics FY 2020 

Target

FY 2020 

Actual Result

5.4 Percentage of quality assurance reviews for the external 

workforce (servicers) reviewed annually. 25% 11.1% Not Met
Fiscal Year 2020 Annual Report | Federal Student Aid 63

Performance Results by Strategic Goal 

Performance Results by Strategic Goal

This section presents detailed performance results, which include a discussion of progress 

made to date in achieving the strategic goal and the data used to assess performance.

How the Remainder of this Section is Organized. This section is organized by the five 

strategic goals. For each strategic goal, this section provides an overview of the goal, lists the 

associated objectives that support the strategic goal, and details the performance metrics used 

to measure performance.

• Table: Identifies the performance metric associated with the strategic goal and provides 

the historical actual results for the four previous fiscal years (if available); the target and

actual result for the current fiscal year; and an indicator as to whether FSA met the 

performance metric for each fiscal year reported. The following is the legend for the 

performance result indicator included in the table.

Table 15: Performance Result Indicator Legend

Performance Result Indicator

Performance result met or exceeded the target. Met

Performance result did not meet the target. Not Met

Performance result is not applicable because:

• A target for the performance metric was not developed (i.e., baseline year) or

• The performance metric was not fully implemented, or 

• The required data were not available in time for inclusion, or

• The performance metric is a new metric and prior year results are not available. 

N/A

The performance metric results reported are as of fiscal year-end, September 30, 2020, 

unless otherwise noted. If the required data are not available as of fiscal year-end in time 

for inclusion in this report, data as of the most recent period available are used. Data as 

of fiscal year-end may not be available in some instances, where the required data are 

obtained from external sources including state and private nonprofit guaranty agencies, 

lenders and loan servicers, and grant and loan recipients.

• Target Context: Explains the parameters or rationale for targets, especially where

anomalies exist.

• Analysis of Progress: Provides a discussion of FSA’s progress in meeting its targets

and includes explanations for unmet targets and actions being taken or planned.

• Data Quality and Limitations: Describes the source of data required to calculate the

actual result for the performance metric, any calculation required to determine the actual

result, and any known data quality issues or limitations. For an overview of FSA’s

business process to confirm the quality of performance data, refer to the Quality of 

Performance Data in the Management’s Discussion and Analysis section of this Annual

Report.
64 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Strategic Goal 1: Empower a High-Performing Organization

FSA’s employees are its greatest resource, and their knowledge, skills, and abilities are

essential to building and sustaining a high-performing organization. To meet the expectations 

outlined in the draft FY 2020-24 Strategic Plan, it is essential that staff are trained, aligned, and 

equipped to provide best-in-class customer service while fulfilling the fiduciary responsibilities of 

the organization.

FSA will assess progress toward preparing its workforce using four related metrics under 

Strategic Goal 1. The first metric is designed to improve the Federal Employee Viewpoint 

Survey (FEVS) score, specifically in the Employee Engagement Index. The Index provides an 

assessment of the engagement potential of a work environment.

The second metric focuses on an organizational workforce requirements study that will provide 

FSA with the ability to better forecast human capital needs and inform planning for staff training, 

transfers, promotions, and talent acquisition. The workforce requirements study will also inform 

the third metric: the degree of alignment between the competencies needed for each position 

(as identified in the study), and the competencies of individuals in each job.

Lastly, FSA will measure the effectiveness of employee training through detailed analysis and 

evaluation. Over time, the analysis will help to measure performance growth, provide extant 

data to support developmental resources, and assess the quality and benefits of attended 

training to evaluate the return on investment for the employees and the organization.

Strategic Goal 1 includes the two strategic objectives listed below:

• Strategic Objective 1.1:

Improve employee engagement and workplace inclusion to develop and retain talent, 

improve employee satisfaction, and engage in effective succession planning.

• Strategic Objective 1.2:

Expand employee skills and capabilities to support Next Gen FSA.

In FY 2020, FSA had two objectives under this goal. These objectives included four metrics. Of 

these four metrics, one metric met the target, two metrics were baselined, and one metric did 

not have the required data available to provide an actual result in FY 2020.
Fiscal Year 2020 Annual Report | Federal Student Aid 65

Performance Results by Strategic Goal 

Strategic Objective 1.1: Improve employee engagement and workplace inclusion to develop 

and retain talent, improve employee satisfaction, and engage in effective succession planning.

Table 16: Performance Metric 1.1. Improve Federal Employee Viewpoint Survey score: 

Employee Engagement Index. FSA’s scores will improve the first year and continue to increase 

1–2% annually.* 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 67.4% 69.7% 62.0% 61.0% 62–63% N/A

Performance Result Met Met Not Met Met N/A

*Note: Formerly E.1 in FSA FY 2019 Annual Report. 

Target Context:

The U.S. Office of Personnel Management (OPM) FEVS measures employees' perceptions of 

whether, and to what extent, conditions characteristic of successful organizations are present in 

their agencies. The FEVS serves as a tool for employees to share their perceptions in many 

critical areas including their work experiences, their agency, and leadership. The Engagement 

Index assesses the critical conditions conducive for employee engagement (e.g., effective 

leadership, work which provides meaning to employees, etc.). It is made up of three subfactors: 

Leaders Lead, Supervisors, and Intrinsic Work Experience.

Analysis of Progress:

There is no data currently available for this metric.

The FY 2020 data will be released after January 2021 due to a delay in survey administration by 

OPM. The FY 2020 FEVS began on September 23, 2020 and closed on November 4, 2020. 

FSA analyzed the results of the FY 2019 FEVS survey and focused on communication, 

fundamentals for success (recruiting, staffing, training, and resources), leadership, recognition 

and rewards, and work/life balance as key areas of focus in FY 2020. FSA conducted focus 

groups with 243 managers and staff to inform its Employee Engagement Action Plans 

developed by each organizational business unit.

Data Quality and Limitations:

OPM has been conducting FEVS since 2002 and maintains a 100 percent accuracy rate for 

employee security and data integrity. One limitation is that the survey results are provided in 

real time, and there is at least a one quarter delay in receipt by agencies. This may limit the true 

interpretation of the data, in that leadership changes, employee attrition and a shift in 

organizational priorities may impact the relevance of the data.

In addition, FSA continues operating at a near 100 percent virtual capacity, and the lack of 

direct employee interaction and communication may negatively impact survey participation for 

FY 2020. FSA will continue using focus group data to assist with employee engagement and 

other organizational improvements based on feedback. The data source for this performance 

metric is the FY 2020 FEVS survey.
66 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Strategic Objective 1.2: Expand employee skills and capabilities to support Next Gen FSA.

Table 17: Performance Metric 1.2.A. Identification, validation, assessment, and prioritization of 

skill competencies, required grades, and strategic alignment in accordance with the workforce 

requirements study results.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

50% of

organization

completed

58.2% of

organization

completed

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

FSA worked with a consultant to conduct a workforce requirements study of the process and 

drivers (input and output measures) that influence organizational staffing needs. Data were 

collected through questionnaires and follow-up interviews with managers and subject matter 

experts of various FSA processes.

Analysis of Progress:

FSA met its target for this metric with 58.2 percent of FSA offices and positions being analyzed.

Staffing requirements have been validated and documented for 58.2 percent of the FSA 

workforce for each of 85 organizational entities included in the study population. The entire 

workforce requirements study is anticipated to be completed and fully validated by 

January 2021.

Data Quality and Limitations:

To inform the workforce requirements study, data from FSA’s internal personnel system was 

utilized. The data provided an organizational resource picture (i.e., the number of staff onboard 

by organization, occupation, grade, and/or other attributes). The required number of staff per 

organizational business unit, from which specific staffing needs can be computed, is generated 

from a staffing dashboard developed by FSA’s contractor.

The needs, or staffing gap computation, utilizes current staffing onboard and the numbers 

derived as staffing required to produce a rationale percentage of staff needed. The study is also 

required to assist FSA with tools that will enable tracking of full-time equivalent staff and 

financial execution (i.e., average onboard staffing and aggregate salaries over the course of a 

fiscal year). This calculation, in conjunction with the staffing gap computation, will provide a 

more accurate picture of FSA's requirements and capabilities beyond the historical onboard 

staffing snapshots that have typically been produced.

The initial collection and analysis of workload driver data that will be utilized to determine 

staffing requirements is currently in progress, so full limitations have not yet been identified. The 

data sources for this performance metric are the U.S. Department of Interior Business Center 
Fiscal Year 2020 Annual Report | Federal Student Aid 67

Performance Results by Strategic Goal 

Payroll/Personnel Data, in addition to qualitative interview and resource information from

internal FSA sources.
68 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Table 18: Performance Metric 1.2.B. Development of a multi-year, targeted, training and 

development plan.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

FSA began defining the methodology for the targeted training and development plan by 

identifying the key training programs to be included based on FY 2020 employee participation. 

In FY 2020, 1,118 employees participated in targeted trainings provided by the Workforce 

Development Division (WDD), Project Management training program, FSA Leadership Institute

pilot program, leadership coaching, Executive Services leadership trainings, and Acquisitions 

Directorate.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric.

FSA established a working group to develop the framework for a multi-year training and 

development plan. The working group focused on mission critical competencies essential to the 

performance of FSA and the Next Gen FSA initiative. The working group identified and tracked 

several learning initiatives under the technical skills and leadership/management competencies 

to better understand how FSA is developing and tracking employees needing these skill sets. 

FSA completed three skill gap analyses to identify enterprise-wide skill needs and offer learning 

solutions to address gaps based on industry best practices.

The framework and metrics used to capture FSA’s baseline projections for FY 2020 will be used 

to complete the full multi-year training plan in FY 2021. COVID-19 had an impact on training at 

FSA. Many training programs were converted from classroom-based to virtual instructor-led 

delivery. For FY 2021, FSA plans to develop and/or identify additional courses to provide 

additional learning opportunities with either a virtual instructor or self-paced training. FSA has 

also invested in increasing the number of employees with project management certifications to 

enhance the capabilities of staff in managing the complex projects associated with Next Gen 

FSA.

Data Quality and Limitations:

A combination of quantitative and qualitative data was collected to assess the effectiveness of 

the staff trainings. The Kirkpatrick Level evaluation was one of the major assessment 

instruments used to collect this data. There are four levels to Kirkpatrick Model: Reaction, 

Learning, Behavior, Results. To evaluate training effectiveness, course satisfaction evaluations 

(Kirkpatrick Level 1) were administered via paper or electronic format at the end of trainings. 
Fiscal Year 2020 Annual Report | Federal Student Aid 69

Performance Results by Strategic Goal 

An internal evaluation database was used to track and compare data across training courses to 

identify trends and areas of improvement. The data limitation at present is that only a Kirkpatrick 

Level 1 evaluation is performed post-training, which measures the degree to which participants 

find the training favorable, engaging, and relevant to their jobs. To advance effectiveness of 

effort in the future, a Kirkpatrick Level 2 or Level 3 will be needed.
70 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Table 19: Performance Metric 1.2.C. Perform a training analysis at each performance review 

period within the fiscal period.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 

year

27

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

Sixteen trainings were provided by the WDD, aligned under the leadership/supervision and 

technical skills competencies and the FSA’s Retirement Education learning series contract. An 

additional 11 trainings were provided by WDD leadership initiative pilot, and the Acquisitions 

Directorate.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric.

FSA used various assessment instruments and data sets such as formative and summative 

data collection mechanisms, Kirkpatrick Level evaluations, OPM and the Department

competency models, participant anecdotal feedback, and after-action briefings/reports. Posttraining evaluations were administered via paper or electronically to compare data across 

training initiatives to identify trends and areas of improvement to make real-time modifications 

within the current delivery or in future program/course iterations. For example, WDD developed 

an internal evaluation database to track, monitor, and identify evaluation trend data across 

programs. The Retirement Education learning series has been crucial for the overall 

improvement in the work/life balance of FSA employees’ by providing more in-depth learning 

opportunities to understand retirement, savings, and investment options, such as the Thrift 

Savings Program. The goal of employee training is to not only train them for skill enhancement, 

but also to improve employee knowledge and welfare as it relates to their overall development.

Data Quality and Limitations:

FSA used an internal evaluation database to track and compare data across training iterations 

to identify various performance trends. WDD used various assessment instruments and data 

sets such as formative and summative data collection mechanisms, Kirkpatrick Level 

evaluations, OPM and Department competency models, participant anecdotal feedback, and 

after-action briefings/reports.

To gauge participant knowledge within these specified trainings and allow for application of 

learning to address real-life situations or leadership problems/challenges Kirkpatrick Level 

evaluations were administered during and/or post-training. For the managerial training directed 

at enhancing leadership competencies, action-based learning through individual activities and/or 

group capstone projects was utilized. The limitations of the data are that the analysis of results 

was administered to a subset of trainings offered in specialized areas in FY 2020. The analysis 
Fiscal Year 2020 Annual Report | Federal Student Aid 71

Performance Results by Strategic Goal 

will need to broaden, to increase the results-based approach beyond knowledge acquisition to 

behavioral change to support the training investment across the enterprise.
72 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Strategic Goal 2: Provide World-Class Customer Experience to 

the Students, Parents, and Borrowers We Serve

FSA will modernize its systems and operations to deliver world-class customer and partner 

experiences. These efforts include a single point of connection to assist students and borrowers 

with federal student aid needs, readily available personalized customer information, and 

informed borrower tools for assistance. Based on enhanced customer analytics and customer 

feedback, FSA will continuously update these tools to make sure borrowers understand their 

rights and responsibilities. FSA’s intention is to promote positive repayment behaviors and help 

borrowers understand how they can repay their loans more quickly or at lower cost. Additionally,

FSA will enhance contact center operations and simplify and automate back-office operations to 

reduce errors and accelerate processing. By simplifying these customer-facing processes, 

engaging customers with innovative communication strategies, and providing self-service 

options through the mobile application, FSA will be able to quickly respond to the ever-changing

financial aid environment and consistently be a trusted resource for students and families.

Strategic Goal 2 includes the four strategic objectives listed below:

• Strategic Objective 2.1:

Ensure that all students can easily access information on federal student aid, apply for 

federal student aid, and have information on repayment options.

• Strategic Objective 2.2:

Provide seamless, easy, personalized digital interactions equal with top financial 

institutions in the delivery of financial aid products and services. 

• Strategic Objective 2.3:

Streamline contact center and back-office operations to improve our customers’ 

integrated experience.

• Strategic Objective 2.4:

Simplify the communication and processes associated with borrower repayment plans.

In FY 2020, FSA had four objectives under this goal. These objectives included 16 metrics. Of 

these 16 metrics, 7 were met or exceeded and 3 metrics were not met for this goal. Additionally, 

six metrics are baselined in FY 2020.
Fiscal Year 2020 Annual Report | Federal Student Aid 73

Performance Results by Strategic Goal 

Strategic Objective 2.1: Ensure that all students can easily access information on federal 

student aid, apply for federal student aid, and have information on repayment options.

Table 20: Performance Metric 2.1.A. Number of visits (sessions) demonstrating adoption of 

the updated StudentAid.gov site.*

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 47.2 million 44.3 million 44.5 million 183.7 million 190 million 217 million

Performance Result Met Met Met Met Met

*Note: Formerly A.3 in FSA FY 2019 Annual Report. 

Target Context:

StudentAid.gov is FSA's primary customer-facing digital front door for students, parents, and 

borrowers who need be informed about, apply for, and manage their federal student aid. By 

focusing on total customer visits, this performance metric helps gauge the success of FSA’s 

efforts to become the most trusted and reliable source for accurate student aid information for 

Americans nationwide and engage customers in completing critical tasks related to federal 

student aid.

Analysis of Progress:

FSA met the target for this metric with more than 217 million visits in FY 2020.

In December 2019, a major redesign of StudentAid.gov was completed as part of Next Gen 

FSA which resulted in the integration of content and functionality from StudentLoans.gov,

fsaid.gov, and NSLDS.gov. This effort significantly advanced the goal of providing customers 

with a single front door for information and key tasks related to federal student aid. Additional 

features—such as Aid Summary, Annual Student Loan Acknowledgment, Make a Payment 

pilot, and more—were launched on StudentAid.gov during FY 2020, and additional 

functionality and improvements are planned for FY 2021.

Data Quality and Limitations:

FSA operational systems have procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined. A separate data analyst from a 

different office within FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. The Customer Analytics Group is responsible for the primary 

calculation of the metric as well as the technical validation of the metric, which is done by 

reviewing for accuracy the query used to pull the data. The data is an absolute number so no 

calculation and methodology are performed. The metric value is based on the number of visits 

(as opposed to unique visitors or page views).

The source of the data is FSA’s online platform analytics. The metric is a direct reflection of the 

data platform analytics and FSA constantly monitors the analytics platform to ensure the system 

is secure and the query results are consistent.
74 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Table 21: Performance Metric 2.1.B. Percentage of high school seniors submitting the 

FAFSA.* 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – 67.4% 65.9% 66% 63.8% 

Performance Result N/A N/A Met Not Met Not Met

*Note: Formerly A.1 in FSA FY 2019 Annual Report. 

Target Context:

A primary goal of FSA is to encourage FAFSA completion among high school seniors.

Analysis of Progress:

FSA did not meet the target for this metric with only 63.8 percent of high school seniors 

submitting the FAFSA.

FY 2020 presented two major challenges on that front. For the first half of the FAFSA filing year, 

from October 1, 2019–March 15, 2020, there was near record low unemployment in the United 

States. In periods of low unemployment, FAFSA filing among high school seniors normally 

decreases as the job market offers better opportunities, greater pay, etc. This likely accounted 

for some of the decrease in FAFSA filing from 65.9 percent in FY 2019 to 63.8 percent in 

FY 2020. In March 2020, COVID-19 resulted in most high schools across the country moving to 

an on-line only model, which meant that students were not in the classroom or in school 

buildings with guidance counselors, teachers, coaches, and other cues that reminded them to 

file the FAFSA. Finally, COVID-19 resulted in many low-income families having a change in 

financial circumstances that may have prevented filing of the FAFSA in favor of work 

opportunities to help support the family unit. All these factors likely had an impact on lowering 

FAFSA completion among high school seniors.

Data Quality and Limitations:

FSA operational systems have procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined. A separate data analyst from a 

different office within FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. Queries and calculations are simultaneously conducted on data 

from previous years by FSA’s Business Intelligence Team to ensure technical definitions remain 

consistent. The Customer Analytics Group is responsible for the primary calculation of the 

metric as well as the technical validation of the metric, which is done by reviewing for accuracy 

the query used to pull the data and all calculations made with the data. The data is pulled from 

the FSA’s Central Processing System.

Finally, the Financial Reporting and Analysis Branch is responsible for ensuring that 

documentation is complete and archived. These calculations also restrict the application period 

to the first nine months of the application cycle (through the close of the fiscal year) rather than 

the entire 18 months. Since most applicants, including high school seniors, file their FAFSA

prior to the start of the upcoming academic year (usually before fiscal year end), this decision 
Fiscal Year 2020 Annual Report | Federal Student Aid 75

Performance Results by Strategic Goal 

better aligns the performance metric with the fiscal year where most of the performance 

occurred.
76 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

Table 22: Performance Metric 2.1.C. Number of customers submitting the FAFSA via a mobile 

platform—the myStudentAid mobile app or FAFSA.gov. 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 2.4 million

submissions

2.5 million 

submissions

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

A goal of the Next Gen FSA effort is to provide customers with the ability to access federal 

student aid information and to complete key tasks on the device of their choosing. As such, FSA 

has focused on making digital products, such as the FAFSA form, mobile-responsive. The 

FAFSA form is also available on the myStudentAid app. This metric measures FAFSA 

submissions via a mobile device either through the FAFSA website or the mobile app to help 

determine customer interest and engagement in using mobile technology to complete online 

forms.

Analysis of Progress:

FSA met the target with more than 2.5 million FAFSA submissions completed on a mobile 

platform.

FY 2020 serves as a baseline year and FSA expects mobile adoption and usage to grow over 

time, especially as new features and personalization are added to the myStudentAid app in 

FY 2021.

Data Quality and Limitations:

FSA operational systems have procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined. A separate data analyst from a 

different office within FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. The Customer Analytics Group is responsible for the primary 

calculation of the metric as well as the technical validation of the metric, which is done by 

reviewing for accuracy the query used to pull the data. The data is an absolute number so no 

calculation and methodology are performed.

The source of the data is FSA’s online platform analytics. The metric is a direct reflection of the 

data platform analytics and FSA constantly monitors the analytics platform to ensure the system 

is secure and the query results are consistent.
Fiscal Year 2020 Annual Report | Federal Student Aid 77

Performance Results by Strategic Goal 

Strategic Objective 2.2: Provide seamless, easy, personalized digital interactions equal with 

top financial institutions in the delivery of financial aid products and services.

Table 23: Performance Metric 2.2.A. Number of customers checking loan balances via the 

myStudentAid mobile app.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 70,000 133,417

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

A goal of the Next Gen FSA effort is to provide customers with the ability to access federal 

student aid information and to complete key tasks on the device of their choosing. Customers 

can view the loan information via an in-app browser on the myStudentAid app. This metric 

gauges customer engagement in using the myStudentAid app to view their current aid 

information.

Analysis of Progress:

FSA met the target with 133,417 customers checking their loan balances through the 

myStudentAid app.

FY 2020 serves as a baseline year and FSA expects mobile adoption and usage to grow over 

time, especially as the Dashboard and Aid Summary features are added to the myStudentAid 

app in FY 2021.

Data Quality and Limitations:

FSA operational systems have procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined. A separate data analyst from a 

different office within FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. The Customer Analytics Group is responsible for the primary 

calculation of the metric as well as the technical validation of the metric, which is done by 

reviewing for accuracy the query used to pull the data.

The data is an absolute number as the number of customers checking their loan balances, so 

no calculation and methodology are performed. The data source is FSA’s online platform 

analytics. This metric is a direct reflection of the data platform analytics. FSA monitors to ensure 

the system is secure and the query results are consistent.
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Performance Results by Strategic Goal 

Table 24: Performance Metric 2.2.B. Number of borrowers who view their aid summary 

information on StudentAid.gov.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 7.6 million

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

StudentAid.gov is FSA's primary customer-facing digital front door for students, parents, and 

borrowers who need be informed about, apply for, and manage their federal student aid. In 

February 2020, the Aid Summary feature was delivered on StudentAid.gov providing 

customers with access to summary and detailed aid information such as loan balances or Pell 

Grant dollars received. This metric gauges customer engagement in using StudentAid.gov to 

view their current aid information.

Analysis of Progress:

FY 2020 serves as a baseline year with more than 7.6 million customers viewing their aid 

summary information on StudentAid.gov. 

Since Aid Summary launched in February 2020, FSA expects this figure to increase in FY 2021.

Data Quality and Limitations:

The aid summary on the Studentaid.gov website was launched on February 23, 2020. Website 

data collection began on February 23, 2019. The data for this metric covers the timeframe of 

February 23, 2020–September 30, 2020. 

FSA operational systems have procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined. A separate data analyst from a 

different office within FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. The Customer Analytics Group is responsible for the primary 

calculation of the metric as well as the technical validation of the metric, which is done by 

reviewing for accuracy the query used to pull the data.

The data is an absolute number as the value is based on the number of users (as opposed to 

sessions or page views), so no calculation and methodology are performed. The data source is 

FSA’s online platform analytics. This metric is a direct reflection of the data platform analytics. 

FSA monitors to ensure the system is secure and the query results are consistent.
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Performance Results by Strategic Goal 

Table 25: Performance Metric 2.2.C. Number of users of “Aidan,” the StudentAid.gov virtual 

assistant.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 25,000 545,763

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

To provide increase self-service options for students, families, and borrowers, this metric helps 

tracks Aidan’s usage. Aidan is a virtual assistant that uses advanced technology—artificial 

intelligence and natural language processing—to answer the most common questions on 

federal student aid. Whether customers want to find out about their current loan account 

balances, learn more about grants, make a payment (pilot), or get help contacting their loan 

servicer, Aidan is available to help them find an answer.

Analysis of Progress:

FSA exceed its target for this metric with a result of 545,763 users.

In December 2019, FSA launched a beta version of Aidan, a virtual assistant that helps users 

get answers to their questions without contacting a call center. Aidan was launched as part of 

the Next Gen FSA effort to improve the way all of its customers—including students, parents, 

borrowers, schools, and partners—interact with and manage the programs administered by 

FSA.

Aidan was available to a group of pilot users during FY 2020 to better understand customer 

questions to ensure FSA is providing relevant and correct answers that meet its customers’ 

needs. Over time, FSA will analyze customer interactions with Aidan to improve its functionality.

During FY 2020, Aidan was able to augment FSA’s CARES Act/COVID-19 communications. All 

questions to Aidan related CARES Act/COVID-19 were redirected to the Coronavirus and 

Forbearance info for Students, Borrowers, and Parents on Studentaid.gov ensuring customers 

received the most recent and accurate information.

Data Quality and Limitations:

Under this performance metric, the total users are defined as individuals that interact with Aidan 

beyond the initial greeting button prompt provided to customers. An FSA contractor performs a 

two-step validation of the Aidan data in the Digital Customer Care (DCC) Tableau system prior 

to sharing with FSA. The source of the data is FSA’s online platform analytics. This metric is a 

direct reflection of the data platform analytics. FSA monitors to ensure the system is secure and 

the query results are consistent.
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Performance Results by Strategic Goal 

Table 26: Performance Metric 2.2.D. Number of borrowers who complete their annual 

certification on time for the Annual Student Loan Acknowledgement (ASLA).

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 858,628

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

StudentAid.gov is FSA's primary customer-facing digital front door for students, parents, and 

borrowers who need be informed about, apply for, and manage their federal student aid. In April 

2020, the Annual Student Loan Acknowledgment feature was delivered on StudentAid.gov 

providing customers who are planning to accept a federal student loan with important 

information on borrowing and their responsibility to repay the loan. This metric gauges customer 

interest and engagement in the Annual Student Loan Acknowledgment (ASLA). In FY 2020, the 

ASLA was provided for informational/educational purposes but was not required.

Analysis of Progress:

FY 2020 serves as a baseline year with 858,628 customers completing the ASLA more than 

1 million times.

Since the ASLA launched in April 2020, FSA expects this figure to increase in FY 2021. In 

addition, completion of the ASLA is currently optional, but FSA is planning to make it mandatory 

for all loan disbursements for the 2021–22 award year.

Data Quality and Limitations:

The performance metric result represents the number of unique users who completed the 

acknowledgment. Users can complete the acknowledgment multiple times and the total number 

of completed acknowledgments is provided in the Analysis of Progress section. A separate data 

analyst from a different office within FSA validates the accuracy of the query and the resulting 

data and validates any anomalous data.

The Customer Analytics Group is responsible for the primary calculation of the metric as well as 

the technical validation of the metric, which is done by reviewing for accuracy the query used to 

pull the data. The source of this data is the Common Origination and Disbursement (COD). 

There is no calculation necessary for this metric as the information is derived directly from COD.
Fiscal Year 2020 Annual Report | Federal Student Aid 81

Performance Results by Strategic Goal 

Table 27: Performance Metric 2.2.E. Transactional email volume for outreach and 

communications to borrowers.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 92.2 million

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric measures the transactional emails that are delivered through our internal 

communications tool. These emails are vital for students, parents, borrowers to understand 

updates and notifications regarding their FAFSA application and other important information that 

needs to be acted on. This metric helps to gauge the health of our email communications and 

platform in terms of volume and reach.

Analysis of Progress:

FY 2020 serves as a baseline year with approximately 92.2 million transactional emails going to 

customers. As part of DCC, FSA is onboarding transactional communications into a centralized 

system for a more consolidated and consistent customer experience.

During FY 2020, FSA has onboarded critical transactional communications for its borrowers. 

This includes FAFSA, COD, and FSA ID real time communications. FSA expects volume 

numbers to continue to increase as it maintains an ED.GOV email domain and brand authority, 

as well as onboarding additional communications.

Data Quality and Limitations:

There is no calculation necessary for this metric. It is reported by the COD system. Several data 

analysts pull the data and a data analyst validates the numbers. The source of the data is the

Digital Communications Tool & Marketing Communications Platform (Comms platform).
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Performance Results by Strategic Goal 

Table 28: Performance Metric 2.2.F. Recurring campaign email delivery volume for outreach 

and communications to borrowers.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 32.2 million

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric measures the recurring emails that are delivered through the internal 

communications tool. Recurring campaigns are defined as communications that FSA sends on 

a consistent cadence that are not tied to immediate transactional interactions, such as the 

Renewal campaign reminders. This metric helps to gauge the commitment to consistent and 

proactive communications.

Analysis of Progress: FY 2020 serves as a baseline year for this metric with approximately 

32.2 million recurring emails going to customers. As part of DCC, FSA is onboarding these 

recurring communications into a centralized system for a more consolidated and consistent 

customer experience.

FSA has looked at Renewal campaign data, as well as Auto Closed School Discharge and 

Temporary Expanded Public Service Loan Forgiveness (TEPSLF) data to get these metrics. 

These numbers will help to establish the baselines for future FAFSA renewal campaigns. As 

FSA continues to create and onboard new communications that are recurring, always-on, and 

not tied to transactional messaging, it will be added to this metric.

Data Quality and Limitations:

There is no calculation necessary for this metric. It is reported by the COD system. Several data 

analysts pull the data and a data analyst validates the numbers. The source of the data is the 

Comms Platform.
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Performance Results by Strategic Goal 

Table 29: Performance Metric 2.2.G. American Customer Satisfaction Index (ACSI) Aid 

Lifecycle Survey score.* 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – 69.9 70.6 70.0 72–74 73.5 

Performance Result N/A Met Met Met Met

*Note: Formerly A.5 in FSA FY 2019 Annual Report. 

Target Context:

This metric provides a measure of the customer experience across the student aid lifecycle, by 

accessing customer satisfaction scores from FAFSA filers, from financial aid administrators, and 

from borrowers repaying their loans.

Analysis of Progress:

FSA met its target range for this metric with a result of 73.5. 

The FY 2020 score of 73.5 is higher than the FY 2019 score of 70.0 and the FY 2018 score of 

70.6. The score consists of three groups of borrowers that span the financial aid lifecycle. The 

most heavily weighted of these measures is borrowers who are currently having their loans 

serviced—this is the largest segment of the population served by FSA (FSA has more than

32 million borrowers) and therefore accounts for almost 72 percent of the measure. Nearly 

24 percent of this metric is made up of scores collected by FAFSA applicants (roughly 18 million 

FAFSA forms are filed each year) and the smallest component of the metric is the 5 percent of 

the measure that accounts for students (10 million) still in school who are receiving Title IV 

funds. Together, the three measures span the three major parts of the financial aid lifecycle.

Data Quality and Limitations:

Traditionally, the ACSI survey has been conducted annually for FSA’s major programs. The 

index provides a national, cross-industry, cross-sector economic indicator, using widely 

accepted methodologies to obtain standardized customer satisfaction information. Survey 

scores are indexed on a 100-point scale. The ACSI scores for application, in-school experience, 

and servicing are weighted by the utilization of each process/service and the intensity of the 

service provided.

This metric is calculated by using weighted customer satisfaction scores from the Multiple 

Servicer Survey, FAFSA.gov and the In-School customer satisfaction survey. Several data 

analysts pull the data, and a data analyst validates the numbers. The data source for this metric 

is the Multiple Servicer Survey, FAFSA.gov, and (federal student aid recipients) In-School 

customer satisfaction survey. This metric is a direct reflection of the data collected through the 

ACSI Aid Life Cycle Survey. FSA monitors to ensure the system is secure and the query results

are consistent.
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Performance Results by Strategic Goal 

Table 30: Performance Metric 2.2.H. Customer Satisfaction Survey(s) for StudentAid.gov site 

and associated tools.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Survey 

development

and

implementation

No survey 

developed

Performance Result N/A* N/A* N/A* N/A* Not Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric intends to measure customer satisfaction with the StudentAid.gov website, 

including the applications, tools, and processes available on the site. The measurement of 

customer satisfaction would encompass activities such as completing entrance and exit 

counseling, or the usage of the repayment calculator that assist customers in selecting a 

repayment plan that best fits their needs. Customer satisfaction surveys will assist FSA in 

developing additional tools and offering website improvements based on their feedback.

Analysis of Progress:

FSA did not meet its target for this metric as no surveys were developed for StudentAid.gov in 

FY 2020.

FSA is evaluating Voice of the Customer technologies that would allow the utilization of survey 

customers on StudentAid.gov at a regular cadence, the ability for staff to analyze results of 

structured and unstructured feedback. Surveys would generally follow the guidance given by 

OMB as part of OMB Circular A-11, Section 280. FSA expects to have surveys implemented 

across StudentAid.gov in FY 2022.

Data Quality and Limitations:

N/A.
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Performance Results by Strategic Goal 

Strategic Objective 2.3: Streamline contact center and back-office operations to improve our 

customers’ integrated experience.

Table 31: Performance Metric 2.3.A. Quality Standard for Average Speed to Answer (ASA) at 

all Call Centers. 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Equal to or 

less than 

60 seconds

59.0

Performance Result N/A N/A N/A N/A Met

*Notes: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The goal of this metric is to ensure FSA’s loan servicing vendors (Not-For-Profits (NFPs) and 

Title IV Additional Servicers (TIVAS)) are providing the best customer service to FSA’s

borrowers. One way that this is measured is through the Average Speed to Answer rate. This is 

the average number of seconds it takes a borrower to speak with a customer service 

representative from the moment a borrower calls to the time a customer service representative 

answers the call. A higher ASA indicates a longer wait time and may result in a higher call 

abandon rate or increased call frustration.

Analysis of Progress:

FSA met its target for this metric with an ASA of 59.0 seconds.

The ASA rate target was achieved in FY2020 for FSA’s NFPs and TIVAS. This was 

predominately a result of the CARES Act forbearance period that began in March 2020 and 

remained in place until the end of the fiscal year. Before this period, the ASA averaged 102 

seconds (October–March) and then became 16 seconds (April–September). Entering FY 2021, 

the ASA rate remains low due to the extension of the CARES Act forbearance period through

December 31, 2020, and related call volumes being more than 50 percent below normal. If the 

benefits are not extended, FSA expects that the ASA rate will increase in January 2021 as 

borrowers resume making payments and servicers adjust staffing to reach the right equilibrium.

If benefits are extended, then it can be expected that the ASA rate will remain low throughout 

FY 2021.

Data Quality and Limitations: 

The source of data for this performance metric is the Federal servicers’ quarterly reports. The 

verification and validation of performance by the nondefault federal student loan servicers is

conducted by FSA and includes (but is not be limited to): (1) review and validation of federal 

servicer reports; (2) ongoing/recurring quality assurance discussion with federal servicers; (3) 

site visits to federal servicer call center sites; and (4) documented on-phone (“mystery caller”) 

evaluations of services.
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Performance Results by Strategic Goal 

Because the agency directive is succinct and builds on current contractor operational 

capabilities, FSA does not anticipate anomalous data or issues with implementation. However, 

in cases where verification and validation detect anomalies that suggest less-than-complete 

information, FSA will address any deficiencies through direct contact with federal servicers, 

requests for information, audits, site visits, and/or other assessment measures of performance, 

as applicable.
Fiscal Year 2020 Annual Report | Federal Student Aid 87

Performance Results by Strategic Goal 

Table 32: Performance Metric 2.3.B. Quality Standard for Abandon Rate (AR) for Incoming 

Calls at all Call Centers.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Equal to or

less than

2%

3.6% 

Performance Result N/A* N/A* N/A* N/A* Not Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The goal of this metric is to ensure the loan servicing vendors (NFPs and TIVAs) are providing 

the best customer service to our borrowers. One way that this is measured is through the 

Abandon Rate (AR). This is the average number of calls in which a borrower hangs up 

(abandons) the call before they speak with a customer service representative. The higher the 

rate the more borrowers are abandoning a call and likely not getting the information/answers 

they need.

Analysis of Progress:

FSA did not meet its target for this metric with an AR of 3.6 percent.

The AR target was not achieved in FY 2020 for the NFPs and TIVAs, but servicers achieved 

significant progress in improving their AR throughout the year. This was predominately a result 

of the CARES Act forbearance period that began in March 2020 and remained in place until the 

end of the fiscal year. Before this period, the AR averaged 6.1 percent (October–March) and 

then became 1.0 percent (April–September). Entering FY 2021, the AR remains low due to the 

extension of the CARES Act forbearance period through December 31, 2020, and related call 

volumes being more than 50 percent below normal. If the benefits are not extended, FSA can 

expect the AR to increase in January 2021 as borrowers resume making payments and 

servicers adjust staffing to reach the right equilibrium. If benefits are extended, then it can be 

expected that the AR will remain low throughout FY 2021.

Data Quality and Limitations:

The source of data for this performance metric is the Federal servicers’ quarterly reports. The 

verification and validation of performance by the nondefault federal student loan servicers is 

conducted by FSA and includes (but is not be limited to): (1) review and validation of federal 

servicer reports; (2) ongoing/recurring quality assurance discussion with federal servicers; (3) 

site visits to federal servicer call center sites; and (4) documented on-phone (“mystery caller”) 

evaluations of services. 

Because the agency directive is succinct and builds on current contractor operational 

capabilities, FSA does not anticipate anomalous data or issues with implementation. However, 

in cases where verification and validation detect anomalies that suggest less-than-complete 

information, FSA will address any deficiencies through direct contact with federal servicers, 
88 Fiscal Year 2020 Annual Report | Federal Student Aid

Performance Results by Strategic Goal 

requests for information, audits, site visits, and/or other assessment measures of performance, 

as applicable.
Fiscal Year 2020 Annual Report | Federal Student Aid 89

Performance Results by Strategic Goal 

Strategic Objective 2.4: Simplify the communication and processes associated with borrower 

repayment plans.

Table 33: Performance Metric 2.4.A. Number of borrowers using Make a Payment feature to 

pay student loans.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Implement 

pilot for

Make a 

Payment 

feature

12,245

payments

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

StudentAid.gov is FSA's primary customer-facing digital front door for students, parents, and 

borrowers who need be informed about, apply for, and manage their federal student aid. In 

February 2020, the Make a Payment pilot was delivered on StudentAid.gov providing 

customers with loans serviced by Great Lakes or Nelnet (both FSA loan servicers) with the 

ability to make a standard loan payment on StudentAid.gov. This metric gauges customer 

interest and engagement in using StudentAid.gov to make a student loan payment.

Analysis of Progress:

FY 2020 serves as a baseline year with customers making more than 12,245 student loan 

payments on StudentAid.gov. Since the Make a Payment pilot launched in February 2020, 

FSA expects this figure to increase in FY 2021. The FY 2020 payments were also impacted by 

COVID-19 and the suspension of loan payments through December 31, 2020.

Data Quality and Limitations:

This figure represents the number of student loan payments made on StudentAid.gov. FSA is

unable to provide the unique number of customers who made payments. A separate data 

analyst pulls the data and then a different analyst pulls the data independently to validate the 

accuracy of the information and any anomalous data.

The source of the data is the DCC Web Logs. No calculation is necessary as the data is an 

absolute number reported to FSA from the DCC Web Logs.
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Performance Results by Strategic Goal 

Table 34: Performance Metric 2.4.B. Percentage of borrowers using auto-debit.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 24.8% 

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric measures the volume of borrowers that are enrolled in auto-debit. Auto-debit allows 

borrowers to pay their student loan payments without any effort since the payment is extracted 

from the borrower's financial institution each time a payment is due, allowing borrowers to make 

payments in full and on time with minimal effort required. Borrowers who enroll in auto-debit are 

given a 0.25 percent reduction on their interest rate.

Analysis of Progress:

FY 2020 will be the baseline year for measuring the percentage of borrowers using auto-debit.

Auto-debit percentage will be calculated using the number of borrowers in the National Student 

Loan Data System (NSLDS) that are reported as enrolled in auto-debit in comparison to the 

total number of borrowers in repayment (not in school or in grace status). FSA anticipates 

improvement to the percentage of borrowers using auto-debit as the ease of enrollment and 

knowledge of the benefits of auto-debit are publicized during the implementation of Next Gen

FSA. 

COVID-19 and other economic impacts may result in overall reductions in the ability of 

borrowers to make student loan payments and this may impact any improvements to the auto 

debit percentages until economic impacts of COVID-19 improve.

Data Quality and Limitations:

Enrollment in auto debit is reported by federal loan servicers to NSLDS. Accuracy of that data is 

validated by FSA using NSLDS monitoring techniques. NSLDS queries will provide the volume 

of borrowers enrolled in Automatic Direct Debit (auto debit) and the total volume of borrowers in 

repayment. The auto debit volume will be divided by the total borrowers in repayment volume 

and rounded to 1/10th percent to calculate auto debit percentage. NSLDS queries and 

calculations are validated by FSA's Data Review Team for accuracy. The source of the data is 

the NSLDS.
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Performance Results by Strategic Goal 

Table 35: Performance Metric 2.4.C. Percentage of Public Service Loan Forgiveness (PSLF) 

applicants who had used the PSLF Help Tool and who met the requirements for PSLF.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The metric tracks the percentage of users who complete the PSLF Help Tool. Upon completing 

the PSLF Help Tool, it generates a PSLF form for users to fill out. 

Analysis of Progress:

FY 2020 serves as a baseline year for this metric, but the methodology to accurately track the 

performance of the PSLF Help Tool is incomplete. The baseline study will continue into 

FY 2021.

In FY 2020, FSA updated the PSLF Help Tool to include an employer eligibility database for 

borrowers to learn early in the process whether their employer is an eligible employer for PSLF

purposes. FSA can now compare PSLF Help Tool usage from its inception in December 2018 to 

present, to see the number of borrowers completing the tool and generating the correct form.

However, PSLF Help Tool usage was impacted as borrowers entered the CARES Act 

administrative forbearance. Initially, there was noticeable PSLF Help Tool usage decline, but 

usage increased with the release of the employer eligibility database. A policy determination 

shifted the timeframe associated with employment certification, which also impacted FSA’s 

ability to assess customer usage of the tool in an effective way. In FY 2021, FSA is on track to 

delivering an improved PSLF Help Tool with a combined form, so that a borrower is considered 

for TEPSLF in addition to PSLF.

Data Quality and Limitations:

The source of the data is on the COD Portal and provided by an FSA contract resource. The 

contractor assists with the monitoring of PSLF Help Tool usage and which form is generated

based on customer interaction with the PSLF Help Tool.
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Performance Results by Strategic Goal 

Strategic Goal 3: Increase Partner Engagement and Oversight 

Effectiveness

Strategic Goal 3 is focused on how FSA will assist schools, third-party servicers, and financial 

institutions to deliver federal student aid, collect borrower payments seamlessly, and safeguard 

data integrity through oversight and monitoring. FSA will also ensure schools understand and 

comply with Title IV requirements.

FSA will gauge its performance using six metrics. FSA will utilize a more comprehensive suite of 

monitoring tools to ensure IHEs appropriately administer Title IV aid. To measure the 

effectiveness of its oversight, FSA will annually conduct institutional reviews that will include 

comprehensive compliance reviews, institutional assessment reviews, and general or focused 

program compliance assessment reviews. These reviews will assess compliance with 

requirements for aid delivery, return to Title IV and student loan repayment.

Additionally, FSA is committed to continued enhancements in oversight and improving the 

borrower experience by reducing institutional fraud. An outcome of this effort is demonstrated by 

the tactical approach for application processing FSA has taken in the area of Borrower Defense 

(BD) which will afford significant progress in resolving the outstanding applications. 

Under Goal 3, FSA is also pursuing opportunities in the Next Gen PPO platform to provide high 

quality training and encourage partner participation. It is necessary for the organization to

provide comprehensive training and specialized technical assistance to participating schools 

that receive Title IV aid as well as create pathways for institutional feedback that will allow FSA 

to continuously improve its interactions with partners in the delivery of aid to students and 

borrowers.

Strategic Goal 3 includes the two strategic objectives listed below:

• Strategic Objective 3.1:

Provide effective oversight of FSA’s partners utilizing a comprehensive suite of 

monitoring tools.

• Strategic Objective 3.2:

Strengthen partner engagement and provide effective outreach and assistance.

In FY 2020, FSA had two objectives under Goal 3 that include six metrics. Of these six metrics, 

three were met and one metric was not met for this goal. Additionally, two metrics were

baselined in FY 2020.
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Performance Results by Strategic Goal 

Strategic Objective 3.1: Provide effective oversight of FSA’s partners utilizing a 

comprehensive suite of monitoring tools.

Table 36: Performance Metric 3.1.A. FSA will annually conduct an Institutional Review for its 

participating partners including schools, third-party servicers, and financial institutions.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Conduct

Institutional

Reviews for

at least 40%

of partners

51% of 

partners 

reviewed

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric measures the performance of holistic comprehensive compliance reviews of 

institutions relating to certification actions, deficient audit resolutions, flagged financial 

statements, program reviews, method of payment actions, and technical assistance.

Analysis of Progress:

FSA met its target for this metric with a result of 51 percent of partners reviewed.

In FY 2020, FSA conducted oversight reviews for 2,878 unique institutions of higher education 

relating to certification, deficient audit resolutions, flagged financial statements, program 

reviews, method of payment, and technical assistance. FSA completed 1,078 recertifications 

and 4,410 other institutional eligibility related applications, evaluated more than 2,000 school 

financial responsibility notifications, processed more than 3,000 deficient audits, and flagged 

financial statements, and issued 143 Final Program Review Determinations or other close-out

actions with a total of approximately $146.7 million in liabilities. FSA accomplished this work 

while also issuing 211 Automatic Closed School Discharge letters asserting approximately 

$59.1 million in associated liabilities. FSA also conducted oversight of lenders, lender servicers, 

and guaranty agencies. FSA conducted 16 program reviews and identified untimely reinsurance 

requests for more than 38,000 loans impacting approximately $319.2 million. 

Data Quality and Limitations:

Next Gen PPO’s data for the metric measurement and sub-measurements are highly reliable 

and retained in the Postsecondary Education Participants System (PEPS) and in the eZ-Audit

system. Metric calculations are based on data extracts from the data systems. The data extracts 

are subject to quality checks and validation. After data are compiled, a staff member reviews the 

queries and formulas to ensure proper functioning and correct counting reviews/schools. Since 

Next Gen PPO may perform more than one compliance review of an institution during a fiscal 

year, the data are de-duplicated to ensure an institution is counted only once. The count of 

unduplicated institutions for whom Next Gen PPO performed a compliance review is compared 
94 Fiscal Year 2020 Annual Report | Federal Student Aid

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with an unduplicated count of participating institutions to calculate the actual percentage for this 

performance metric.
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Table 37: Performance Metric 3.1.B. Number of Borrower Defense (BD) applications 

adjudicated (subject to existing BD regulations).

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 150,000 160,000

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

BD to repayment is a type of federal student loan forgiveness where borrowers may be eligible 

for forgiveness of their federal student loans if the relevant school attended misled the borrower 

or engaged in other misconduct in violation of certain laws. During the first two months of this 

fiscal year, FSA adjudicated17 more than 12,000 applications that remained pending further 

processing without an approved relief methodology. On December 10, 2019, the Secretary 

announced the approval of the new tiered relief methodology (2019 relief methodology) which 

allowed FSA to process applications for relief and progress toward elimination of the backlog of 

more than 175,000 claims awaiting adjudication. Following approval of the methodology, FSA 

targeted to build capacity to adjudicate 5,000 applications per week with an ultimate objective of 

less than 5,000 claims on hand by late Fall 2020.

Analysis of Progress:

FSA met its target for this metric with a result of 160,000 BD applications adjudicated.

While receiving an average of more than 750 new applications per week from June through 

September 2020, FSA continued to build production capacity by hiring more than 52 term 

attorneys. This capacity helped contribute to adjudicating more than 148,000 applications since 

December 2019, a reduction of more than 84 percent of the backlog of more than 175,000 

cases awaiting adjudication at the time.

Data Quality and Limitations:

Weekly production data is derived from the BD case management platform which tracks 

progress and status of BD applications through intake, adjudication, borrower notification, and 

loan servicer documentation on effectuated loan relief, where applicable. Weekly data 

verification reviews are coordinated among the business unit and FSA’s enterprise data office. 

This production data is reported in weekly performance metrics evaluated by FSA and 

Department Senior Leadership. The source of data for this performance metric is the Customer 

Engagement Management System.

17 Adjudication refers to the Department’s evaluation, and decision on the individual merits, of any given borrower 

defense application in accordance with applicable rules and regulations. It is an individual process that depends on 

the information submitted by the borrower as well as any relevant evidence in the Department’s possession.
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Strategic Objective 3.2: Strengthen partner engagement and provide effective outreach and 

assistance.

Table 38: Performance Metric 3.2.A. FSA will provide comprehensive training and/or 

specialized technical assistance to its participating schools that receive Title IV Aid on behalf of 

students.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

At least 35% of 

schools will 

receive

comprehensive

training and/or 

specialized

technical

assistance

70% 

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

Training and technical assistance for this metric is provided and tracked at the individual learner 

level at participating schools. As a target, professionals (individual learners) in at least 

35 percent of all participating schools will receive outreach and assistance, through such means 

as congressionally mandated training, the annual FSA Training Conference, state and regional 

professional association conferences and a large portfolio of web-delivered self-service courses, 

webinars, Ask-a-Fed queries for individualized technical assistance, and systems-oriented job 

aids. The training is delivered in person as well as via FSA’s Learning Management System

(LMS) and webinars. School participation in training offerings and technical assistance is almost 

entirely voluntary.

Analysis of Progress:

FSA met its target for this metric by providing comprehensive training and/or specialized 

technical assistance to 70 percent of participating Title IV eligible schools.

FSA provided 5,471 instances of comprehensive training and/or technical support to individual 

professionals from 3,955 institutions (70 percent) during FY 2020. Of these total instances, 

3,955 instances of support were provided and tracked via LMS; 3,300 instances were provided 

via Ask-a-Fed query assistance and direct outreach support to meet the unique needs of 

Minority Serving Institutions (MSIs); and at least 89 instances were provided via mandatory 

training. All in-person training events were cancelled. The Fundamentals of Title IV course was 

moved to an all virtual environment. A 4.5 day in-person Fundamentals training session required 

for participation in the Title IV programs was revamped for Live on-line delivery. Five revised 

sessions have been delivered. Additional new training and technical assistance/assessment 

products have been developed, for virtual delivery leveraging lessons learned from replatforming Fundamentals training.
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Because this is a new baseline metric, FSA did not previously track schools associated with 

individual professionals receiving training or assistance via Ask-a-Fed query and response 

support. FSA has identified additional data collection requirements to associate queries and 

individual support to professionals with their associated institution. This more robust data 

tracking will allow FSA to capture the extent of training and technical assistance more fully for 

individuals across all participating institutions. Next Gen PPO School Portal capability is 

necessary to fully capture alignment of training and technical assistance saturation among 

professionals against associated institutions.

Data Quality and Limitations:

The activity is mostly a manual count (e.g., manual inbox count of Ask-a-Fed email inquiries), 

but FSA does remove duplicate Office of Postsecondary Education Identifications (OPEIDs) to 

ensure its participation rate is non-duplicative. OPEID is self-reported by users of the training 

system. Reports run in the LMS (fsatraining.gov) identify users of the site. The report is 

exported to Excel and manipulated to remove users without an OPEID and duplicate OPEIDs. 

The Federal Student Aid Training Center registrant data is also received from the conference 

team. Data is pulled from CVENT for registrants at state and regional association conferences 

where Training and Information Services Group staff presented. This data is merged with the 

LMS data to produce a list of OPEIDs who have received training. To minimize errors, the 

assessment process consists of batch loading the performance data in excel spreadsheets from 

the source databases into the Salesforce assessment tool.

The quality of the data is impacted because not all instances of technical assistance and 

support have been tracked historically by FSA. Data collection from multiple systems using 

differing demographic points (e.g., user reported school name variances, branch campus 

OPEID v Main Campus) and manual counts of user emails can affect the consistency of the 

information used for analysis. The sources of data for this metric are the following: FSA LMS, 

PEPS, eZ-Audit, PCnet, FSA Data Center, and NSLDS.
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Table 39: Performance Metric 3.2.B. FSA will measure Partner Participation rates in training 

programs.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Baseline 

school and 

partner

participation

using all

documented

contacts 

with the 

training and 

technical

assistance 

70% 

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

FSA measured training participation of 3,955 unduplicated schools out of a total eligible school 

population of more than 5,600, representing a 70 percent achievement. The participation rate 

includes individuals participating in person or a webinar delivered state, regional and national 

professional association conferences as well has the efforts of the Minority Serving and Underresourced Schools Division (MSURSD). Training was delivered in-person, via live webinars, or 

via FSA’s LMS. In a typical fiscal year, only certain schools (less than 200) are required to 

attend training, primarily the congressional mandated “Fundamentals of Title IV.” Training 

participation by all other Title IV participating schools is voluntary.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric and the current baseline of a 70 percent

partner participation rate will be further analyzed in FY 2021.

FSA transformed its outreach and assistance efforts into dynamic virtual capabilities for 

institutions and financial aid partners. FSA redesigned its 4-day in-person Title IV Fundamentals 

training session into a real-time online format for 5 successful sessions with 89 school partners; 

fielded a new Virtual Technical Assistance tool aimed at MSIs and a virtual Training product for 

newly approved Title IV schools; and identified 72 MSIs that had not previously used the FSA 

LMS to virtually instruct on the availability and effective use on on-line learning resources.

Additionally, FSA streamlined its outreach and on-boarding processes for Project Success, a 

program focused on pairing MSIs with guaranty agencies to address risk factors affecting 

graduation, retention, and cohort default rates. Specialized technical assistance included 

webinars, Ask-a-Fed queries for individualized technical assistance, MSURSD consulting to 

address the specific needs of their school partners for Default Management and Compliance 

assistance, and school staff training.
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Due to the voluntary nature of training, FSA will continue to expand outreach and ensure that 

products continue to reflect the needs of the schools. All FSA Training events, self-service 

modules, and annual courses (such as Fundamentals in Title IV) are communicated via 

Electronic Announcements to Information for Financial Aid Professionals (IFAP) and FSA 

utilizes a “push notification” system to announce the availability of LMS-based courses. Due to 

COVID-19, all live training was cancelled from March 2020 through the end of the fiscal year 

and beyond. Virtual solutions developed and implemented for all required training programs and 

additional webinar support provided to our institutional partners.

Data Quality and Limitations:

The metric is calculated as a numerical count of activities, but duplicate OPEIDs are removed to 

ensure the participation rate is non-duplicative. OPEID is self-reported by users of the training 

system. Reports run in the LMS identify users of the site. The report is exported to Excel and 

manipulated to remove users without an OPEID and duplicate OPEIDs. FSA Training Center

registrant data is also received the CVENT registration system from the conference team. 

Additional conference data is pulled from CVENT for registrants at state and regional 

association conferences where Training and Information Services Group staff presented. 

Additional training data is obtained from the Salesforce system used by MSURSD.

This data is merged with the LMS data to produce a list of OPEIDs who have received training. 

The data is collected from multiple systems using differing demographic collection points (user 

reported school name variances, branch campus OPEID versus Main Campus, etc.) and 

manual counts of user emails. The data sources are as follow: FSA LMS, Salesforce, CVENT, 

PEPS, eZ-Audit, PCnet, FSA DATA Center, NSLDS, and Case Management Information 

System.
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Table 40: Performance Metric 3.2.C. FSA will enhance the self-service training resource and 

informational platform to improve communication with participating partners, including schools, 

third-party servicers, and financial institutions.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 62%

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric represents enhancements to the FSA LMS—specifically, courses created or revised 

in FY 2020. It is not only a percentage of self-service courses available—it includes revisions, 

deletions, new courses added. During FY 2020, FSA created or revised 167 LMS courses which 

reflects 62 percent of the available 271 courses in FY 2019. This includes revising the learning 

tracks for new, intermediate, and expert level financial aid administrators. The courses focus on 

the proper administration of Title IV programs with offerings for new financial aid office to 

institutional presidents and chief executive officers. 

Analysis of Progress:

FY 2020 is a baseline year for this performance metric with 62 percent of the course offered 

within the LMS being either newly created or revised based on customer needs.

FSA’s training platform, the FSA LMS provides on-demand self-service training to registered 

users. The number of FSA LMS users has increased 22 percent from 44,662 registered users in 

FY 2018 to 57,487 users in FY 2020. This population represents 3,955 Title IV participating 

institutions, as well as third party servicers, auditors, and FSA Staff.

FSA continues to innovate and partner with our institutions to support their own internal staff 

training. LMS now has upgraded functionality that allows Title IV participating schools to create 

training programs for their own staff and track their progress to a particular goal. The feature 

been transitioned from a testing phase to full rollout to all interested users. FSA is in the process 

of integrating the LMS into the Phase Three roll-out of the Next Gen PPO. There are also efforts 

underway to implement a training referral process for offices within FSA to be able to suggest 

particular training for Title IV participating institutions or technical assistance resources, as 

needed.

Data Quality and Limitations:

This performance metric is a numerical count of changes within a defined electronic training 

environment. FSA has a baseline of 260 courses deployed on the training system. The Next 

Gen PPO team tracks additions, modifications, and removals. The data source for this metric is 

the FSA LMS.
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Table 41: Performance Metric 3.2.D. Ease of doing business with FSA.* 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 72.3 73.4 74.5 74.0 74–76% 71%

Performance Result Not Met Met Met Met Not Met

*Note: Formerly D.1 in FSA FY 2019 Annual Report.

Target Context:

FSA conducts an annual “Ease of Doing Business” survey with its Title IV eligible school 

partners. The survey is conducted by CFI Group, an independent third-party survey company, 

and results are provided to the Department and FSA. The FY 2020 Ease of Doing Business 

Score is an overall measure of post-secondary educational institution financial aid 

administrators’ assessment of their recent experience interacting with FSA (and its contractors) 

including telephone/email/chat/fax communication regarding FSA’s systems and products, 

policy group, training, and compliance staff.

Analysis of Progress:

FSA did not meet its target for this metric with a result of 71 percent. 

Many areas remained on trend including compliance issues being resolved fairly and technical 

assistance requests continuing a modest upward trend. Regular bright spots, such as the 

training conference, knowledge by FSA trainers, and quality of assistance from FSA and training 

related metrics, remained high at 83 percent, 81 percent, and 80 percent, respectively. 

Additionally, some comments of appreciation were provided for FSA’s efforts to guide financial 

aid administrators through the fluid landscape of FY 2020.

The “Overall ease of doing business” score dropped 3 points this fiscal year to 71. From 

providing guidance for new support programs to determining how to apply old rules in a 

changed environment, FSA was challenged by the enormity of communicating, training, and 

implementing clear policies and programs during the COVID-19 national emergency. Further 

reinforcing these observations and related comments, scores for the “extent policy changes 

impacted ease of doing business” increased two points (68). One-third of financial aid 

administrators who responded to the survey expressed issues, changes, and uncertainty related 

to COVID-19, the CARES Act, and the Higher Education Emergency Relief Fund as 

circumstances that have made it more challenging. The Ease of Doing Business score is also 

likely impacted by the reduction in the “usefulness of training scores” in the FY 2020 survey. 

Survey participants expressed a desire for additional training and guidance related to the 

COVID-19 pandemic.

Many financial aid administrators commented about the ease of finding information including the 

ease of searching IFAP, information searches in general, or the ease of finding things in the 

FSA Handbook. FSA recognizes a clear opportunity for our efforts to better meet customer 

needs going forward with the execution of Next Gen PPO phased releases, IFAP integration 

improvements, and site access point integration. The one-stop digital platform will centralize 

communication, training, and knowledge management for our partner community of schools, 
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third-party servicers, lenders, and guarantors in efforts to further automate functionality and 

improve workflows.

Data Quality and Limitations:

This performance metric is based on calculations from CFI Group, and the FSA project officer 

verifies the FY 2020 School Partners survey scores for the Ease of Doing Business with FSA

metric and coordinated validation through FSA Data Review Team. The source of the data is 

the FY 2020 Schools Partners Survey. The survey collects this data and calculates the results 

and presents findings and conclusions to FSA.
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Performance Results by Strategic Goal 

Strategic Goal 4: Strengthen Data Protection and Cybersecurity 

Safeguards

FSA has a responsibility to protect student and borrower data integrity and confidentiality. Risk 

management and mitigation—especially regarding data protection and cybersecurity—remains 

a top priority within the scope of the FY 2020-24 Strategic Plan as it has in past years. 

Additionally, FSA and its third-party vendors must maintain and enforce rigorous cybersecurity 

standards in accordance with federal requirements to enable the organization to successfully 

pursue its mission. The Next Gen FSA effort makes it critical for FSA to integrate state-of-the-art 

cybersecurity protection across the federal student aid lifecycle. These efforts, as outlined under 

Goal 4, will include increased support for partner institutions and coordination with vendors to 

provide improved cybersecurity services.

Goal 4 also focuses on improving the protection of Title IV data through increased collaboration 

with all Title IV participating institutions and third-party servicers, inclusive of sharing best 

practices and threat information to ensure institutions take the actions needed to protect student 

data and student privacy. However, success in data protection begins with FSA, and therefore 

Goal 4 highlights the necessity to ensure that all employees and contractors understand and 

integrate effective cybersecurity practices and considerations in their daily work and recognize 

that cybersecurity risk management is everyone’s responsibility. This organization-wide 

emphasis on cybersecurity culture will create a greater focus to gather insights, identify risks, 

and make well-informed decisions regarding cybersecurity, technology, and data management.

Strategic Goal 4 includes the three strategic objectives listed below:

• Strategic Objective 4.1:

Implement business partner and vendor systems that house, manage, and provide

systems supporting FSA business processes, outreach and awareness focused on

oversight, enforcement, infrastructure, systems, and data.

• Strategic Objective 4.2:

Improve student privacy data and cybersecurity controls of Institutions of Higher

Education (IHEs) through outreach and communication, to mitigate future cyberincidents and breaches.

• Strategic Objective 4.3:

Build an effective cybersecurity culture through employee awareness, training and

accountability focused on protecting systems and data.

In FY 2020, FSA had three objectives under this goal. These objectives included four metrics.

Of these four metrics, two metrics were not met for this goal. Additionally, two metrics were

baselined in FY 2020.
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Strategic Objective 4.1: Implement business partner and vendor systems that house, manage, 

and provide systems supporting FSA business processes, outreach and awareness focused on 

oversight, enforcement, infrastructure, systems, and data. 

Table 42: Performance Metric 4.1. Increase partner/vendor cybersecurity effectiveness by 

reducing the total number of FSA system assessment findings by 20% per year.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 1,800 3,561

Performance Result N/A* N/A* N/A* N/A* Not Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The FY 2020 metric is a measurement of the number of findings discovered during independent 

assessments or continuous diagnostics and monitoring efforts that are indicative of potential 

cyber security issues leading to a breach of privacy information or the potential compromise of 

an information system. 

Analysis of Progress:

FSA did not meet its target for this metric with a result of 3,561 FSA system assessment 

findings.

During FY 2020, additional systems were added to the ongoing security authorization program 

to allow timely assessments and identification of cyber security vulnerabilities. This increased 

oversight has resulted in earlier discovery of vulnerabilities allowing early correction before they 

have had an opportunity to be exploited.

The FY 2019 measurements, used to establish the preliminary target for FY 2020, failed to 

account for increased federal requirements for more frequent assessments, quarterly versus 

triannual. The increased assessment activity resulted in a significant increase in the number of 

actual findings over the target number.

The challenge was the introduction of significant modernization efforts, through the Next Gen 

FSA project, in the form of new and untested capabilities, features, and technologies presenting 

significant cyber security issues and findings. The introduction of new information systems into a 

quarterly ongoing security assessment program identified a significant number of findings that 

were previously not discovered or reported directly impacting the actual number of findings for 

the year. This is anticipated to continue into FY 2021. For future improvement, FSA will 

research the availability and applicability automation technologies to rapidly identify, discover, 

and resolve issues before they become findings.

Data Quality and Limitations:

The data for this performance metric is provided by the assessments conducted and utilized by 

the OCIO for the Department’s monthly cybersecurity scorecard. Data is verified through the 
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Performance Results by Strategic Goal 

assessment process as defined by the National Institute of Standards and Technology, the 

Department, and FSA guidance. The plan of action and milestone is a description of the 

vulnerability findings using the National Vulnerability Database. The source of the data is the 

following: FSA Enterprise Cybersecurity Group; Department Cybersecurity Assessment and 

Management Shared Service.
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Strategic Objective 4.2: Improve student privacy data and cybersecurity controls of Institutions 

of Higher Education (IHEs) through outreach and communication, to mitigate future 

cyber-incidents and breaches.

Table 43: Performance Metric 4.2.A. Increase Institutions of Higher Education cybersecurity 

effectiveness by reducing GLBA cybersecurity non-compliance by 20% per year.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 177

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This performance metric measures FSA’s effectiveness in reducing GLBA cybersecurity noncompliance at IHEs. FY 2020 was the first year that IHEs were required to comply with 

cybersecurity metrics as part of GLBA annual audits of institutions.

Analysis of Progress:

FSA implemented the major processes and procedures necessary to manage the program and 

work with IHEs to ensure compliance with GLBA. The baseline scores are a measurement of an 

institution’s ability to meet three cyber security requirements indicative of a basic cybersecurity 

program designed to protect student data. Due to COVID-19, the lack of comprehensive audit 

results will skew the baseline year resulting in inaccurate targets for the remaining years. A 

significant challenge is the lack of institutional processes that clearly identify roles, 

responsibilities, and requirements to maintain a comprehensive cyber security program. 

Additional guidance is being developed to assist the institutions in creating and maintaining an 

effective program. For future improvement, FSA has established a Task Force to develop a 

comprehensive implementation plan to assist institutions with achieving effective cyber security 

compliance.

Departmental COVID-19 restrictions placed the FSA response process on hold for the last six 

months of the fiscal year and created a challenge for FSA during FY 2020. Overall, COVID-19

significantly delayed the annual audits for IHEs resulting in fewer audits being conducted and 

presented to FSA for analysis.

Data Quality and Limitations:

The performance metric is a numerical count of the cybersecurity related audit findings. The 

finding count is provided by the Next Gen PPO staff and verified against the findings posted in 

eZ-Audit by the Technology Directorate. The data source is the record of GLBA Audits managed 

by Next Gen PPO.
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Table 44: Performance Metric 4.2.B. Reduce incident reporting time at Institutions of Higher 

Education.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Baseline 

set in 

FY 2021

87.5 

days

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The target is an indicator of a school's ability to discover potential privacy breaches or 

cybersecurity incidents, which may impact Title IV student or financial information, and report 

them as required per their agreements.

Analysis of Progress:

FY 2021 will be the baseline year for this measurement. Average incident reporting time was 

87.5 days in FY 2020.

FSA integrated the institutions of higher education into the existing incident response process 

and automated case management system allowing accurate tracking of incidents and 

development of associated metrics.

Significant challenges exist with the institutions of higher education’s ability to properly identify 

and report on privacy breaches and potential compromises of information systems. Part of the 

challenge is associated with a lack of authoritative reporting standards and enforcement 

mechanisms. As an FY 2021 deliverable, FSA is addressing this with a task force that is 

developing implementation guidance and requirements for the institutions.

Throughout FY 2020, it has been noticed that institutions continually fail to report on privacy 

breaches and information system compromises. Often the incidents are discovered through 

FSA proactive cyber monitoring efforts or are reported through the news media. To address this 

metric, FSA is developing communication plans to increase schools’ awareness of the 

requirements and more specifically the need to report incidents as they occur. Briefings at the 

FSA annual conference is an example of this communication outreach effort.

In addressing COVID-19’s need to rapidly transition to remote education delivery environment 

many cybersecurity requirements and protections were initially overlooked requiring a significant 

investment in resources to properly protect information systems and student data.

Data Quality and Limitations:

The calculation of this performance metric is from the date, hour, and minute that the school 

detected the event to the time that FSA receives the report. In the event the school does not 

provide the information, the time is calculated from the time FSA discovers the cybersecurity 
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incident and the time that FSA is able to contact the appropriate school point of contact at the 

institution. The data source for cybersecurity incidents at institutions is self-reports from the 

schools, discovery through media reports, and information derived from internet research 

activities. The data is verified through a manual audit process comparing the security event 

report received from the school and the data discovered through incident response process with 

the data within Security Operations (SecOps).
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Performance Results by Strategic Goal 

Strategic Objective 4.3: Build an effective cybersecurity culture through employee awareness, 

training, and accountability focused on protecting systems and data.

Table 45: Performance Metric 4.3. Decrease the number of employee-related cybersecurity 

events associated with inappropriate use, distribution, or storage of Personally Identifiable 

Information (PII) and financial information by 20% a year.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 1,800 1,713

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The target is an indicator of employees’ ability to properly oversee, store and distribute sensitive 

privacy and financial information.

Analysis of Progress:

FSA met its target for this metric with a result of 1,713 employee-related cybersecurity events in 

FY 2020. 

This is a new performance metric for FY 2020 that was defined prior to the full implementation 

of the Department’s data loss prevention email capabilities.

In FY 2020, the Department implemented an email monitoring system that automatically 

detects, blocks, and notifies the employee of inappropriate transmission of sensitive data 

reducing the potential for a breach to occur. The capability identified previously undetected 

behaviors that may be potential breaches. 

FSA relies upon self-reporting for those third parties. As part of continuous monitoring FSA is 

developing automated integration with the third parties for real time data visibility. The proactive 

blocking of privacy information transmitted through email has reduced the number of email 

related breaches while increasing employee awareness of their actions through automated 

notifications.

To address this metric, the expansion of continuous monitoring capabilities and data 

aggregation using cloud technologies will enhance the ability to rapidly identify and respond to 

inappropriate use, distribution, or storage of PII or financial information. Additional desktop 

computer data loss prevention technologies will automate the protection of sensitive data and 

alert users to potential inappropriate handling.

Data Quality and Limitations:

The performance metric is a numerical count of events-based exercise results and actual 

incident reports over time. The data source FSA SecOps, email reports, exercise results, and 

OCIO Data Loss Prevention metrics. The data is validated through a manual review of 
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automated reports from SecOps, which provide the test results for the cybersecurity exercises 

administer to employees.
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Performance Results by Strategic Goal 

Strategic Goal 5: Enhance the Management and Transparency 

of the Portfolio

Portfolio management and organizational transparency are two of the most important activities

required under FSA’s PBO legislation. But equally important, as FSA works to become a more 

customer-centric and outcome-based organization, is the need for FSA to measure its success 

based on the success of its customers in making improved borrowing decisions that lessen the 

burden of debt associated with their education. These efforts, as captured in Goal 5 of the 

FY 2020-24 Strategic Plan, will require enhanced analytic, risk management, performance 

management, and quality management capabilities to provide better outcomes for students and 

greater value to taxpayers. Insights from this work will help FSA guide operational interventions 

and inform policymakers and taxpayers about the risks and opportunities in the portfolio.

FSA will also use these insights to allocate resources, guide customer-centric decisions, and 

inform legislative or regulatory changes that would allow for better overall portfolio performance.

Goal 5 also outlines the necessity to maintain FSA’s commitment to transparency through the 

FSA data center and better management of the loan portfolio by performing analyses to help 

identify risks. Beyond the work to improve service to borrowers and customers, support 

responsible borrowing, and encourage repayment, FSA also recognizes the need for enhanced 

analytical performance management and risk management capabilities.

The strategic objectives under Goal 5 focus on providing data-driven analytics to support 

borrower decision-making and targeted engagement when interventions become necessary. A 

final key to success in building a 21st Century organization, particularly with the long-term 

execution of the Next Gen initiative, is FSA’s adoption of an outcome-based approach in its 

vendor acquisition strategy. The enhanced approach to vendor performance and quality 

management will improve transparency and collaboration and contribute to better outcomes for 

students and taxpayers.

Strategic Goal 5 includes the four strategic objectives listed below:

• Strategic Objective 5.1:

Improve the management and transparency of FSA’s student loan portfolio performance.

• Strategic Objective 5.2:

Provide analytics and operational support for a customer-centric, data-driven,

performance-based organization.

• Strategic Objective 5.3:

Leverage portfolio analytics to drive improved outcomes for customers and taxpayers.

• Strategic Objective 5.4:

Increase vendor performance through quality management activities centered on

customer service and product delivery.
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In FY 2020, FSA had four objectives under this goal. These objectives included 14 metrics. Of 

these 14 metrics, 4 were met or exceeded, 2 metrics were not met for this goal, and 1 metric did 

not have sufficient data. Additionally, seven metrics are baselined in FY 2020.
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Strategic Objective 5.1: Improve the management and transparency of FSA’s student loan 

portfolio performance.

Table 46: Performance Metric 5.1.A. Initiate monthly reporting to the public through the FSA 

data center.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Establish

specific

number of

public 

reports

56

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

FSA’s FY 2020 target related to Performance Metric 5.1.A. was to establish a specific number of 

published FSA Data Center reports suitable for monthly reporting.

Analysis of Progress:

FSA met its target for this metric by establishing 56 specific reports to be published monthly.

In FY 2020, FSA’s Enterprise Data Directorate assessed the reports published on its FSA Data 

Center website to determine feasibility for monthly reporting. Published reports span the student 

aid lifecycle from application through repayment. In determining the reports most suitable for 

monthly reporting, FSA considered how likely the data was to change in each month, privacy 

implications if the data were to be published monthly, and potential benefit to customers.

Most published reports are tied to a specific award year data or represent a snapshot of the 

outstanding portfolio as of a specific point in time. Award year disbursement data is currently 

provided quarterly to allow customers to monitor progress throughout an award year. Further 

segmentation would make it difficult to track comparisons over time and increase the likelihood 

of a privacy disclosure. Due to the size of FSA’s portfolio, most portfolio snapshots do not 

significantly change from month to month. As a result, FSA focused its efforts on 

production-based reports, particularly those related to application volume.

Through this analysis, FSA identified a total of 56 reports for monthly reporting, including the

FAFSA by High School state-level reports (54), the PSLF Report, and the BD Report. These 

reports have been published at least monthly on the FSA Data Center website 

(Studentaid.gov/data-center) since January 2020.

Data Quality and Limitations:

FSA leverages a data request process to ensure queries are written by one subject matter 

expert and validated separately by a second subject matter expert to help ensure consistency 

and accuracy. Queries used to produce FSA Data Center reports are required to go through this 
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data request process. Subject matter experts also review results prior to publication to help 

identify any potential areas of concern.
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Table 47: Performance Metric 5.1.B. Timeliness of FSA’s ability to respond to statutorily 

mandated reports. 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Average 

of no

more than

30 days

N/A

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The methodology associated with the Target Context for the performance metric has not been 

established. No measurable data is available at this time. 

Analysis of Progress:

FSA is working to define the methodology associated with the specific reports to be included 

within the performance metric. In FY 2021, FSA will define the statutorily mandated reports, as 

well as the source to be utilized to manage the submission of the reports to the Department 

within 30 days or less. There is no measurable data to be provided for FY 2020.

Data Quality and Limitations:

N/A.
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Table 48: Performance Metric 5.1.C. Outstanding Direct Loan Portfolio in Current Repayment 

Status.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 85.4% 85.7% 86.5% 86.7% Baseline 93.7%

Performance Result Met Met Met Met Baseline

*Note: Formerly C.2 in FSA FY 2019 Annual Report.

Target Context:

This metric demonstrates an increase or decrease in the percentage of FSA loan portfolio 

dollars in a current repayment status. Current Repayment is defined as the percentage of Direct 

Loan principal and interest identified as being in an “active repayment” status. For this metric, 

loans are defined as being in “active repayment status” if they are being serviced by a 

non-default servicer, payments are temporarily suspended (in school/grace or 

deferment/forbearance), and if they have not been identified as being in non-defaulted 

bankruptcy, at the default servicer or otherwise excluded (e.g., due to a TPD determination). 

Direct Loans are further categorized as being “Current” if no more than 30 days have passed 

since the next payment date.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric due to the changes in borrower 

repayment as a response to COVID-19 and FSA’s implementation of the CARES Act legislation.

Through FY 2020, the four-quarter average rate is 93.7 percent. This includes the 100 percent

rate for Quarter 4.

Per the CARES Act, Direct Loan servicers cured existing delinquencies and generally also 

cured the delinquencies of borrowers who “opted out” of the CARES Act forbearance yet did not 

make payments. Although the CARES Act was first implemented during late March and early 

April, Quarter 3 (which ended on June 30, 2020) did not have a 100 percent repayment rate 

because changes in borrower status that occurred within the quarter, which influenced the 

calculation. However, FSA will not manually adjust Quarter 3 reporting.

The rates for FY 2014 through FY 2019, respectively, are 82.7 percent, 83.9 percent, 

85.4 percent, 85.7 percent, 86.5 percent, and 86.7 percent. Performance has improved in recent 

years primarily due to lower enrollment/loan origination at higher-risk schools over the past 

decade.

CARES Act related accomplishments include curing loans delinquent as of March 13 and then 

curing delinquencies which occurred during the CARES Act, such as borrowers who “opted out” 

of the forbearance but then realized they were not ready to make payments. CARES Act related 

challenges include setting a baseline—in light of uncertainty about not only the pandemic itself 

but also how long the borrower benefits will continue and ramping up communications and 

default aversion efforts after a long period of time when most borrowers were not required to 

make payments.
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With executive action extending CARES Act benefits through December 2020, FSA and 

servicers will face a heavy burden in “converting” millions of borrowers to active repayment at 

the same time, with a certain proportion becoming delinquent, at least initially. (According to 

FSA operations, the first due date after December 2020 would be during February 2021 for 

most borrowers.) Thus, this metric will remain at 100 percent, or just below, for one or more 

additional quarters.

Data Quality and Limitations:

The data source is NSLDS database. The calculation uses the rounded results appearing in the 

FSA Data Center’s Direct Loan Delinquency report. The fiscal year metric is a moving average 

of the four quarters. It is the outstanding principal and interest balance of “current” Direct Loans 

in the active repayment status divided by the total principal and interest balance of Direct Loans 

in an active repayment status at the non-default servicers. The metric result is calculated as a 

four-quarter moving average as of September 30 of the current fiscal year (September 30,

2020). This allows FSA to account for changes relating to seasonality and indirect factors that 

could be false indicators of change. FSA also continues to monitor overall performance of the 

federal loan servicers to identify any areas where errors have occurred and notifies servicers of 

results and corrective actions as needed.

The CARES Act requirement for the FSA loan servicers to cure delinquencies highlights small, 

anomalous data and thus facilitated better understanding, as well as targeted data quality 

analyses. For example, with so few loans in delinquency, an examination of those loans 

revealed that most of the remaining loans greater than 360 days delinquent were not actually on 

their way from the servicer to Debt Management and Collections System (DMCS) but rather are 

rehabilitations which recently transferred from DMCS to the servicer, with the “days delinquent” 

reflecting the loan’s condition from years ago, prior to the transfer to DMCS. A much-smaller 

group represents loans transferred to current servicers years ago from decommissioned 

servicers where reporting is manual.

Thus, while the point-in-time repayment rate for Quarter 4 rounds to 100 percent, Quarter 3 

(June-end) was 97.3 percent because the 2.7 percent represented the stale late-state 

delinquencies discussed above. FSA does not plan to go back and adjust the data for these 

anomalies and instead the adjustments begin with Quarter 4.
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Table 49: Performance Metric 5.1.D. Percentage of borrowers who are in a positive repayment 

status within the first three years of student loan repayment.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This new metric will track the percentage of Direct Loan borrowers whose loans are in a positive 

repayment status within the first three years after their loans entered repayment (maturity). FSA 

will use fiscal year maturity cohorts. Similar to College Scorecard and other repayment rate 

metrics, the universe will exclude military deferments, in-school deferments, and non-defaulted 

open bankruptcy status, as these are loan statuses wherein borrowers are not billed and not 

expected to pay. FSA will employ EDWA consolidation linking framework in case there are 

consolidations during a grace period (which are permitted) or during the early years of 

repayment, so that those borrowers do not “fall out” of the cohort.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric, but the methodology for the calculation 

has not been approved. At present, no data is currently available, and the baseline study will 

continue into FY 2021.

This is a new metric and FSA has developed a preliminary methodology/logic for the queries. 

The Enterprise Data Team will be looking at examples of results from various timeframes during 

October 2020. Anticipated challenges include analyzing trends on a comparable basis across 

fiscal year repayment cohorts and determining whether, for a typical fiscal year ending the 

previous September 30, the results will be representative by September 30 for annual reporting. 

This data exploration work will enable FSA to establish a baseline and set a target in FY 2021. 

To produce comparable results across time, the methodology, similarly to the cohort default 

rate, will check for “success” at the end of the third fiscal year. A loan which was in a positive 

repayment status for 18 months but was not in a positive repayment status at the end of the 

third fiscal year will not be counted as in a positive repayment status.

Additional challenges to be considered related to the CARES Act include setting a baseline—in 

light of uncertainty about not only the pandemic itself but also how long the borrower benefits 

will continue and ramping up communications and due diligence (delinquency resolution) efforts 

after a long period of time when most borrowers were not required to make payments. With 

executive action extending CARES Act benefits through December 2020, FSA and servicers will 

face a heavy burden in “converting” millions of borrowers to active repayment at the same time, 

with a certain proportion forecasted to initially become delinquent.
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For the universe of this metric, the date entered for repayment occurs six months after the 

borrower graduates, drops out, or drops below half-time. The pandemic may impact the 

consistency of these lifecycle transitions.

Data Quality and Limitations:

The source is the EDWA servicing data. EDWA receives data from the Direct Loan servicers 

over the Student Aid Internet Gateway connection/interface. Each Direct Loan servicer reports 

weekly, and not all on the same day. The Direct Loan servicers report on different days of the 

week in order to manage FSA’s operational burden. FSA monitors overall performance of the 

federal loan servicers to identify any areas where errors have occurred and notifies servicers of 

results and corrective actions as needed.
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Table 50: Performance Metric 5.1.E. Persistence among first-time filing aid recipients. 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 79.7% 82.6% 82.5% 82.8% 83–84% 81.0% 

Performance Result Met Met Met Met Not Met

*Note: Formerly A.2 in FSA FY 2019 Annual Report. 

Target Context:

FAFSA application persistence among first-time filing aid recipients is likely lower this year due 

to the COVID-19 pandemic and the uncertainty about fall enrollment for many returning 

students.

Analysis of Progress:

FSA did not meet its target for this performance metric with persistence among first-time filing 

aid recipients measuring 81.0 percent. 

In May 2020, an email campaign specifically focused on returning FAFSA filers resulted in an 

increase in FAFSA filing by returning applicants this summer, which helped to prevent the 

decline in this metric from being worse, and witnessed FAFSA filing rebounding for this group 

from an all-time low for the year in March 2020, likely the result of the COVID-19 pandemic and 

students being sent home.

In March 2020, COVID-19 resulted in most colleges and universities across the country moving 

to an on-line only model, which meant that students were not in the classroom or on-campus 

seeing cues to remind them to file the FAFSA. During this time of national emergency, it is likely 

that some percentage of students hesitated or delayed filing a FAFSA for the sophomore year. 

In addition, a result of COVID-19 was that many low-income families had a change in financial 

circumstances and this may have prevented some students from returning to school because 

the gap between Title IV aid and the cost of attendance was too large for a student or family to 

fill given their compromised financial situation due to loss of employment.

Once more Americans return to work or find new employment, FSA expects this metric to 

increase in FY 2021 as more Americans will have the ability to pay for postsecondary education.

Data Quality and Limitations:

Data results are ascertained through standardized system queries. These queries are used to 

rerun and match calculations for earlier cycles as part of the verification and validity 

assessment. The data source is EDWA and CPS Strategic.
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Strategic Objective 5.2: Provide analytics and operational support for a customer-centric, 

data-driven, performance-based organization.

Table 51: Performance Metric 5.2.A. Using the Enterprise Risk Management (ERM) Maturity 

Model, move the organization towards a “Risk Intelligent” position. The model defines 

organizational progress in the following way:

• 1 = Initial;

• 2 = Fragmented;

• 3 = Integrated; and

• 4 = Risk Intelligent. 

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 1.5 1.6

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The overall target for FY 2021 is to move the organization from Fragmented to a more 

Integrated organization where leadership understands the importance of risk management and 

considers it in decision making. In addition, the metric will move in a positive direction as risk 

discussions are more structured and occur at varying degrees relating to strategy setting. In an 

Integrated organization, most risks are aligned to strategies and risk appetite is formally defined 

and is discussed as part of daily decision making by senior leadership.

FSA’s goal is to eventually move the organization to be Risk Intelligent where leadership 

continually demonstrates a strong commitment to risk management with a strong tone at the top 

and a formal governance structure is in place with monthly meeting cadence. Additionally, a 

Risk Intelligent organization has a formal risk appetite which has been communicated and risk 

assessment methodologies, tools, and templates are standardized, understood, and used 

throughout the organization and performance is measured against strategic goals and linked to 

key risk indicators.

Analysis of Progress:

FSA met its target for this performance metric by attaining a 1.6 on the Enterprise Risk 

Management (ERM) Maturity Model.

During FY 2020, Risk Management created risk dashboards, developed risk products for 

evaluation of risk earlier in the planning/decision-making process, continued promulgation of risk 

products and created and conducted enterprise-level training. The office continues to build out 

risk focus areas and work closely with project/program teams to penetrate lower altitudes. The 

challenge a reliance on survey results and the response rate from key stakeholders.
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Data Quality and Limitations:

The Risk Maturity Matrix is directly linked to the Committee of Sponsoring Organizations of the 

Treadway Commission ERM Framework, Enterprise Risk Management: Integrating with 

Strategy and Performance. The data is derived from surveys to stakeholders throughout the 

organization and is compiled and assessed against the ERM Maturity Matrix. The evaluation 

and validation of data is subjective within guidelines established by the model.
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Performance Results by Strategic Goal 

Table 52: Performance Metric 5.2.B. Implementation timeline for FUTURE Act.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Establish

specific

timeline and

collaborative

agreement

with IRS

N/A

Performance Result N/A* N/A* N/A* N/A* N/A

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

The FUTURE Act was enacted on December 19, 2019. This law allows the Internal Revenue 

Service (IRS) to disclose certain federal tax information to the Department for the purposes of 

providing recertification of income for income-contingent or income-based repayments of 

student loans; determining discharges of loans based on TPD; and determining the amount of 

student financial aid under the HEA. 

The implementation of the FUTURE Act requires numerous systems changes and security 

upgrades in FSA to comply with both IRS security requirements and the provisions of the Act 

itself. FSA is working closely with more than 100 stakeholders and 15 offices from the 

Department, the IRS, and Treasury to implement the FUTURE Act.

Analysis of Progress:

FSA moved forward with specific activities to achieve the target identified within the FY 2020–24 

Strategic Plan. However, the establishment of a timeline and collaborative agreement with the 

IRS is beyond FSA’s independent authority to achieve and therefore the results are not currently 

available. The efforts made by the FSA team have laid the groundwork for meeting the target in 

FY 2021, barring any unforeseen changes.

Since the FUTURE Act was enacted, the Department has completed more than 210 working 

sessions with more than 130 stakeholders and prepared more than 28 briefings to executive 

stakeholders and congressional committees. FSA has also been able to accomplish milestones 

in implementing the law, including but not limited to:

• Submitting the mandatory 90-day joint FUTURE Act report to Congress, 

• Finalizing the FY 2020 Interagency Agreement with the IRS, 

• Finalizing the schedule and activities for enabling the FUTURE Act Direct Data 

Exchange with the IRS, 

• Working with external partners such as the National College Access Network and the 

National Association of Financial Aid Administrators to enable the FUTURE Act, and
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• Implementing the FAFSA and TPD simulators, which will allow FSA to gather feedback 

from students and borrowers on the impacts of the FUTURE Act to the FAFSA and TPD 

processes. The TPD simulator has been implemented. The FAFSA simulator is not 

scheduled to be implemented until December 2020.

FSA has established a notional implementation schedule. The following critical dependencies 

need clarification to ensure that the notional implementation timeline can be finalized: 

• The implementation of the FUTURE Act requires numerous systems changes and 

security upgrades within FSA to comply with both IRS security requirements and the 

provisions of the Act itself. The timeline of implementing these system changes and 

upgrades depend on funding available to dedicate towards these activities.

• The Department and the IRS are closely tracking potential changes to the FUTURE Act, 

which impacts how the FUTURE Act FAFSA solution is implemented by schools, state 

agencies, scholarship organizations, and their respective third-party contractors.

• The Department is closely coordinating the implementation of the FUTURE Act with 

several critical Next Gen FSA initiatives to ensure the mitigation of any potential 

duplication and redundancy in developing the solution for the TPD, Income Driven 

Repayment (IDR), and FAFSA programs. Any delays or risks associated with 

implementing the Next Gen FSA initiatives may impact the FUTURE Act development 

and implementation timeline.

Data Quality and Limitations:

As mentioned above, the FUTURE Act team continues to work closely with other offices within 

the Department, the IRS, and Treasury to establish a FUTURE Act implementation schedule. 

While the team has established a notional implementation schedule, all offices continue to work 

on critical dependencies to finalize the implementation schedule. Variances to the schedule

caused by these dependences will impact the quality of the implementation timeline. The 

FUTURE Act team also works closely with the ERM Office to monitor any risks and limitations.
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Table 53: Performance Metric 5.2.C. Error rate discovered through income verification 

activities for borrowers on an IDR plan.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric tracks error rate discovered through income verification activities for borrowers on 

an IDR plan.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric, but the pilot program initiated in 

FY 2020 to measure this error rate was discontinued due to the changes made by the CARES 

Act. When borrower payments begin again, and applications for IDR restart, FSA will resume 

the pilot program. At present, no data is currently available, and the baseline study period will 

extend into FY 2021.

Data Quality and Limitations:

N/A.
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Strategic Objective 5.3: Leverage portfolio analytics to drive improved outcomes for customers 

and taxpayers.

Table 54: Performance Metric 5.3.A. Identify and provide intervention actions for customers at 

risk of default.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – –

Development

and testing of 

default

intervention

program

Developed, 

tested, and 

deployed 

two projects

Performance Result N/A* N/A* N/A* N/A* Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric will track the development, testing, implementation, evaluation, monitoring and 

updates to Statistical and Machine Learning Models, methodologies, experimental designs, and 

interventions used in reducing customer risk of negative outcomes such as default. There will be 

multiple projects wherein models will be developed and deployed for assessing which 

customers would benefit most from receiving certain interventions such as specific emails, 

phone calls, skip tracing, and other actions. Benefit shall be measured on a project by project 

basis but will typically consider default related outcomes as well as costs of performing 

interventions. This metric will track how many projects exist and what phase of the development 

lifecycle they are in. Each project will have its own method of measuring its effectiveness once 

deployed with consideration to its experimental design and goals.

Analysis of Progress:

FSA met its target for this performance metric by developing, testing, and deploying two projects 

in support of the default intervention program. The projects are the applicant risk model and the 

TPDR (third-party debt relief) company fraud model.

FSA has developed statistical models to measure individual customer and transaction-level 

risks at different points in the student aid lifecycle. Risk scores are then used to drive action. 

Development on the first of these types of projects that uses modeling to reduce negative 

customer outcomes started in calendar year 2018 with a fraud modeling pilot. It has expanded 

to be the first of FSA’s projects in this area, called the TPDR model. To ensure FSA systems 

and taxpayer funds are protected, FSA has developed models and analysis to support 

identification of fraudulent activity, conducting outreach to customers at high risk of being 

harmed by bad actors and assisting them in resolving issues associated with their accounts.

Models are used to support customers by providing targeted, personalized communications, 

directing customers to self-service tools FSA has made available to support planning and 

decision making. During FY 2019–20, FSA sent approximately 962,000 emails to customers 

identified as having high default risk at time of FAFSA submission and 716,000 emails to high 

risk customers at time of loan disbursement. The efficacy of this second project is yet to be 
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determined because it will time for borrowers to leave school, enter repayment, and move 

through the lifecycle, so FSA can perform statistical analyses of the results.

Communications to customers at different points in the student aid lifecycle need to be 

coordinated to avoid confusing customers. Limited ability to coordinate FSA communications to 

customers with servicer communications has caused FSA to focus on areas of the lifecycle 

where servicers do less outreach. With the expectation of increased customer service 

associated with Next Gen FSA and the COVID-19 related forbearances, FSA now expects a 

greater opportunity to push these projects into parts of the lifecycle where servicer 

communications are prevalent.

Data Quality and Limitations:

The projects within the default prevention definition are expected to use new interventions and 

actions to reduce customer risks, therefore it is necessary to first collect data on customer 

outcomes given they have received the new interventions and actions to support Contextual 

Bandits model training. Different methodologies for initially collecting data have been designed 

and implemented in a reusable fashion. Contextual Bandits models have been designed to 

further collect required model training data, incorporating experimental design into the model 

development process. Data collected from projects for use in creating and updating models has 

a high probability of bias due to impacts from COVID-19, especially when analyzing outcomes 

of default, based on the CARES Act forbearance.

This performance metric will leverage high-level project data as its source: the project plans 

FSA uses for each individual intervention project, and possibly project specific measures to be 

determined on a project-by-project basis. Current Information Technology infrastructure makes 

model development, deployment, and maintenance difficult, complex, and costly. FSA has 

performed market research on tools that would help with tools the organization would like to 

acquire in FY 2021 to advance this effort.
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Table 55: Performance Metric 5.3.B. Default Rate by borrower count.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This new metric provides the rate of Direct Loan borrowers entering default. It is a quarterly 

metric and similar to other repayment metrics, uses a four-quarter rolling average to address

seasonal variations that are common in the loan program.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric due to the changes in borrower 

repayment as a response to COVID-19 and FSA’s implementation of the CARES Act legislation.

FSA has several years of historical results but did not highlight FY 2020 as a baseline because 

of the CARES Act. Due to the implementation of the CARES Act, there are close-to-zero new 

defaults after March 2020. For this reason, FSA did not identify the FY 2020 actual result as the 

appropriate target or baseline for the performance metric. Developing a baseline will require 

additional analysis across the Department, FSA operations, and the servicer monitoring team.

Through June 2020 (Quarter 3), the four-quarter average rate is 1.1 percent. This includes the 

0 percent default rate in Quarter 3. As required by the CARES Act, Direct Loan servicers cured 

existing delinquencies and generally also cured the delinquencies of borrowers who “opted out” 

of the CARES Act forbearance yet did not make payments.

The corresponding four-quarter average for Quarter 3 of the fiscal years 2019, 2018, 2017, and 

2016, respectively, are 1.6 percent, 1.6 percent, 1.7 percent, and 1.9 percent. This metric shows 

a long-term downward trend, interrupted briefly during mid-2019 by the impacts of the 2017 and 

2018 natural disasters, particularly three historic hurricanes. Performance has improved in 

recent years primarily due to lower enrollment/loan origination at higher-risk schools over the 

past decade.

Defaults, like originations and disbursements, are a flow measure/event, in contrast to loan 

status, delinquency, and repayment plan, which are point-in-time data elements. For this 

reason, the data are not available until approximately the middle of the following month. Thus, 

new defaults in Quarter 4 are not available by the data collection deadline for annual reporting.

Data Quality and Limitations:

The metric leverages a report that is used for several other purposes, including the public-facing 

FSA Data Center. The report methodology was validated through FSA’s Data Retrieval Tool in 

2015. Because the nature of this metric is to compare to same quarter of earlier years and to 

calculate rolling four-quarter averages, this helps facilitate spotting anomalies. FSA also 
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continues to monitor overall performance of the federal loan servicers to identify any areas 

where errors have occurred and notifies servicers of results and corrective actions as needed. 

By design, the data directorate is separated from the servicers' staff and systems, so there is 

currently no systematic way to verify servicer reporting. For this reason, the data directorate 

worked with the servicer monitoring team during FY 2020 to address reporting issues identified.
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Table 56: Performance Metric 5.3.C. Percent of Borrowers > 90 days delinquent.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance 11.2% 10.9% 10.1% 9.8% Baseline 4.8%

Performance Result Met Not Met Met Met Baseline

*Note: Formerly B.2 in FSA FY 2019 Annual Report. 

Target Context:

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.

The calculation is the count of Direct Loan recipients with loans 91–360 days delinquent divided 

by the count of Direct Loan recipients with delinquencies 0–360 days. In other words, the 

denominator includes current repayment as well as delinquency. The calculation uses recipient 

counts, rather than borrower counts, because borrower counts would approximately double 

system demands. Delinquency rates by recipient count are slightly higher than by borrower 

count.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric due to the changes in borrower 

repayment as a response to COVID-19 and FSA’s implementation of the CARES Act legislation.

Through FY 2020, the four-quarter average rate is 4.8 percent. This includes the 0 percent rate 

for Quarter 4. Per the CARES Act, Direct Loan servicers cured existing delinquencies and 

generally also cured the delinquencies of borrowers who “opted out” of the CARES Act 

forbearance yet did not make payments. Although the CARES Act was first implemented during 

late March and early April, Quarter 3 (June-end) didn’t have a 0 percent rate because, as 

detailed in Data Quality and Limitations below, most of apparently the “late-stage delinquencies”

in Quarter 3 turned out to be in current repayment or forbearance. However, FSA will not go 

back and manually adjust Quarter 3 reporting.

The rates for FY 2014 through FY 2019, respectively, are 14.0 percent, 13.0 percent, 

11.2 percent, 10.9 percent, 10.1 percent, and 9.8 percent. Performance has improved in recent 

years primarily due to lower enrollment/loan origination at higher-risk schools over the past 

decade.

The challenges in calculating this performance metric as related to CARES/COVID-19 include 

setting a baseline—in light of uncertainty about not only the pandemic itself but also how long 

the borrower benefits will continue and ramping up communications and default aversion efforts 

after a long period of time when most borrowers were not required to make payments. With 

executive action extending CARES Act benefits through December 2020, FSA and servicers will 

face a heavy burden in “converting” millions of borrowers to active repayment at the same time, 

with a certain proportion becoming delinquent, at least initially. (According to FSA operations, 
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the first due date after December 2020 would be during February 2021 for most borrowers.) 

Thus, this metric will remain at 0 percent, or just above it, for one or more additional quarters.

Data Quality and Limitations:

The data source is the NSLDS. The calculation uses the rounded results appearing in the FSA 

Data Center’s Direct Loan Delinquency report. The fiscal year metric is a moving average of the 

four quarters. This allows FSA to account for changes relating to seasonality and indirect factors 

that could be false indicators of change. FSA also continues to monitor overall performance of 

the federal loan servicers to identify any areas where errors have occurred and notifies 

servicers of results and corrective actions as needed.

The CARES Act’s requirement for the FSA loan servicers to cure delinquencies highlights small

anomalous data and thus facilitated better understanding, as well as targeted data quality 

analyses. For example, with so few loans in delinquency, an examination of those loans 

revealed that most of the remaining loans greater than 360 days delinquent were not actually on 

their way from the servicer to DMCS but rather are rehabilitations which recently transferred 

from DMCS to the servicer, with the “days delinquent” reflecting the loan’s condition from years 

ago, prior to the transfer to DMCS. A much-smaller group represents loans transferred to 

current servicers years ago from decommissioned servicers where reporting is manual.

Therefore, while the point-in-time rate for Quarter 4 rounds to 0 percent, Quarter 3 (June-end) 

was 3.2 percent, because the 3.2 percent represented the stale late-state delinquencies 

discussed above. FSA does not plan to go back and adjust for these anomalies and instead the 

adjustments begin with Quarter 4.
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Performance Results by Strategic Goal 

Table 57: Performance Metric 5.3.D. Percentage of borrowers who did not make the first three 

payments.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This new metric will track the percentage of Direct Loan borrowers who make the first three 

payments after entering repayment (maturity). FSA will use fiscal year maturity cohorts. Similar 

to College Scorecard and other repayment rate metrics, the universe will exclude military 

deferments, in-school deferments, and non-defaulted open bankruptcy status, as these are loan 

statuses where borrowers are not billed and not expected to pay. FSA will employ EDWA’s

consolidation linking framework in case there are consolidations during a grace period (which 

are permitted) or early in repayment, so that those borrowers do not “fall out” of the cohort.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric, but the methodology for the calculation 

has not been approved. At present, no data is currently available, and the baseline study will 

continue into FY 2021.

This is a new metric and FSA has developed a preliminary methodology/logic for the queries. 

The Enterprise Data Team will be looking at examples of results from various timeframes during 

October 2020. Anticipated challenges include analyzing trends on a comparable basis across 

fiscal year repayment cohorts and determining whether, for a typical fiscal year ending the 

previous September 30, the results will be representative by September 30 for annual reporting. 

This data exploration work will enable FSA to establish a baseline and set a target in FY 2021.

Additional challenges to be considered related to CARES Act include setting a baseline—in light 

of uncertainty about not only the pandemic itself but also how long the borrower benefits will 

continue; and ramping up communications and due diligence (delinquency resolution) efforts 

after a long period of time when most borrowers were not required to make payments. With 

executive action extending CARES Act benefits through December 2020, FSA and servicers will 

face a heavy burden in “converting” millions of borrowers to active repayment at the same time, 

with a certain proportion forecasted to initially become delinquent.

For the universe of this metric, the date entered for repayment occurs six months after the 

borrower graduates, drops out, or drops below half-time. The pandemic may impact the 

consistency of these lifecycle transitions.

Data Quality and Limitations:

The source is the EDWA servicing data. EDWA receives data from the Direct Loan servicers 

over the Student Aid Internet Gateway connection/interface. Each Direct Loan servicer reports 
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weekly, and not all on the same day. The Direct Loan servicers report on different days of the 

week in order to manage FSA’s operational burden. FSA monitors overall performance of the 

federal loan servicers to identify any areas where errors have occurred and notifies servicers of 

results and corrective actions as needed.
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Performance Results by Strategic Goal 

Table 58: Performance Metric 5.3.E. Percentage of customers who borrow less than the 

maximum loan amount.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline N/A

Performance Result N/A* N/A* N/A* N/A* Baseline

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This new metric will track the percentage of borrowers who borrow less than the maximum 

amount during a particular academic year. This metric will focus on undergraduate student 

borrowers because there are no maximum borrowing amounts for graduate/professional 

students. Unlike National Center for Educational Statistics, which collects similar data every four 

years, FSA will not be able to track non-borrowers and non-Title IV recipients. FSA generally 

only receives data on its customers.

Analysis of Progress:

FY 2020 is a baseline year for this performance metric, but the methodology for the calculation 

has not been approved. At present, no data is currently available, and the baseline study will 

continue into FY 2021.

This is a new metric and FSA has developed a preliminary methodology/logic for the queries. 

The Enterprise Data Team will be looking at examples of results from various timeframes during 

October 2020. Challenges will include looking at trends on a comparable basis across recent 

award years and determining whether, for a typical award year ending June 30, the results will 

be stable/representative by September 30 of each year. This data exploration work will enable 

FSA to establish a baseline and set a target.

Because the maximum permitted loan amount varies depending on the student’s year in school 

and dependency status, FSA will examine trial results to select the most-consistent, 

representative results over time for this metric. FSA will use a weighted average of dependent 

and independent student borrowers. While many students are part-time, FSA will need to accept 

as correct the reporting of the student’s academic level, which determines the maximum amount 

the student is permitted to borrow. Another challenge will be that a small percentage of 

undergraduate students have access to much-higher borrowing amounts than normal—students 

in certain undergraduate health professions programs, such as pharmacy. Without having the 

access to the actual registrar office data (as National Center for Educational Statistics does), 

FSA will need to study trial results and work to mitigate these outliers.

During times of regulatory change (the 2000s) or economic stress (the great recession), the 

pattern of loan origination and disbursement activity tends to change, due to shifts in the types 

of students and schools driving the disbursement activity. COVID-19 serves as the major 

unknown here.
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Data Quality and Limitations:

The source of the data is the origination and disbursement data stored in EDWA. EDWA 

receives nightly feeds of these loan origination and disbursement data from COD. FSA has 

found this data stream to be reliable and of high quality, as the data are replicated from COD to 

EDWA. The EDWA vendor has been running FSA’s COD system for nearly two decades and 

monitors nightly for errors related to production and internal processes.

Data limitations include the time it takes for an award year’s results to “settle.” As of the end of 

an award year (June 30), not all the disbursement activity has been reported to FSA. Even after 

all the disbursement activity has been reported, schools and other data providers continue to 

submit adjustments, edits, and cancellations for a substantial period. One way to mitigate 

having to wait too long for settled data would be to use the same approach of the Department’s

budget office and the agency’s financial auditors—pull the data at the same time each year. 

This method provides comparable results over time.
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Performance Results by Strategic Goal 

Strategic Objective 5.4: Increase vendor performance through quality management activities 

centered on customer service and product delivery.

Table 59: Performance Metric 5.4. Percentage of quality assurance reviews for the external 

workforce (servicers) reviewed annually.

Fiscal Year

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Actual Actual Target Actual

Performance – – – – 25% 11.1% 

Performance Result N/A* N/A* N/A* N/A* Not Met

*Note: New performance metric for FY 2020. Prior-year data is not available under this metric.

Target Context:

This metric tracks the number of quality assurance reviews conducted by Operational 

Improvement and Oversight (OIO) to measure the performance of loan servicers. The objective 

is to continuously enhance FSA’s oversight and management of loan servicers by evaluating the 

efficiency and effectiveness of loan servicers’ compliance with contractual terms and statutory 

requirements.

Analysis of Progress:

FSA did not meet its target for this metric with a result of 11.1 percent.

In FY 2020, many of the personnel initially assigned to OIO were not experienced in conducting 

“performance-based” quality assurance reviews. Although these personnel have audit 

experience, the review and assessment of performance and compliance proved to be a 

significant challenge. Additionally, the lack of familiarity with the many programs and processes 

executed by the loan servicers contributed to OIO not meeting the target.

To overcome these challenges and meet the performance metric established, OIO has 

developed a framework and charter which outlines its purpose, authority, and responsibilities. 

Additionally, training has been provided to strengthen the performance-based audit capability of 

assigned staff. Lastly, review plans will be developed prior to all quality assurance reviews to 

ensure staff’s quality assurance review activities focus on performance and compliance.

Data Quality and Limitations:

The performance metric is calculated by the number of completed QA reviews for all loan 

servicers. The source of the data is internal OIO reports, based on number of completed QA 

reviews.
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Fiscal Year 2020 Accomplishments of Federal Student Aid 

Fiscal Year 2020 Accomplishments of Federal 

Student Aid

During FY 2020, FSA realized additional accomplishments that were not measured specifically 

by the performance metrics implemented to measure performance against the FY 2020–24 

Strategic Plan. Although not measured by FSA performance metrics, these accomplishments 

were the result of initiatives FSA undertook to support the implementation of the strategic plan 

or legislative changes. This section describes its additional accomplishments.

FSA realized the following additional accomplishments in support of Strategic Goal 1:

Empower a High-Performing Organization.

• FSA established FSA Regional Representatives (RR). Members are senior 

representatives for their Regional Office, responsible for collaborating with internal and 

external parties to ensure the health, safety, and welfare of FSA regional staff and 

day-to-day administrative functions of the region. The RR team meets monthly with the 

COO to discuss matters, both employee and business-related, that are important to 

Regional staff.

• The Human Resources Office within FSA launched the FSA Human Capital Working 

Group (HCWG) comprised of representatives from across the organization. The purpose 

of the HCWG was to increase the human capital capability throughout FSA, while 

incorporating best practices in hiring and recruitment to establish FSA as a model PBO 

and employer of choice. Actions taken by HCWG in FY 2020 include:

o Developed a staffing position priority process to manage the execution of priority 

hiring in FY 2020, which allowed for hiring in critical areas to ease workload 

distribution in the organization. The process was utilized to successfully increase 

hiring numbers in excess of FY 2019 baseline numbers.

o Formed three committees to address: processes and systems around 

preboarding/onboarding and post-boarding of new hires; strategic workforce 

planning; and employee engagement and morale.

o Utilized client feedback from FY 2019 and FY 2020 to develop new onboarding 

framework. Successfully onboarded more than 400 new hires in FY 2020; tripling the 

number onboarded in FY 2019. In conjunction, the team implemented the 

Onboarding Contingency Plan for new hires at all FSA locations to continue progress 

during the COVID-19 global pandemic.

• FSA established a Working Group of key stakeholders across FSA and the Department 

to conduct a comprehensive study of core competencies for FSA’s mission critical 

positions. Utilized the study to examine FSA’s statutory hiring flexibilities in comparison 

to similar federal financial-related agencies.

• FSA executed the first virtual instructor-led Foundations of Leadership Program, an 

intensive competency-based development program geared to high-performing General 

Schedule (GS) 11–13 or equivalent non-supervisory employees.
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• FSA established a multifaceted Senior Executive Service Master Class which held a 

62 percent average participation rate among eligible participants. The Master Class was 

inclusive of the following specialized content to strengthen the FSA leadership cadre:

o Executive Core Qualification: Consultation and Review. 

o Executive Core Qualification: Part II. 

o Next Jump Leadership Academy sessions in alignment with the established 

Executive Learning Plan requirement. 

• FSA collaborated with OCIO through technology support and process documentation that 

enabled the Department to achieve an A+ on the Federal Information Technology

Acquisition Reform Act scorecard. FSA’s cost savings and cost avoidance contribution 

were 41 percent of the overall Department score. The systems contributing to the A+ 

score is Next Generation Data Center, COD investment, Financial Management System

investment and Enterprise Business Collaboration investment reported. The results of 

FSA’s effort totaled $96.8 million across the entire Departmental Information Technology

Portfolio.

• In response to COVID-19, the Facilities, Security, and Emergency Management Team 

established a working group and expeditiously created an FSA Business Continuity Plan 

to ensure that mission essential functions could proceed, either virtually or within 

Headquarters and Regional locations. The Business Continuity Plan was inclusive of 

organizational efforts for processing student aid applications and determining eligibility, 

as well as ensuring staff could access mechanisms to support the delivery of funds to 

participating postsecondary institutions and the oversight of loan servicers.

FSA realized the following additional accomplishments in support of Strategic Goal 2:

Provide World-Class Customer Experience to the Students, Parents, and Borrowers We Serve.

• FSA ensured the timely implementation of, and compliance with, CARES Act provisions 

to ensure that students, parents, and borrowers received the CARES Act benefits to 

which they were entitled. It was also necessary for FSA to effectively manage the 

CARES Act funding in accordance with the statute. FSA’s execution of the actions is 

outlined below:

o Under the CARES Act, approximately 41 million borrowers had their interest rate 

adjusted to 0 percent and their payments suspended. 

o Ensured all CARES Act refunds were processed timely, within one week of receipt 

for manual processing. This ensured that borrowers that were still subject to AWG or 

TOP were promptly refunded as FSA worked to turn off these garnishments (with 

employers) or offsets (with Treasury).

o Created a solution to allow pre-default borrowers the opportunity to suspend 

payments yet still yield the benefits associated with a variety of student loan 

programs or to opt out of the forbearance. To date, approximately 23.8 million

borrowers are taking advantage of the payment suspension period while 
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Fiscal Year 2020 Accomplishments of Federal Student Aid 

approximately 4.6 million borrowers have opted to continue making regular monthly 

payments.

o Developed a CARES Act $40 million spending plan to ensure execution and tracking 

of the $40 million provided for requirements to implement statutory provisions, 

including making changes to servicer systems/operations that support more than

40 million borrowers; moving more than 31 million borrowers into 

forbearance/stopped collections to suspend loan payments; expediting $2.5 billion in 

2.3 million TOP/AWG refund payments; sending notifications to borrowers; and 

implementing a communications campaign to inform more than 40 million borrowers 

about the CARES Act provisions.

• FSA saw robust borrower engagement on emails, which had open rates of nearly 

60 percent, two times higher than industry average for this type of communication 

engagement. Additionally, it provided opportunities for FSA to update email addresses 

on file for borrowers, thus increasing the reach of FSA to its entire portfolio. For the 

series of emails that were sent, FSA achieved a 96 percent delivery rate. 

• Based upon the July Forbearance/0 percent interest email sent to multiple borrower 

audiences in July, FSA saw a correlated 88 percent increase in web traffic to 

StudentAid.gov websites, which was likely due in part to the email communication and 

the fact that borrowers were following the email's call to action.

FSA realized the following additional accomplishments in support of Strategic Goal 3:

Increase Partner Engagement and Oversight Effectiveness.

• FSA published a series of updated data sets, reports, and other information regarding 

institutional outcomes and financial oversight including quarterly Heightened Cash 

Monitoring reports, Financial Responsibility Standards Requiring a Letter of Credit 

Report, Proprietary 90/10 Revenue Percentages Report, Financial Responsibility 

Composite Scores, Foreign Schools Gifts and Contracts Report, School Fines Report, 

and the Top 10 Program Review and Audit Findings Report. Starting in FY 2020, FSA 

also published information regarding Proprietary Institution Conversions in a first-ever 

disclosure on the FSA Data Center to provide increased transparency on the 

Department’s decisions regarding institutions’ nonprofit conversion requests.

• FSA issued more than 5,600 emails to directly inform, and granted requests for 

regulatory, administrative, or reporting relief and flexibilities to subsequently aid in the 

recovery efforts of, nearly 3,000 institutions, enrolling more than 2.3 million students 

touched by disasters such as hurricanes, earthquakes, and wildfires.

• FSA successfully calculated and released the FY 2017 Draft and Official Cohort Default 

Rates (CDRs) in September 2020 for more than 5,600 schools, guaranty agencies, and 

lenders. CDRs serve as a valuable compliance tool for FSA to assess school 

participation in the Direct Loan and Federal Pell Grant Programs. Publication of the 

CDRs further allows schools to submit appeals for various factors and adjustments to 

their CDRs, for which FSA also successfully adjudicated more than 140 CDR appeals 

this fiscal year.
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• During the COVID national emergency, FSA transformed its outreach and assistance 

efforts into dynamic virtual capabilities for institutions and financial aid partners. FSA 

redesigned a four-day in-person Title IV Fundamentals training session into a real-time 

online format for five successful sessions; fielded a new Virtual Technical Assistance 

tool aimed at MSIs and a virtual Training product for newly approved Title IV schools; 

and identified 72 MSIs that had not previously used the FSA LMS to virtually instruct on 

the availability and effective use on on-line learning resources. Additionally, FSA 

streamlined its outreach and on-boarding processes for Project Success, a program 

focused on pairing MSIs with guaranty agencies to address risk factors affecting 

graduation, retention, and CDRs. 

• FSA managed the flood of borrower, school partner, and systems communications 

related the COVID-19/CARES Act legislation. Employing time-sensitive communications, 

often around the clock, FSA coordinated with Department-wide officials and 

stakeholders to execute the publication of more than 20 CARES Act Electronic 

Announcements to the IFAP website from March through September 2020. FSA 

overcame extraordinary conditions to disseminate these critical updates and guidance 

on emergency relief measures, system updates, and flexibilities for school and other 

partners while not jeopardizing the timely dissemination of more than 100 total Electronic 

Announcements published to IFAP during the fiscal year.

• Next Gen PPO staff managed the successful implementation of CARES Act provisions 

assisting students who could not complete the spring term due to the pandemic. These 

changes, which involved often complex system upgrades done under extreme time 

pressure, included systematically cancelling $49.6 million in repayment obligations for 

11,451 withdrawing students on Direct Loans disbursed during the spring term as well as 

adjusting student subsidized loan usage limits and Pell Grant lifetime eligibility levels to 

remove aid disbursed to withdrawing students. Staff also successfully implemented other 

CARES Act flexibilities allowing schools to adjust Return of Title IV aid calculations and 

certain elements of the Campus-Based programs to minimize the impact of the 

pandemic.

• FSA made tremendous progress reviewing and resolving numerous Title IV compliance 

complaints received in the FSA Feedback Center and concerning institutions that 

participate in the Title IV programs. FSA began FY 2020 with 3,301 open compliance 

complaint cases that carried over from previous years, of which 2,742 had aged past 60 

days and were in a “backlog” state. Through the course of the year, FSA received an 

additional 3,837 cases, for a total volume of 7,138 cases. FSA experts reviewed and 

closed a total of 6,830 cases, leaving only 308 cases remaining open and carried into 

FY 2021. This represents a 91 percent decrease in the amount of cases that will need to 

be carried into the next fiscal year; a significant accomplishment that had not been 

achieved by the business unit since the creation of the FSA Feedback Center in July 

2016.

• FSA successfully developed processes to identify and monitor daily BD Refunds to 

ensure immediate assignment and completion based on requirements to ensure that the 

standard for refunds is met (two days) and that BD refunds are completed in one day. 

There are 8,319 BD borrowers who have had 1 or more refunds completed. Of those, 
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Fiscal Year 2020 Accomplishments of Federal Student Aid 

20 refunds were not processed timely. This is less than 1 percent (0.2 percent) untimely 

refunds processed, with 99.8 percent timely.

• FSA expedited 25,538 BD refund payments totaling $8.5 million to 3,914 borrowers. This 

effort ensured the Department’s compliance with a judicial mandate to make refund 

payments within established time frames.

FSA realized the following additional accomplishments in support of Strategic Goal 4:

Strengthen Data Protection and Cybersecurity Safeguards.

• FSA’s transition to the Amazon Web Service Cloud expanded the Next Generation Data 

Center boundary to include an Amazon Web Services Cloud component. The cloud 

environment provides a more efficient, available, resilient, agile, and secure posture, 

providing the opportunity to apply stricter configuration controls reducing the 

opportunities for attackers to compromise information systems.

FSA realized the following additional accomplishments in support of Strategic Goal 5:

Enhance the Management and Transparency of the Portfolio.

• In FY 2020, FSA refined its statistically valid methodology to estimate improper 

payments for the Pell Grant and Direct Loan Programs. These refinements included 

obtaining additional sample data and using sustained questioned costs. 

• In collaboration with the IRS, FSA initiated changes to its programs to help ensure the 

accuracy of income information used for determining Pell Grant eligibility, which are now 

possible as a result of the FUTURE Act which was signed into law in December 2019. 

Implementation of the FUTURE Act will allow FSA to receive income tax data directly 

from the IRS, thereby simplifying and improving the accuracy of FAFSA filing by 

prepopulating certain fields. 

• FSA increased the transparency and responsiveness of The Freedom of Information Act

requests with customers and external stakeholders. The Freedom of Information Act

team began the fiscal year with a backlog of 173 and 432 new requests during FY 2020. 

By the close of FY 2020, the team successfully closed 569 requests, resulting in a 

reduction of 96 percent in outstanding requests.

• The Acquisitions directorate executed 1,198 contract actions totaling $2.2 billion in 

FY 2020. Their effort delivered on FSA’s vision with enhancing customer experience 

through their actions support for Aidan and Loan Simulator updates, partner portal for 

schools, and new contact centers for Next Gen FSA. In addition, the contract actions 

also provided the necessary capability for the Department’s Cybersecurity Task Force 

through the awarding of a $14 million bridge contract supporting all cybersecurity 

requirements which averted a break in service. 

o The three areas reflecting the largest fund investments included are:

1. Debt Collection via PCAs,

2. Loan Servicing through the TIVAS, and

3. NFPs and Title IV Aid Origination and Disbursement.
142 Fiscal Year 2020 Annual Report | Federal Student Aid

Legislative and Regulatory Recommendations 

Legislative and Regulatory Recommendations

One of FSA’s mission responsibilities under the law is to provide input on legislative proposals 

from Congress and from the administration and to support the Department’s regulatory activity. 

FSA also may suggest legislative or regulatory changes for consideration by the Department’s 

senior policy officials. These recommendations customarily center on improving, simplifying, 

and streamlining the Title IV federal student assistance programs for our customers, minimizing 

administrative costs, and improving program integrity. FSA’s recommendations inform the 

Department’s policymaking process, including its activities and decisions related to each year’s 

budget process. FSA provides this input and recommendations by direct contact with colleagues 

in the various policy offices within the Department, including the Office of the Under Secretary, 

the Office of Postsecondary Education, and the Office of Planning, Evaluation and Policy 

Development at both the senior policy level and at the staff level. During the past year, FSA 

provided specific recommendations to policy officials on several issues, including:

• Developing guidance and providing regulatory flexibility and relief for the purpose of 

assisting students, borrowers, institutions of higher education, and others affected by 

natural disasters, including the COVID-19 pandemic and the CARES Act;

• Assisting in the development of regulations that clarify and simplify requirements for 

distance education;

• Supporting revisions of TEACH Grant requirements to minimize the number of TEACH 

Grants that are converted to Federal Direct Unsubsidized Loans; 

• Ending the prohibition on Pell Grants for students incarcerated in Federal and State 

penal institutions;

• Developing proposals for further amendments to Section 6103 of the tax code to allow 

data sharing for more accurate and timely filing of the FAFSA, before and after the 

enactment of the FUTURE Act; and

• Developing legislative proposals regarding the simplification of the needs analysis 

formula and student loan repayment options.
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Annual Bonus Awards 

Annual Bonus Awards

As required by the 1998 amendments to the HEA, the Annual Report includes performance 

ratings and related awards for FSA senior managers and Senior Executive Service (SES) staff.

Included in this section are the number of senior managers and SES on board as of the end of 

FY 2020. However, because FY 2020 performance results were not finalized at the time this 

report was prepared, the section discusses FY 2019 performance results.

At the end of FY 2020, there were 102 FSA senior managers and 5 SES members. The number 

of senior managers in FY 2020 differed from FY 2019 due to increased hiring and internal 

promotions. The FSA Executive Committee contained 5 of the 102 senior managers. As 

members of the FSA Executive Committee, these senior managers reported directly to the 

COO. The number of FSA Executive Committee members significantly decreased because of 

the reorganization. The remaining 97 senior managers and 5 SES staff served in a variety of 

senior positions and capacities within FSA.

The following section discusses FY 2019 performance results.

For performance year 2019, the composition of ratings for the 60 senior managers who did not 

serve on the FSA Executive Committee last year were as follows: 25 senior managers achieved 

a performance rating of Exceptional Results; 14 achieved a performance rating of High Results; 

and 21 achieved a performance rating of Results Achieved.

Award amounts for those senior managers achieving an Exceptional Results rating ranged from 

$7,052 to $12,000 with a median award of $9,000. Award amounts for those achieving a High Results 

rating ranged from $3,500 to $10,000 with a median award of $7,035.

There were also 2019 performance ratings and awards for 17 senior manager members of the 

FSA Executive Committee. The composition of those rated included: six senior managers 

achieved a performance rating of Exceptional Results; seven achieved a performance rating of 

High Results; and four achieved a performance rating of Results Achieved. One of the six SES

members were on the FSA Executive Committee and achieved a performance rating of Results

Achieved. One SES member retired and was not rated. One SES member converted to an 

Administratively Determined (AD) senior manager. The composition of ratings for the remaining 

three SES members not on the FSA Executive Committee were as follows: one SES member 

achieved a performance rating of Exceptional and one achieved a performance rating of High 

Results and one achieved a performance rating of Results Achieved. 

Award amounts for the FSA Executive Committee ranged from approximately $6,000 to 

$25,000, depending on the performance rating of each individual. Only individuals with 

performance ratings of High Results Achieved or Exceptional Results achieved were eligible for 

performance-based awards.

For additional information, please refer to: Higher Education Amendments 1998/sec101D. 
144 Fiscal Year 2020 Annual Report | Federal Student Aid

Report of the Federal Student Aid Ombudsman 

Report of the Federal Student Aid Ombudsman

The FSA Ombudsman Group entered its 21st year of service to federal student aid recipients in 

FY 2020. Established by the 1998 amendments to the HEA, the Ombudsman began operations 

on September 30, 1999.

The Ombudsman Group addresses disputes regarding Title IV financial aid programs through 

informal dispute resolution processes. The Ombudsman Group uses a collaborative approach in 

working with institutions of higher education, lenders, guaranty agencies, loan servicers, and 

other participants in the student loan programs. This allows them to conduct fact-finding, review 

student loan data and records, and facilitate contacts between borrowers and their loan 

servicers to promote mutually agreeable resolution of issues brought by individual student loan 

customers.

Since July 2016, the Ombudsman Group also has had the responsibility of administering and 

managing FSA’s comprehensive informal complaint resolution process through the Feedback 

system. This process engages FSA business units and contracted vendors to receive, review, 

respond, and report on individual direct customer feedback about the programs FSA 

administers and the participants it oversees. The Feedback system was designed to augment 

established operational resources such as FSA websites, resources, contact centers, and loan 

servicers to give students and borrowers another way to clarify programmatic questions, file 

complaints, and provide feedback about federal student loan lenders, servicers, collection 

agencies, institutions of higher education, and the Department.

The Feedback and Dispute Management System (FDMS) is the single point of entry for all 

federal student financial aid recipients to provide feedback, complaints, and disputes regarding 

the programs FSA administers. While simplifying the feedback submission process for federal 

student aid recipients, the FDMS also imposed a more formal structure around FSA’s complaint 

management and resolution process. Customers providing their feedback to FSA have access 

to a robust, multi-level approach to resolution that includes the primary service/program delivery 

partner (e.g., the loan servicer, PCA, school, or others), the FSA business unit responsible for 

oversight of those entities, and as an avenue of last resort, the Ombudsman Group. And 

because all feedback is documented within one system, it unifies the record of the efforts of 

multiple parties to resolve a matter.

This report provides information about the volume and nature of all feedback FSA received, 

reviewed, and resolved during FY 2020. 

Summary of All Feedback Received in Fiscal Year 2020

All Feedback Classification and Categorization

Customers may submit feedback (cases) about any type of federal student aid. All cases are 

assigned among two lines of business: Feedback and Dispute. Cases pertaining to federally 

held loans are researched and resolved through the Feedback line of business. Federally 

owned loans include all Direct Loan, FFEL, and Perkins Loan Program loans owned by the 

Department. Cases pertaining to federally insured loans held by schools (Perkins Loans), 
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commercial lenders, or guaranty agencies are classified as Research cases and researched by 

the Ombudsman Group

This section of the report summarizes all cases received through both lines of business.

All incoming feedback is classified into a case type based on the customer’s perceptions and 

makes no judgement as to the validity of the feedback. Feedback is classified into one of five 

case types:

• General Inquiry Cases involving general federal student aid 

questions,

• Complaint A customer’s dissatisfaction with the federal 

financial aid experience, 

• Suspicious Activity A report or allegation of suspected fraud 

during the student aid process, 

• Positive Feedback Compliment about programs, FSA staff, 

Department contractors, and other Title IV 

program participants, or

• Research Disputes assigned to the Ombudsman 

Group. 

Activity in the system during FY 2020 equated to 48,638 feedback (cases) received. Those 

cases were comprised of: 

• General Inquiry 1,677

• Complaints 44,152

• [Allegations of] Suspicious Activity 2,068

• Positive Feedback 347

• Research 394
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Table 60: All Feedback Received by Case Type by Category in Fiscal Year 2020

Subcategory (All Cases Received) Volume

General Inquiry

Applying for Student Aid (FAFSA) 259

Credit Reporting 4 

Disbursing Student Financial Aid 125

Public Service Loan Forgiveness (PSLF) Program 29

Repaying Student Financial Aid 850

Repaying Student Financial Aid – In Default 173

School 72

Student Eligibility 70

Department Customer Support 95

Total General Inquiry Volume 1,677

Complaint

Applying for Student Aid (FAFSA) 7,564

Credit Reporting 1,195

Disbursing Student Financial Aid 2,004

Public Service Loan Forgiveness (PSLF) Program 1,269

Repaying Student Financial Aid 18,103

Repaying Student Financial Aid – In Default 2,072

School 7,066

Student Eligibility 1,864

Department Customer Support 3,015

Total Complaint Volume 44,152

(Allegations of) Suspicious Activity

Allegation of Identity Theft 138

Allegation of Misuse of Departmental Resources 368

Allegation of Misuse of FSA ID 141

Allegation of Misuse of FSA Intellectual Property or Claim of a Department Affiliate 1,287

Allegation of a Whistleblower 134

Total Suspicious Activity Volume 2,068

Positive Feedback

My Collection Agency 4 

My Customer Service Experience 165

My School 51

My Servicer 14

Department Website, Application, or Service 113

Total Positive Feedback Volume 347

Research

Credit Reporting 23

Public Service Loan Forgiveness (PSLF) Program 13

Repaying Student Financial Aid 292

Repaying Student Financial Aid – In Default 38

School 8 

Student Eligibility 14

Department Customer Support 6 

Total Research Volume 394

Grand Total 48,638
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In addition to categorizing by case type, all feedback submitted is further categorized into 

subcategories based on the customer’s description. Nearly 100 subcategories further refine the 

feedback submitted. The breakdown of cases received by Top 5 Category/Subcategory is 

discussed later in this report.

How FSA Resolves Feedback

Feedback resolution must be executed within the boundaries established by law and regulation. 

These are grouped under three common Resolution Types. The Resolution Type “Resolved” 

designates feedback on which FSA has concluded all review and research activity. “Referred” is 

most commonly used with the case type of General Inquiry, but also may be used to designate 

situations on other case types when FSA determines another resource external to FSA should 

assist the customer because the nature of the feedback does not pertain to Title IV federal 

student aid programs or must be reported to another agency or entity. “Submission Logged” 

relates to feedback on which no assistance is provided. The most common use for this 

Resolution Type is for feedback submitted anonymously or containing specific direction to 

change Title IV law or regulation.

Resolution Actions indicate the specific way in which the feedback was resolved. Resolution 

Actions achieved on cases resolved by FSA (not Referred) in FY 2020, most commonly 

consisted of providing to the customer additional explanation or information about the action or 

circumstance that prompted the customer to submit feedback to FSA. These are identified with 

a Resolution Action of “Communication/Process Clarified for Customer.”

Table 61: Resolution Type and Action for All Cases Closed in Fiscal Year 2020

Resolution Type Resolution Action Volume Percentage

Resolved

Action Taken 2,298 4.2% 

Communication/Process Clarified for Customer 12,228 22.2% 

Referred

Referred to Accrediting Agency 529 1.0% 

Referred to FSA Contact Center 9,585 17.4% 

Referred to FSA Website 1,437 2.6% 

Referred to Other Government Entity 1,747 3.2% 

Referred to Outside Third-Party 3,077 5.6% 

Referred to School 6,746 12.3% 

Referred within the Department of Education 9,125 16.6% 

Submission Logged

Feedback Logged 6,276 11.4% 

No Response from Customer 1,979 3.6% 

Policy Suggestion Logged 33 0.1% 

Total 55,060 100%

Table 61 highlights that 22.2 percent of all cases are resolved with another explanation and/or 

more information about the circumstances that prompted the customer to submit feedback to 

FSA. As noted above, FSA must resolve complaints within the framework of existing law and 

regulation. This means FSA often is constrained from offering a solution to the customer that 

directly and precisely resolves the matter in a way the customer most desires. For example, a 
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customer may not like the interest rate on their loans. While this is certainly valid feedback, 

legislation mandates the interest rate on federal student loans.

There are key factors explaining why so many cases are resolved with FSA providing additional 

or clarifying information:

• Customer understanding and awareness of how loan balances are affected by interest 

accrual and/or capitalization, and reduced by monthly payments. 

• Customers’ difficulty understanding requirements and proving eligibility for loan program 

benefits such as income-driven repayment plans or loan discharge, cancellation, or 

forgiveness. 

• Customers having difficulty with requirements associated with completing and submitting 

the FAFSA such as electronic signatures, completing the FAFSA, required income 

information, and the requirements for obtaining and maintaining a valid FSA ID. 

• Unclear, hard-to-understand, or inconsistent information from FSA and its service 

providers about repayment plan eligibility requirements. 

• Customers may not access their online accounts to review servicer notifications or 

provide updated contact information, leaving them unaware of the loan status. 

• Customers needing assistance with and clarification of provisions of the CARES Act and 

its impact on their federal financial aid. 

This method of recording the way individual cases are resolved helps highlight areas of 

customer confusion versus problems with program implementation that may require legislative, 

regulatory, or operational changes. It also enables FSA to show how specific categories and 

subcategories of cases are resolved and provides a more refined picture of the relative flexibility 

of FSA to meet and satisfy customer expectations as expressed within individual feedback 

submissions.
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Feedback Cases Assigned to FSA Business Units

The Top 5 categories of feedback received in this line of business are reflected in Figure 23. 

Figure 23: Top 5 Feedback Cases Received by Category/Subcategory in Fiscal Year 2020

Repaying Student Financial Aid/Loan Accuracy pertains to customer’s concerns about the 

accuracy of one or more of their loans. Examples of this subcategory include interest rate; loan 

disbursement amount; current loan balance; loan payment amount; and current loan status.

Case Example 1: Customer wanted to dispute loan disbursements due to the fact that 

she withdrew from her school within the three- day time period. She stated she was also 

told that she accepted loans, but she said she filled out a Master Promissory Note and 

completed entrance counseling, but never accepted loans.

Applying for Student Aid (FAFSA)/Completing the FAFSA pertains to any issue the 

customer experiences when applying for or receiving federal financial aid. Examples include 

unable to electronically sign FAFSA; completing the FAFSA takes too long; requirement on two 

years of tax returns; timing when the FAFSA needs to be filled out; and other challenges related 

to completion of the FAFSA.

Case Example 2: Customer is trying to complete her FAFSA utilizing her 2018 taxes.

She was not married at that time. She would like to know if she needs to add her 

husband’s tax information to the application. I asked the customer if she was completing 

the FAFSA for the 2019–20 school year. She stated she was filling out the 2020–21 

FAFSA.

Repaying Student Financial Aid/Loan Discharge, Cancellation, or Forgiveness pertains to 

any such issue except for TPD, BD, and PSLF, as those are separate categories or 

subcategories. Examples include: Teacher Loan Forgiveness, Ability to Benefit discharge, False 

Signature, and Identity Theft.
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Case Example 3: The customer obtained federal student loans and attended college 

without obtaining a high school diploma. She’s requesting to have the loans discharged 

through the Ability to Benefit provision.

Repaying Student Financial Aid/Loan Repayment Plan pertains to any issue wherein a 

customer raises concern about their monthly payment amount.

Case Example 4: “I re-applied for an IDR plan on 03/05/20, in which I received a formal 

letter in my inbox confirming that my IDR continuation was approved. I received two 

emails on 08/22/20 at 5:40 a.m. stating that my IDR plan lapsed because you required 

additional information that I did not supply, and the deadline of 90 days had passed. 

These emails are errors, and in trying to remedy this situation, I have been met with 

convoluted automated phone systems and website links in trying to find the form I 

supposedly need to fill out to remove this error. I need this IDR plan as I am currently 

unemployed and my wife and I have absolutely no means to make payments on my 

loans, certainly not the standard monthly payments.”

Repaying Student Financial Aid/Loan Delinquency or Default pertains to any issue related 

to a delinquent or defaulted loan.

Case Example 5: Customer says he has never received a bill or correspondence from 

anyone. Customer is desperate to get his loans out of default because he received no 

notice.

School-Related Feedback

The majority of feedback about schools is assigned to the FSA Partner Participation and 

Oversight office (FSA PPO) for research and resolution. Customers submitted a total of 7,138 

school-related feedback, or 14.7 percent of the total volume received.

Figure 24: Top 5 School-Related Feedback in Fiscal Year 2020
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The school-related feedback identified above is defined as:

• Administrative Capability relates to a school’s ability to administer the federal financial 

aid programs in accordance with law and regulation. Types of feedback would include 

insufficient number of financial aid staff, lack of financial aid related policies and 

procedures, or failure to follow school policies regarding financial aid awards.

• Financial Allegations (Tuition and Fee Charges) is customer feedback concerning school 

tuition, fee charges, or if a customer has a balance owed to the school. These are 

typically non-Title IV issues the customer describes in the feedback.

• Delays Receiving Aid relates to feedback when a customer expresses that a school is 

unnecessarily or improperly delaying federal aid disbursement.

• Grant Disbursement (pay out) Process (Pell Grant, TEACH Grant, and Iraq and 

Afghanistan Service Grant) is regarding the process on how a school pays out funds 

received in a federal grant to students.

• Loan Disbursement (pay out) Process is regarding the process that either the student or 

the school must complete to receive a federal loan fund.

FSA PPO staff review the feedback and as needed, contact the school and the customer for 

additional information. FSA PPO uses data from the school-related feedback to inform its 

program review and school performance monitoring responsibilities. For optimal application of 

feedback data to these activities, it is necessary to examine also how most feedback gets 

resolved. Table 62 examines the most common Resolution Type and Resolution Action for the 

Top 5 School-Related Feedback.

Table 62: Top 5 School-Related Feedback by Resolution Type/Resolution Action in Fiscal Year 2020

School-Related Feedback 

Subcategory Resolution Type Resolution Action Volume

Financial Allegations (Tuition 

and Fee Charges)

Referred Referred to School 967

Resolved Communication/Process Clarified for Customer 440

Submission Logged No Response from Customer 147

Administrative Capability

Referred Referred to School 607

Resolved Communication/Process Clarified for Customer 452

Submission Logged Feedback Logged 182

Delays Receiving Aid 

Referred Referred to School 459

Resolved Communication/Process Clarified for Customer 552

Submission Logged Feedback Logged 90

Grant Disbursement (pay out) 

Process (Pell Grant, TEACH 

Grant, and Iraq and Afghanistan 

Service Grant)

Referred Referred to School 303

Resolved Communication/Process Clarified for Customer 405

Submission Logged Feedback Logged 40

Loan Disbursement (pay out) 

Process

Referred Referred to School 264

Resolved Communication/Process Clarified for Customer 444

Submission Logged No Response from Customer 32

Total 5,384
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Loan Servicing-Related Feedback

FSA contracts with 1018 entities to manage the servicing of non-defaulted federal student loans. 

These entities are responsible for advising borrowers about resources and benefits to better 

manage their federal student loan obligations; respond to customer service inquiries; address 

billing and collecting payments19 on a loan; and perform other administrative tasks associated 

with maintaining a loan on behalf of the Department. Collection activities on defaulted loans 

assigned to the Department are overseen by FSA’s Default Resolution Group (DRG) as 

reflected on the DMCS.

Figure 25: Top 5 Loan Servicing-Related Feedback in Fiscal Year 2020

18 One of these servicers, ECSI, services Perkins loans; it does not service loans made under the Direct Loan or FFEL programs.

19 All payments on non-defaulted federal student loans the Department owns are remitted to Treasury. That agency then reports 

payment information to the various servicers, which are then credited to the borrower’s account.
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Table 63 shows the manner in which these most common cases were closed.

Table 63: Top 5 Loan Servicing-Related Feedback by Resolution Type/Resolution Action

Fiscal Year 2020

Subcategory Resolution Type Resolution Action Volume

Loan Accuracy

Referred Referred within the Department 1,663

Resolved Communication/Process Clarified for Customer 1,364

Referred Referred to Outside Third-Party 712

Loan Discharge, Cancellation, or 

Forgiveness

Referred Referred within the Department 792

Resolved Communication/Process Clarified for Customer 764

Referred Referred to FSA Contact Center 430

Loan Repayment Plan 

Referred Referred within the Department 1,111

Resolved Communication/Process Clarified for Customer 249

Referred Referred to FSA Contact Center 554

Loan Delinquency or Default

Referred Referred within the Department 1,189

Resolved Communication/Process Clarified for Customer 305

Referred Referred to Outside Third-Party 364

Loan Payment Amount

Referred Referred within the Department 1,193

Resolved Communication/Process Clarified for Customer 290

Referred Referred to Outside Third-Party 160

Total 11,140

Table 64 shows the volume of Feedback cases categorized as servicing-related, broken down 

for each servicer contracted to perform servicing activities on behalf of the Department. It should 

be noted that the volume of cases assigned to a specific servicer is often affected by the nature 

of the accounts assigned to the servicer. For example, DMCS services only defaulted loans and

FedLoan Servicing is the designated servicer for all PSLF and TEACH grants. ED-ACS is no

longer an active servicer under contract to the Department. FSA personnel resolve these cases 

in which the feedback received may be related to the former servicer’s activities.

Table 64: Feedback by Department Servicer Volume and Borrower Count

Fiscal Year 2020

Servicer Feedback 

Volume

Percent of 

Servicer 

Feedback

Number of 

Borrowers

Percent of 

Portfolio 

Debt Management and Collection System/(DMCS/DRG) 5,958 25.96% 7,731,817 18.86%

ED-ACS 23 0.10% 7,784 0.02%

ED-Cornerstone 386 1.68% 1,078,498 2.63%

ED-ECSI Perkins Loan Servicer 96 0.42% 67,439 0.16%

ED-FedLoan Servicing (PHEAA) 4,409 19.21% 7,271,445 17.74%

ED-Granite State (GSMR) 401 1.75% 1,144,059 2.79%

ED-Great Lakes 2,143 9.34% 7,446,803 18.17%

ED-HESC/EdFinancial 696 3.03% 1,762,235 4.30%

ED-MOHELA 776 3.38% 2,555,066 6.23%

ED-Navient 2,355 10.26% 5,618,684 13.70% 

ED-Nelnet 5,389 23.48% 5,532,720 13.50%

ED-OSLA 320 1.39% 777,950 1.90%

Total Volume 22,952 100% 40,994,500 100%
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Feedback Submitted by Members of the Military, Veterans, or Their 

Dependents

FSA asks all customers to indicate if they are a member of the military, a veteran, or a 

dependent of a military member or veteran. FSA collects this information to ensure continued 

support of Executive Order 13607, signed in April 2012, which established the Principles of 

Excellence (POE) for Educational Institutions Servicing Service Members, Veterans, Spouses, 

and Other Family Members.

For all feedback received in FY 2020, POE-identified customers submitted 877 feedback cases 

specifically related to their military status and/or educational benefits.

Dispute Cases Assigned to the Ombudsman Group

The Ombudsman Group researches and resolves all cases within the Dispute line of business.

Customers who dispute the outcome of a case previously responded to by an FSA business unit 

or one of FSA’s contracted servicers or PCAs may elect to have their issue reviewed by the 

Ombudsman Group. Cases pertaining to federal loans owned by commercial lenders or 

guaranty agencies—commonly referred to as commercially-held loans—are also classified as 

Research cases. Review by the Ombudsman Group is a customer’s last opportunity for informal 

resolution of an issue within the Department. 

During FY 2020, the Ombudsman Group received 394 cases for review and resolution. During 

FY 2020, the Ombudsman Group closed 598 cases.

Table 65: All Dispute Cases Received in Fiscal Year 2020

Dispute Category Volume

Credit Reporting 23

Public Service Loan Forgiveness (PSLF) Program 13

Repaying Student Financial Aid 292

Repaying Student Financial Aid – In Default 38

School 8 

Student Eligibility 14

Department Customer Support 6 

Total 394
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Figure 26: Top 3 Dispute Cases Category/Subcategory Assigned to the Ombudsman 

Group in Fiscal Year 2020

As a neutral, independent third-party separate from FSA operations, the Ombudsman Group 

fulfills a role as the third tier in FSA’s feedback resolution process. The Ombudsman Group can 

reach across technical and responsibility boundaries within the federal student aid ecosystem to 

collect facts, review circumstances, and facilitate collaboration among differing parties 

associated with a dispute to reach a resolution that may not have otherwise been considered. 

Example cases described below illustrate this activity. 

Case Example 6: Loan Accuracy: Customer contacted our office regarding her 

Chapter 7 Bankruptcy. She asserted that she had a portion of her $200,000 FFEL 

Consolidation loan discharged and only has to repay $30,000. She asserted that the 

guarantor had not corrected her loan balance. The customer asserted that they are not 

applying the 0 percent interest rate from the CARES Act and she is entitled to a 

0.25 percent reduction with automatic payments.

Outcome: Customer has one FFEL Consolidation loan. In accordance with the 

customer’s adversary order, the remaining amount owed on her FFEL Consolidation 

after the bankruptcy discharge was $30,000 with a 3.25 percent interest rate. Guarantor 

corrected records to reflect the balance the court ordered and that payments were made 

by the borrower and posted to her account. Another payment was returned to her as the 

account had been repurchased by the loan servicer. A 0.25 percent interest reduction for 

automatic payments is not offered by the lender. The customer is not eligible for the 

0 percent interest rate from the CARES Act; only Department-held loans are eligible.

Case Example 7: Loan Delinquency or Default: Customer is calling about her student 

loans from 2001 that in 2007 were consolidated. The guarantor refuses to take 

payments and sent her to collections and wage garnishment since 2019. The customer 

stated that her student loans went from $23,900.00 up to $249,344.00. She wants to 

know what she can do at this time. She stated that all the fees should be taken off the 

account. I explained that with defaulted loans, fees are added to the account. 
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Outcome: The borrower was advised that the account has been properly serviced, the 

default was valid, and collection fees are authorized. The customer has the option to pay

the loan in full, re-consolidate the FFEL Consolidation or compromise a settlement on 

the account, in addition to making voluntary monthly payments.

Case Example 8: Loan Discharge, Cancellation, or Forgiveness: I have been a 

nurse since completing school in 2013 and I am not showing a zero balance. I was in the 

understanding that every year that I submit my proof of work that my tuition was being 

forgiven.

Outcome: The research showed that the customer submitted cancellation applications 

in prior years and a portion of the loan was forgiven. However, the customer did not 

submit the cancellation request for the final year of service performed. The customer 

was advised that she needs to submit the final paperwork to receive the remaining 

30 percent of Perkins Loan Cancellation.

Table 66: All Dispute Cases Closed in Fiscal Year 2020 by Resolution Type

Category Volume

Resolved 532

Referred 30

Submission Logged 36

Total 598

Other Case Types

Suspicious Activity

FSA carefully reviews each customer submission to determine if there is a credible allegation of 

fraud or illegal activity associated with the federal financial aid programs. Table 67 identifies all 

Suspicious Activity cases by category.

Table 67: All Suspicious Activity Cases by Category in Fiscal Year 2020

Suspicious Activity Category Volume

Allegation of Identity Theft 138

Allegation of Misuse of Departmental Resources 368

Allegation of Misuse of FSA ID 141

Allegation of Misuse of FSA Intellectual Property or Claim of a Departmental Affiliation 1,287 

Allegation of Whistleblower 134

Total 2,068

Allegation of Misuse of FSA Intellectual Property or Claim of a Department Affiliation. 

This is a broad category that that many resolution types fall under. This can refer to any 

individual who falsely claims he or she is employed by or affiliated with the Department. The 

most frequent issue in this category are third-party companies that falsely claim an affiliation 

with the Department. Their purpose is to entice borrowers to purchase offered services on which 

that company does not deliver.
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Allegation of Misuse of Department Resources. This is a claim or assertion that an individual 

or individuals are not using student aid funds for tuition or other school-based items.

Allegation of Misuse of FSA ID. This is the claim or assertion that someone has fraudulently 

obtained a borrower’s FSA ID to illegally gain access to private information and/or FSA funds.

Allegation of Identity Theft. This is a claim or assertion that an individual has wrongfully 

obtained and used another persons’ personal data, in some way that involves fraud or 

deception, to gain access to FSA funds.

Allegation of a Whistleblower. This is a claim or assertion by a person who exposes any kind 

of information or activity that is deemed illegal, unethical, or not correct with regards to practices 

involving obtaining student aid, and/or any of the processes of student loan borrowing.

As with all other feedback, the way Suspicious Activity cases are resolved is tracked on cases 

closed by Resolution Type and Resolution Action.

Table 68: All Suspicious Activity by Resolution Type/Resolution Action

Fiscal Year 2020

Category Resolution Type Resolution Action Volume

Allegation of Identity Theft

Resolved Communication/Process Clarified for Customer 92

Referred Referred to Outside Third-Party 10

Resolved Action Taken 10

Submission Logged Feedback Logged 22

Allegation of Misuse of 

Department Resources

Resolved Communication/Process Clarified for Customer 71

Referred Referred to Other Government Entity 13

Submission Logged Feedback Logged 285

Allegation of Misuse of FSA ID

Resolved Communication/Process Clarified for Customer 112

Referred Referred to Other Government Entity 18

Submission Logged Feedback Logged 8 

Allegation of Misuse of FSA 

Intellectual Property or Claim of 

a Departmental Affiliation

Resolved Communication/Process Clarified for Customer 15

Referred Referred to Other Government Entity 1,255

Submission Logged Feedback Logged 33

Allegation of Whistleblower

Resolved Communication/Process Clarified for Customer 56

Referred Referred to Accreditation Agency 7 

Submission Logged Feedback Logged 176

Total 2,183

FSA shares investigation and enforcement authority over schools, loan servicers, and other 

participants in the federal student aid programs with the Department’s OIG and other agencies 

at the federal and state level. All allegations of Suspicious Activity are shared with OIG and the 

Federal Trade Commission Consumer Sentinel database. Sharing the information with the 

Sentinel data base renders individual, case-level information available to a broader network of 

federal and state law enforcement entities.

Based on increased activity of such scams, FSA has tasked the Fraud Risk Group with taking 

steps to review, track, and act upon allegations of fraudulent actions third party debt relief 

companies take. The Fraud Risk Group has also taken additional steps such as implementing a 

tactical plan, enhanced collaboration with federal enforcement agencies and offices, completed 
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borrower awareness projects, assisted with investigations, and negotiated cease and desist 

letters that are sent to third party debt relief companies.

Positive Feedback

Customers can provide positive feedback regarding their experience with FSA, schools, 

servicers, and other entities involved with the application, receipt, or repayment of federal 

student aid, including PCAs.

Case Example 9: “As a military spouse, my family’s income is ALWAYS fluctuating 

since every move means a new period of joblessness before finding work. Just before 

COVID-19 hit, I had to take off of work to support the kid during my husband’s 

deployment. COVID-19 arrived before he returned, and I was therefore unable to collect 

unemployment. While I tried to apply for a different repayment amount, I don’t think that I 

did it correctly. Luckily, one of the service members was there.

The Government Bureaucracy can seem impenetrable, and I am especially grateful to 

your representative for her kind hand-holding, despite all my questions and 

cluelessness. Thank you. Please pretend that the ‘thank you’ had an exclamation mark 

after it, but it is disallowed in this form. Still, I wanted to convey gratitude with an 

exclamation mark.”

For FY 2020, the Ombudsman Group received 347 positive feedback comments from FDMS 

customers.

Using Feedback to Improve the Federal Student Aid Programs

Feedback system data is shared in FSA’s EDWA. Data concerning the Suspicious Activity case 

type is shared with the OIG, and information about the Complaint and Suspicious Activity case 

types is shared with the Federal Trade Commission’s Consumer Sentinel data base. The 

Ombudsman Group facilitates the sharing of information from feedback that customers submit 

by responding to ad hoc requests for data about feedback received. Further, the Ombudsman 

Group shares feedback data that is, in turn, compiled with other sources of feedback (e.g., 

received through social media or at community outreach events) on a monthly basis and shared 

with representatives across FSA.

A more specific example of how FSA is using feedback data is connected to the PSLF program. 

PSLF allows government and non-profit entity employees to have their loans forgiven after 120 

qualifying payments, which is generally 10 years. 

During FY 2020, the Ombudsman Group received 1,311 cases related to PSLF. This represents 

a slight decrease from the 1,500 PSLF cases received in FY 2019. The primary reason for 

feedback about PSLF during FY 2020 related to questions about qualifying for the program from 

customers who were not on the correct repayment plan.

Congress passed legislation that created the TEPSLF to assist individuals who thought they 

were on the correct payment plan. TEPSLF is only for those customers who have made 120 

payments since 2007 and have been denied PSLF on the basis that they were not on the 

correct repayment plan. However, the legislation places a restriction on qualifying payments 
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during the final year of qualifying for PSLF. The law requires that borrower’s remit payments 

under a qualifying repayment plan for the final 12 monthly payments.

FSA implemented further improvements to the PSLF/TEPSLF process during FY 2020, 

including:

• Employer Eligibility Database: In June 2020, FSA delivered its first enhancement to 

the PSLF Help Tool by providing borrowers with information about employer eligibility in 

real time through an Employer Database. FSA added an Employer Search Feature 

where borrowers can use their employer’s Federal Employer Identification Number and 

their dates of employment to search the Employer Database for specific eligibility 

information.

• Lump Sum Payments/Prepayments: In August 2020, FSA worked with the servicer to 

make an operational improvement by updating the process to qualify a monthly 

payment, regardless of when or by whom it was made, so long as the payment due was 

made in full and no later than 15 days after the payment due date.

o Borrowers may now make prepayments or lump sum payments for up to twelve 

months or the next time their income-driven repayment plan is due for certification, 

whichever comes first.

o Additionally, FSA worked with the PSLF servicer to update borrower communications 

and account information to clearly display the distinction between “eligible” vs 

“qualifying” payments.

Case Example 10: I have been in a qualifying public service job for 18 years and have 

been making payments on my student loans the whole time. I believe I have more than 

the 120 qualifying payments given the flexibility associated with this new fund, and I 

would like to find out if, in fact, that is true. My servicer has been difficult in dealing with 

to get this information.

Outcome: The customer had a joint consolidation loan and the challenge was 

determining that portion of the loan that was eligible for PSLF. Working with the servicer, 

the Ombudsman Group was able to determine the correct balance eligible for PSLF and 

the customer received additional forgiveness of $3,908.86.

Anonymous Cases

There are many instances where customers prefer to give feedback anonymously, without 

providing any name, contact, or personal information. From the beginning days of the 

Ombudsman Group through to the present time, FSA customers had, and continue to have, the 

option to submit feedback anonymously.

While feedback is welcomed from any and all customers, it should be noted that when a 

customer files anonymously, the Ombudsman is unable to further review and resolve their 

situation because the office does not have the personally identifying information. Anonymous 

cases can range from something as minor as a comment regarding the website to something 

more serious as a report of a suspicious activity. In FY 2020, 1,453 cases were submitted 

anonymously.
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Policy Suggestion Logged

Policy Suggestion Logged refers to cases where the customer provides feedback regarding 

their opinion on improvement of specific rules and regulations. Specifically, they offer a 

particular suggestion regarding a policy that is in place they feel needs to be improved upon.

Case Example 11: Right now, the student is a dependent, and the parents’ financial 

information is considered completely, except for when it comes to household size and 

how many students are in that household. I can claim my daughter and myself on MY 

Student FASFA, but I can't claim her and myself on her FASFA when it's MY financials 

that are being reviewed. This is illogical and unfair. If you are going to look at my 

financials than please look at the household and number of students from my 

perspective. Otherwise it is an incomplete picture.

Case Example 12: My issue is students not being able to be declared independent or

having to meet strict requirements to be declared independent.

COVID-19 and FSA

As one measure of the impact of the COVID-19 pandemic on federal student aid recipients,

shortly after passage of the CARES Act, FSA began keyword searches to identify issues 

customers perceived as occurring because of the pandemic. These cases are tracked using 

keywords such as, COVID-19, virus, unemployed, out-of-work, laid off, furloughed, forbearance, 

deferment, CARES Act, closed school, and credit reporting.

Figure 27: COVID-19 Cases Received Compared to Total Complaint Volume

From March through September 2020, the Ombudsman received 25,078 complaints. Of this 

number, the Ombudsman Group received 2,156 complaints related to the pandemic, or 

8.6 percent of the total received during the period.

Third-Party Debt Relief

Businesses who offer debt relief services to loan borrowers are referred to as TPDR companies. 

A frequent complaint received via FSA’s FDMS involves third-party companies convincing 
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Report of the Federal Student Aid Ombudsman 

borrowers to use and pay for their services. Such services include submitting applications for 

forbearance, deferment, payment plan change, or loan consolidation. Assistance with such 

applications may be obtained for free from FSA’s federal loan servicers. While some companies 

do perform services as agreed, many do not. Other proposals offered by TPDR companies 

include lowering the borrower’s monthly payments and/or arranging loan forgiveness, typically 

with an impossible promise of total loan forgiveness within two to three years. These cases are 

categorized as Suspicious Activity/Allegation of Misuse of FSA Intellectual Property or Claim of 

a Department Affiliation.

To be effective in inducing borrowers to pay for their services, TPDR companies often attempt 

to convince borrowers that they are Department/FSA employees, are affiliated with, or somehow 

represent the Department. Companies make use of the Department seal, FSA logo, or the 

Department’s name in their solicitations and contracts to further persuade borrowers. They 

make these claims in advertising, during telephone conversations, in emails, and text 

messages. Believing they are working with the Department/FSA or Ombudsman agents, makes 

borrowers particularly vulnerable to TPDR scams. FDMS TPDR cases are categorized under 

Allegation of Misuse of FSA Intellectual Property or Claim of a Department Affiliation. During 

FY 2020, FDMS received 1,287 inquiries categorized as Allegation of Misuse of FSA Intellectual 

Property or Claim of a Department Affiliation.

In 2020, FSA created the Fraud Risk Division (FRD) to investigate TPDR complaints and hold 

these companies accountable for defrauding student loan borrowers. The Ombudsman Group 

has partnered with the FRD to identify FDMS cases where these companies have infringed on 

the Department’s intellectual property, misled, or deceived borrowers, and violated the 

Telemarketing Sales Rule. The Ombudsman Group Feedback Operations Team has provided 

FRD with training, TPDR contract examples, correspondence between borrowers and 

representatives, conducted case searches, and responded to other FRD inquiries.

This ongoing collaboration has enabled FRD to furnish actionable information to the 

Department’s OIG and state attorneys general in support of criminal investigations. Providing 

examples of TPDR infringement on FSA intellectual property, the Ombudsman Group worked 

with one of Department’s attorneys to explore the use of cease and desist letters. With a goal of 

putting violators on notice as a first step toward stopping fraudulent activity, a legal opinion 

paper was provided to FRD for their consideration. Once cease and desist letters begin going 

out, the Ombudsman Group will monitor FDMS complaints for continued infractions and 

promptly notify FRD.

Other Ombudsman Group Activity

Supporting the Resolution of School-Related Complaints

During FY 2020, the Ombudsman Group’s Feedback Operations division partnered with FSA 

PPO to provide additional case management and resolution support to resolve school-related 

customer complaints.

During FY 2020 Quarter 3, the Ombudsman Group’s Feedback Operations team initiated a pilot 

program in collaboration with FSA PPO. The pilot program engaged contractor resources to 

reach out to schools, customers, and other parties to obtain information and documents needed 

to resolve these cases. Contractor staff initiated, followed up on, and obtained needed 

documentation that allowed Program Compliance staff to resolve cases. At the start of the pilot, 
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Program Compliance had 1,962 cases that were open for more than 60 days. With support from 

contractor resources, Program Compliance had a total of 493 cases that were opened for more 

than 60 days. The pilot program resulted in the closure of 1,469 (75 percent) of cases that were 

open for more than 60 days.

The outcome of the pilot resulted in the permanent implementation of the process as it 

significantly improves FSA’s ability to provide more timely responses to customers seeking 

resolution of their complaints.

Customer Satisfaction Survey Results

The Ombudsman Group contracts with a third-party vendor to conduct the customer satisfaction 

survey using ACSI methodology. This survey is sent to all customers, regardless of the case 

type. Approximately two weeks after a case is closed, the vendor sends a survey to all 

Feedback system customers who provided an email address. The vendor then compiles those 

results on a quarterly basis, which are then shared with the Ombudsman Group. No information 

about survey respondents is provided to FSA.

For all surveys completed in FY 2020, the ACSI score for the FDMS was 49, which shows a 

one-point increase from FY 2019. Analysis of the numbers continues to show the FDMS’ ACSI 

scores are distributed in an inverted Bell curve, with the lowest and highest scores at the upper 

ends and fewest responses in the middle. This continues to suggest that FDMS customers 

evaluate the outcome of their inquiry and not the quality of service provided.

Student Loan Ombudsman Caucus

The Ombudsman Group hosted the annual meeting of the Student Loan Ombudsman Caucus

(Caucus) in September 2020. The Caucus, chartered by the National Council of Higher 

Education Resources, is an informal group of individuals who serve as ombudsmen, or in an 

informal dispute resolution capacity at lenders, loan servicers, and guaranty agencies. The 

Caucus meets on a bi-monthly basis via conference call, and annually in a face-to-face session. 

This year’s caucus meeting was conducted virtually.

In the past year, the Caucus has added to its membership those who have been appointed by 

state governments in an ombudsman capacity. A panel discussion led by three of those state 

officials was featured during the annual meeting in September.

Coordination with the Consumer Financial Protection Bureau

In January 2020, the Consumer Financial Protection Bureau (CFPB) Private Loan Ombudsman, 

Robert Cameron, and the FSA Ombudsman, Joyce DeMoss, signed a Memorandum of 

Understanding (MOU) in which the two agencies agree to share complaint data from complaints 

filed by student loan borrowers.

Ombudsman Group and CFPB staff collaborated to provide FSA personnel within, and external 

to, the Ombudsman Group, access to CFPB’s data system. Each week, the Ombudsman Group 

uploads to CFPB’s data system inquiries pertaining to private student loans. Conversely, the 

Ombudsman Group downloads referrals from CFPB to FSA. Referrals from CFPB are recorded 

in FDMS and the appropriate actions are taken. Since signing the MOU, FSA has directly 
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Report of the Federal Student Aid Ombudsman 

referred 46 private loan inquiries to CFPB. In turn, FSA received 45 referrals of federal student 

loan inquiries from CFPB.

In accordance with the MOU, CFPB and FSA personnel met two times to go over how each of 

the agencies intake and analyze the data collected on complaints about student loans that each 

agency receives. The signing of the MOU also cleared the way for more frequent, informal 

discussions and information-sharing between agency officials about student loan servicing 

activities of interest to both agencies.

Recommendations

The statute provides that the Ombudsman, as part of this annual report, make 

recommendations for policy changes based on feedback received from federal financial aid 

recipients. Although the majority of feedback received is resolved with additional information 

offered or clarified for the customer, the root circumstances driving customers to provide 

feedback lie in the complexity of the requirements to qualify for aid and to secure benefits during 

loan repayment, such as IDR and loan discharge. This complexity not only frustrates customers, 

but it challenges FSA service providers to provide high-quality service.

In each of the two previous annual reports, the Ombudsman recommended statutory changes to 

allow FSA to match IRS data for borrowers in IDR plans and those completing the monitoring 

period following TPD discharge of federal student loans. The Ombudsman acknowledges the 

inclusion of these recommendations in the FUTURE Act signed into law in December 2019 and 

looks forward to full implementation of this law.

Recommendation: The Ombudsman recommends reducing the number of repayment plans 

offered.

Federal loans, depending on program, loan type, and disbursement date are eligible for as 

many as eight different repayment plans. Each of these repayment plans has different eligibility 

criteria, calculations that result in different payment amounts, and different repayment terms. It 

is difficult for borrowers to understand the differences between plans and impacts of the various 

plans. Many select the lowest possible payment amount that can be offered, but do not 

understand the long-term implications of interest accrual, leaving many to express their 

frustration that monthly payments are having lower-than-expected impact on their total amount 

owed.

Recommendation: Interest capitalization should occur only when a federal student loan 

borrower consolidates outstanding federal student loans.

The law and regulations mandate or permit interest capitalization in multiple circumstances. The 

result is an increased principal balance, increased future accrued interest, and increased 

payment amounts. Interest capitalization serves no purpose, other than to generate additional 

interest income.

Capitalizing interest cannot be avoided when consolidating because the borrower is taking a 

new loan for the purpose of paying in full existing federal student loans.
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Recommendation: IDR plans should be opt-out rather than opt-in.

Student loan borrowers are required to renew their IDR plan annually. Inquiries from customers 

regularly describe challenges receiving communications about renewal or providing the 

necessary renewal documentation. When a borrower does not renew their IDR plan, the loan is 

placed in standard repayment, which is usually substantially higher than the IDR plan, and all 

outstanding interest is capitalized. These actions frequently result in delinquency and/or default 

of the loan. Moving to an opt-out strategy that includes automatic data matching with the IRS

will help borrowers to effectively manage loan repayment.

Recommendation: Borrowers who consolidated jointly with a spouse should have the 

opportunity to separate the joint consolidation loan.

In instances of PSLF (for Direct Loan borrowers), TPD, and Death Discharges the dollar portion 

of the loan attributable to the effected party is separated out and processed accordingly. This 

same principle should be applied to the separation of the Joint Consolidation in cases of 

divorce. In the case of divorce, it is often difficult for one party to get the cooperation of the other 

party to complete loan servicing actions (i.e., documentation for IDR Plan, forbearances, 

deferments) or to even make payments on the loan. The borrowers should have the option to 

separate the loan into two new Direct Consolidation Loans. An uncooperative spouse should be 

compelled by statute to agree to the new, separate consolidation loan. There are enough 

outstanding joint consolidations to warrant review of this recommendation.

Recommendation: Use of Two-factor authentication when signing into an FSA website.

Using their FSA ID number, FSA customers can access certain private information contained in 

FSA’s records. The data show customers can be easily duped into providing that information to 

third-party debt relief entities. Implementing two-factor authentication can help reduce the 

resulting difficulties addressed earlier in this report because the FSA customer would receive a 

notification when any changes are made to their FSA ID or someone attempts to access their 

private data. 
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Financial Section 

Financial Section
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Financial Section 

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Fiscal Year 2020 Annual Report | Federal Student Aid 167

Overview of the Financial Section

Overview of the Financial Section

This section provides a financial presentation of FSA’s stewardship and accountability for its 

resources. The audited financial statements are followed by the accompanying notes to the 

financial statements, required supplementary information, and the Independent Auditors’ 

Report. The subsections are listed and briefly discussed below: 

• Financial Statements: The Financial Statements consist of the following comparative 

statements: Balance Sheet, Statement of Net Cost, Statement of Changes in Net 

Position and Statement of Budgetary Resources.

• Notes to the Financial Statements: The Notes to the Financial Statements provide a 

description of significant accounting policies and detailed information on select financial 

statement line items. The Notes also include information that supports the computation 

of the various financial statement activities.

• Required Supplementary Information (Unaudited): The unaudited Required 

Supplementary Information presents the Combining Statements of Budgetary Resources 

by Program.

• Independent Auditors’ Report: The Independent Auditors’ Report presents the 

combined audit report issued by the Independent Auditors. Included in the combined 

audit report are the Report on the Financial Statements, the Report on Internal Control, 

and the Report on Compliance and Other Matters. The subsection also includes the 

Office of Inspector General Audit Transmittal Letter, Management’s Response to the 

Audit, and the Auditors’ Response to Management’s Response.
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Financial Statements

Financial Statements

FSA prepares the following statements: the Consolidated Balance Sheets, the Consolidated 

Statements of Net Cost, the Consolidated Statements of Changes in Net Position, and the 

Combining Statements of Budgetary Resources. These statements are prepared pursuant to 

the requirements of the Chief Financial Officers Act of 1990, the Government Management 

Reform Act, and OMB Circular A-136, Financial Reporting Requirements; and demonstrate 

FSA’s accountability and stewardship of the resources entrusted to it. 

Below is a brief description of the principal financial statements included in this section: 

• Consolidated Balance Sheets: The Consolidated Balance Sheets present, as 

of a specific time, the amount of resources FSA has to use or distribute (assets), 

the amounts owed by FSA (liabilities) and the difference between the two (net 

position).

• Consolidated Statements of Net Cost: The Consolidated Statements of Net 

Cost present the annual cost of agency operations. The gross cost less any 

offsetting revenue is used to determine the net cost.

• Consolidated Statements of Changes in Net Position: The Consolidated 

Statements of Changes in Net Position report the accounting activities, including 

changes to Cumulative Results of Operations and Unexpended Appropriations

that caused the change in net position during the reporting period.

• Combining Statements of Budgetary Resources: The Combining Statements 

of Budgetary Resources report the budgetary resources that were made 

available to FSA, the status of those resources at fiscal year-end, along with the 

outlays of budgetary resources. 
Bala

Fiscal Year 2020 Annual Report | Federal Student Aid 169

Financial Statements 

Consolidated Balance Sheet
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Financial Statements 

Consolidated Statements of Net Cost
Fiscal Year 2020 Annual Report | Federal Student Aid 171

Financial Statements 

Consolidated Statements of Changes in Net Position
172 Fiscal Year 2020 Annual Report | Federal Student Aid

Financial Statements 

Combined Statements of Budgetary Resources
Fiscal Year 2020 Annual Report | Federal Student Aid 173

Notes to the Financial Statements 

Notes to the Financial Statements

• Note 1: Summary of Significant Accounting Policies

• Note 2: Non-entity Assets

• Note 3: Fund Balance with Treasury

• Note 4: Other Assets

• Note 5: Credit Programs for Higher Education: Credit Program Receivables, Net and 

Liabilities for Loan Guarantees 

• Note 6: Liabilities Not Covered by Budgetary Resources

• Note 7: Debt

• Note 8: Subsidy Due to Treasury General Fund

• Note 9: Other Liabilities

• Note 10: Net Cost of Operations

• Note 11: COVID-19 Activity (See Note 5)

• Note 12: Statements of Budgetary Resources

• Note 13: Reconciliation of Net Cost to Net Outlays

• Note 14: Commitments and Contingencies
174 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Notes to the Financial Statements for the Years 

Ended, September 30, 2020 and 2019

Note 1. Summary of Significant Accounting Policies

Reporting Entity and Programs

Federal Student Aid (FSA) was created as a Performance Based Organization (PBO) within the 

U.S. Department of Education (the Department) in 1998, as a result of amendments to the 

Higher Education Act of 1965 (HEA), from previously existing Department student financial 

assistance program offices. FSA operates under the PBO mandate to develop a management 

structure driven by strong incentives to manage for results. FSA’s primary goal is to assist 

lower-income and middle-income students in overcoming the financial barriers that make it 

difficult to attend and complete postsecondary education.

FSA is a component of the U.S. Government. For this reason, some of the assets and liabilities 

reported by FSA may be eliminated for Government-wide reporting. These financial statements 

should be read with the realization that they are for a component of the U.S. Government, a 

sovereign entity.

Federal Student Loan Programs. FSA and the Department administer the William D. Ford 

Federal Direct Loan (Direct Loan) program, the Federal Family Education Loan (FFEL) 

program, the Health Education Assistance Loan program (HEAL), and the Federal Perkins Loan 

program to help students and their families finance the costs of postsecondary education. A 

direct loan is any debt instrument issued to the public by the federal government. A FFEL loan 

guarantee is a guarantee, insurance, or other pledge with respect to the payment of all or part of 

the principal or interest on any debt obligation of a non-federal borrower to a non-federal lender.

The Direct Loan program, added to the HEA in 1993 by the Student Loan Reform Act of 1993, 

authorizes FSA to make loans through participating schools to eligible undergraduate and 

graduate students and their parents. The Direct Loan program offers four types of loans: 

Stafford, Unsubsidized Stafford, Parent Loan for Undergraduate Students (PLUS), and 

Consolidation. Evidence of financial need is required for an undergraduate student to receive a 

subsidized Stafford loan. The other three loan programs are available to borrowers at all income 

levels. Loans can be used only to meet qualified educational expenses.

The FFEL program, authorized by the HEA, operates through state and private nonprofit 

guaranty agencies that provide loan guarantees on loans made by private lenders to eligible 

students. The SAFRA Act, which was included in the Health Care and Education Reconciliation 

Act of 2010 (HCERA), stated that no new FFEL loans would be made effective July 1, 2010. 

FFEL program receivables include defaulted FFEL loans and acquired FFEL loans. Acquired 

FFEL loans include student loan assets acquired using temporary authority provided in the 

Ensuring Continued Access to Student Loans Act of 2008 (ECASLA). ECASLA gave FSA

temporary authority to purchase FFEL loans and participation interests in those loans. FSA

implemented three activities under this authority: loan purchase commitments; purchases of 

loan participation interests; and a put, or forward purchase commitment, with an Asset-Backed 

Commercial Paper (ABCP) Conduit. This authority expired after September 30, 2010; as a 
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Notes to the Financial Statements 

result, loan purchase commitments and purchases of loan participation interests concluded.

However, under the terms of the Put Agreement with the conduit, ABCP Conduit activity ceased 

operations in January 2014. (See Notes 5 and 10)

Grant Programs. FSA and the Department manage numerous grant programs, which provide 

financial aid, that in most cases does not need to be repaid, to students with financial need. The 

largest of these programs is the Federal Pell Grant (Pell Grant) program, which provides needbased grants to low-income undergraduate and certain post baccalaureate students that 

promotes access to postsecondary education. Other grant programs include Federal WorkStudy Program, Federal Supplemental Educational Opportunity Grants (FSEOG), Teacher 

Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and 

Afghanistan Service Grants. (See Note 10)

COVID-19. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act

providing support for student loan borrowers primarily by suspending nearly all federal loan 

payments until September 30, interest free. FSA also extended certain provisions of the student 

loan deferrals not covered by the CARES Act to defaulted guaranteed loans held by FSA. The 

Administration subsequently issued a Presidential Memorandum which extended the student

loan deferrals for an additional three months through December 31, 2020. FSA also stopped all 

federal wage garnishments and collection actions for borrowers with federally held loans in 

default. Funding for the student debt provisions of the CARES Act and the Presidential 

Memorandum are provided through indefinite appropriations. (See Notes 5 and 11).

Other regulatory flexibilities and incentives provided in the CARES Act to help students through 

COVID-19 include:

• Federal Supplemental Educational Opportunity Grants to provide emergency aid to 

students.

• Work-study payments, which will continue even if students can no longer work on-site.

• Pell Grants, financial aid, and loans originated for this term, which students who have 

had to leave college campuses will not have to pay back. Moreover, none of this aid will 

count against students’ financial aid lifetime limits.

• Waiving Satisfactory Academic Progress requirements will help to ensure that students 

do not lose academic standing and the ability to receive federal financial student aid.

• Tax credits that incentivize employers to help pay for student loans.

Basis of Accounting and Presentation

These financial statements were prepared to report the financial position, net cost of operations, 

changes in net position, and budgetary resources of FSA as required by the Chief Financial 

Officers Act of 1990 and the Government Management Reform Act of 1994. The financial 

statements were prepared from the books and records of the Department and FSA, in 

accordance with Generally Accepted Accounting Principles (GAAP) accepted in the U.S. for 

federal entities, issued by the Federal Accounting Standards Advisory Board (FASAB), and the 

Office of Management and Budget (OMB) Circular No. A-136, Financial Reporting 
176 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Requirements, as revised. These financial statements are different from the financial reports 

prepared by the Department pursuant to OMB directives that are used to monitor and control 

FSA’s use of budgetary resources.

The accounting structure of federal agencies is designed to reflect both accrual and budgetary 

accounting transactions. Under the accrual method of accounting, revenues are recognized 

when earned and expenses are recognized when a liability is incurred, without regard to receipt 

or payment of cash. Budgetary accounting facilitates compliance with legal constraints and 

controls over the use of federal funds.

Transactions and balances among FSA funds have been eliminated from the consolidated 

financial statements.

Accounting standards require all reporting entities to disclose that accounting standard practices 

allow certain presentations and disclosures to be modified, if needed, to prevent the disclosure 

of classified information.

Accounting for Federal Credit Programs

FSA’s accounting for its loan and loan guarantees is based on the requirements of the Federal 

Credit Reform Act of 1990 (FCRA). The purpose of the FCRA is to record the lifetime subsidy 

cost of direct loans and loan guarantees, in present value terms, at the time the loan is 

disbursed (subsidy). Components of subsidy costs for loans and guarantees include defaults 

(net of recoveries); contractual payments to third-party private loan collectors who receive a set 

percentage of amounts collected; and, as an offset, origination and other fees collected. For 

direct loans, the difference between interest rates incurred by FSA on its borrowings from the 

Department of Treasury (Treasury) and interest rates charged to particular borrowers is also 

subsidized (or may provide an offset to subsidy if FSA’s rate is less).

Under the FCRA, subsidy cost is estimated using the net present value of future cash flows to 

and from FSA. In accordance with the FCRA, credit programs either estimate a subsidy cost to 

the government (a “positive” subsidy), breakeven (zero subsidy cost), or estimate a negative 

subsidy cost. Negative subsidy occurs when the estimated cost of providing loans to borrowers 

from Treasury borrowing, collection costs and loan forgiveness is less than the value of 

collections from borrowers for interest and fees, in present value terms.

Subsidy cost is an estimate of the present value cost of providing direct loans, but excludes the 

administrative costs of issuing and servicing the loans. FSA estimates subsidy expense using a 

set of econometric and financial models, as well as cash flow models.

FSA estimates subsidy costs annually for new loans disbursed in the current year; updates to 

the previous cost estimates for outstanding loans disbursed in prior years (subsidy 

re-estimates); and updates to previous cost estimates based on new legislation or other 

government actions that change the terms of existing loans (loan modifications) which alter the 

estimated subsidy cost and the present value of outstanding loans. Loan modifications can also 

include modification adjustment gains and losses to account for the difference between the 

discount rate used to calculate the cost of the modification and the interest rate at which the 

cohort pays or earns interest.
Fiscal Year 2020 Annual Report | Federal Student Aid 177

Notes to the Financial Statements 

The subsidy cost of direct loan and loan guarantee programs are budgeted and tracked by the 

fiscal year in which the loan award is made or the funds committed. Such a grouping of loans or 

guarantees is referred to as a “cohort.” A cohort is a grouping of direct loans obligated or loan 

guarantees committed by a program in the same year even if disbursements occur in 

subsequent years.

In order to account for the change in the net present value of the loan portfolio over time, the 

subsidy cost is “amortized” each year. Amortization accounts for the differences in interest 

rates, accruals, and cash flows over the life of a cohort, ensuring that cost is reflected in subsidy 

estimates and re-estimates. Amortization of subsidy is calculated as the difference between 

interest received from borrowers and Treasury (on uninvested funds) and interest paid to 

Treasury on borrowings.

The FCRA establishes the use of financing, program, and Treasury General Fund receipt 

accounts for loan guarantees committed and direct loans obligated after September 30, 1991.

• Financing accounts borrow funds from Treasury, make direct loan disbursements, collect 

fees from lenders and borrowers, pay claims on guaranteed loans, collect principal and 

interest from borrowers, earn interest from Treasury on any uninvested funds, and 

transfer excess subsidy to Treasury General Fund receipt accounts. Financing accounts 

are presented separately in the combined statements of budgetary resources (SBR) as 

non-budgetary credit reform accounts to allow for a clear distinction from all other 

budgetary accounts. This facilitates reconciliation of the SBR to the Budget of the United 

States Government. 

• Program accounts receive and obligate appropriations to cover the positive subsidy cost 

of a direct loan or loan guarantee when the loan is approved and disburses the subsidy 

cost to the financing account when the loan is issued. Program accounts also receive 

appropriations for administrative expenses.

• Treasury General Fund receipt accounts receive amounts paid from financing accounts

when there are negative subsidies for new loan disbursements or downward 

re-estimates of the subsidy cost of existing loans. (See Notes 12 and 13)

FSA records an obligation each year for direct loan awards to be made in a fiscal year based on 

estimates of schools’ receipt of aid applications. FSA advances funds to schools based on these 

estimates. Promissory notes are signed when schools reach individual agreements with 

borrowers and the schools subsequently report each disbursement of advanced funds to FSA. A 

new promissory note is usually not required for students in the second or later year of study. 

Half of all loan awards are issued in the fourth quarter of the fiscal year. Loans awarded are 

typically disbursed in multiple installments over an academic period. As a result, loans may be 

disbursed over multiple fiscal years. Loan awards may not be fully disbursed due to students 

leaving or transferring to other schools. FSA’s obligation estimate may also not reflect the actual 

amount of awards made. Based on historical averages, FSA expects approximately 8.2 percent 

of the amount obligated for new loan awards will not be disbursed.

When a loan is placed in deferment or forbearance, loan repayment is temporarily suspended 

with the length of postponement different for each borrower. Interest accrues while a loan is in 

deferment or forbearance. Loans are cancelled if a person dies, meets disability requirements, 
178 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

or occasionally through the bankruptcy courts. Loans are also cancelled through the Public 

Service Loan Forgiveness (PSLF) Program, which forgives the remaining balance on a Direct 

Loan after 120 qualifying monthly payments are made. These payments must be made under a 

qualifying repayment plan while working full-time for a qualifying employer. In addition, FSA

offers the Pay As You Earn (PAYE) program. This student loan repayment program is designed 

to help borrowers who struggle to make their normal student loan payments. The plan allows 

payments to be limited to 10 percent of discretionary income if qualifications are met. Under the 

PAYE program, if all requirements are met, forgiveness of the remaining balance of a student

loan is possible after 20 years of consistent payments.

Budgetary Resources

Budgetary resources are amounts available to enter into new obligations and to liquidate them. 

FSA’s budgetary resources include unobligated balances of resources from prior years and new 

resources, which include appropriations, authority to borrow from Treasury, and spending 

authority from collections.

Borrowing authority is an indefinite budgetary resource authorized under the FCRA. This 

resource, when realized, finances the unsubsidized portion of the Direct Loan, FFEL, and other 

loan programs. In addition, borrowing authority is requested to cover the cost of the initial loan 

disbursement as well as any related negative subsidy to be transferred to Treasury General 

Fund receipt accounts. Treasury prescribes the terms and conditions of borrowing authority and 

lends to the financing account amounts as appropriate. Amounts borrowed, but not yet 

disbursed, are included in uninvested funds and earn interest. Treasury uses the same 

weighted average interest rates for both the interest charged on borrowed funds and the interest 

earned on uninvested funds. Treasury sets a different fixed interest rate to be used for each 

loan cohort once the loans are substantially disbursed. FSA may carry forward borrowing 

authority to future fiscal years provided that cohorts are disbursing loans. All borrowings from 

Treasury are effective on October 1st of the current fiscal year, regardless of when FSA

borrowed the funds, except for amounts borrowed to make annual interest payments.

Authority to borrow from Treasury provides most of the funding for disbursements made under 

the Direct Loan program, FFEL, and other loan programs. Subsidy and administrative costs of 

the programs are funded by appropriations. Borrowings are repaid using collections from 

borrowers, fees, and interest on uninvested funds.

Unobligated balances represent the cumulative amount of budgetary resources that are not 

obligated and that remain available for obligation under law, unless otherwise restricted. 

Resources expiring at the end of the fiscal year remain available for five years, but only for 

upward adjustments of prior year obligations, after which they are cancelled and may not be 

used. Resources that have not expired at year-end are available for new obligations, as well as 

upward adjustments of prior-year obligations. Funds are appropriated on an annual, multi-year, 

or no-year basis. Appropriated funds expire on the last day of availability and are no longer 

available for new obligations. Amounts in expired funds are unavailable for new obligations, but 

may be used to adjust previously established obligations.

Permanent Indefinite Budget Authority. The Direct Loan, FFEL, and other loan programs 

have permanent indefinite budget authority through legislation. Parts B, Federal Family 

Education Loan Program, and D, Federal Direct Student Loan, of the HEA pertain to the 

existence, purpose, and availability of permanent indefinite budget authority for these programs.
Fiscal Year 2020 Annual Report | Federal Student Aid 179

Notes to the Financial Statements 

Reauthorization of Legislation. Funds for most FSA programs are authorized, by statute, to 

be appropriated for a specified number of years, with an automatic one-year extension available 

under Section 422 of the General Education Provisions Act. Congress may continue to 

appropriate funds after the expiration of the statutory authorization period, effectively 

reauthorizing the program through the appropriations process. The current Budget of the United 

States Government presumes all programs continue per congressional budgeting rules. (See 

Note 12)

Entity and Non-Entity Assets

Assets are classified as either entity or non-entity assets. Entity assets are those that FSA has 

authority to use for its operations. Non-entity assets are those held by FSA but not available for 

use in its operations. FSA non-entity assets are offset by liabilities to third parties and have no 

impact on net position. FSA combines its entity and non-entity assets on the balance sheets and 

discloses its non-entity assets in the notes. (See Note 2)

Fund Balance with Treasury

The Fund Balance with Treasury includes amounts available to pay current liabilities and 

finance authorized purchases, as well as funds restricted until future appropriations are 

received. Treasury processes cash receipts and cash disbursements for FSA. FSA’s records 

are reconciled with Treasury’s records. (See Note 3)

Accounts Receivable

Accounts receivable are amounts due to FSA from the public and other federal agencies. 

Receivables from the public result from overpayments to recipients of grants and other financial 

assistance programs, and disputed costs resulting from audits of educational assistance 

programs. Amounts due from federal agencies result from reimbursable agreements entered 

into by FSA with other agencies to provide various goods and services. Accounts receivable are 

reduced to net realizable value by an allowance for uncollectible amounts. The estimate of an

allowance for loss on uncollectible accounts is based on FSA’s experience in the collection of 

receivables and an analysis of the outstanding balances. (See Note 4)

Guaranty Agencies’ Federal Funds

Guaranty Agencies’ Federal Funds are primarily comprised of the federal government’s interest 

in the program assets held by state and nonprofit FFEL program guaranty agencies. Section 

422A of the HEA required FFEL guaranty agencies to establish federal student loan reserve

funds (federal funds). Federal funds include initial federal start-up funds, receipts of federal 

reinsurance payments, insurance premiums, guaranty agency share of collections on defaulted 

loans, investment income, administrative cost allowances, and other assets.

The balance in the Federal Fund represents consolidated reserve balances of the 23 guaranty 

agencies based on the Guaranty Agency financial reports that each agency submits annually to 

FSA. Although FSA and the guaranty agencies operate on different fiscal years, all guaranty 

agencies are subject to an annual audit. A year-end valuation adjustment is made to adjust 

FSA’s balances in order to comply with federal accounting principles and disclose funds held 

outside of Treasury.
180 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Guaranty Agencies’ Federal Funds are classified as non-entity assets with the public and are 

offset by a corresponding liability due to Treasury. The federal funds are held by the guaranty 

agencies but can only be used for certain specified purposes listed in FSA’s regulations. The 

federal funds are the property of the U.S. and are reflected in the Budget of the United States 

Government. Payments made to the FSA from guaranty agencies’ federal funds through a 

statutory recall or agency closures represent capital transfers and are returned to Treasury’s 

General Fund. (See Notes 2, 4, and 9) 

Credit Program Receivables, Net and Liabilities for Loan Guarantees

The financial statements reflect FSA’s estimate of the long-term subsidy cost of direct and 

guaranteed loans in accordance with the FCRA. Loans and interest receivable are valued at 

their gross amounts less an allowance for the present value of amounts not expected to be 

recovered and thus having to be subsidized—called an “allowance for subsidy.” The difference 

between the gross amount and the allowance for subsidy is the present value of the cash flows 

to, and from, FSA that are expected from receivables over their projected lives. Similarly,

liabilities for loan guarantees are valued at the present value of the cash outflows from FSA less 

the present value of related inflows. The estimated present value of net long-term cash outflows 

of FSA for subsidized costs is net of recoveries, interest supplements, and offsetting fees.

The liability for loan guarantees presents the net present value of all future cash flows from 

currently insured FFEL loans, including claim payments, interest assistance, allowance 

payments, and recoveries from assigned loans. Guaranteed loans that default are initially turned 

over to guaranty agencies for collection. Defaulted FFEL loans are accounted for as assets and 

reported at their net present value, similar to direct loans, although they are legally not direct 

student loans. Credit program receivables, net includes defaulted FFEL loans owned by FSA

and held by FSA or guaranty agencies. In most cases, after approximately four years, defaulted 

guaranteed loans not in repayment are turned over by the guaranty agencies to FSA for 

collection.

FFEL program receivables include purchased loans and other interests acquired under an 

expired program. The cash flows related to these receivables include collections on purchased 

loans and other activities, including transfers of re-estimated subsidy. The cash flows of these 

authorities also include inflows and outflows associated with the underlying or purchased loans 

and other related activities, including any positive or negative subsidy transfers.

Capitalization of interest occurs as a result of various initiatives such as loan consolidations. As 

a result, interest receivable is reduced and loan principal is increased. (See Note 5)

Property and Equipment, Net and Leases

FSA has very limited acquisition costs associated with buildings, furniture, and equipment as all 

federal and contractor staff are housed in leased buildings. The Department and FSA also lease 

information technology and telecommunications equipment, as part of a contractor-owned, 

contractor-operated services contract. Lease payments associated with this equipment have 

been determined to be operating leases and, as such, are expensed as incurred. The 

noncancellable lease term is one year, with the Department holding the right to extend the lease 

term by exercising additional one-year options. (See Note 4) 
Fiscal Year 2020 Annual Report | Federal Student Aid 181

Notes to the Financial Statements 

Liabilities

Liabilities represent actual and estimated amounts to be paid as a result of transactions or 

events that have already occurred.

• Liabilities are classified as covered by budgetary resources if budgetary resources are

available to pay them. Credit program liabilities funded by permanent indefinite

appropriations are also considered covered by budgetary resources.

• Liabilities are classified as not covered by budgetary resources when congressional

action is needed before they can be paid. Although future appropriations to fund these

liabilities are likely, it is not certain that appropriations will be enacted to fund these

liabilities.

• Liabilities not requiring appropriated budgetary resources include those related to

deposit funds, Subsidy Due to Treasury General Fund for Future Liquidating Account

Collections (pre-1992 loan guarantee programs), and Federal Perkins Loan Program

balances due to be repaid to the Treasury General Fund (See Note 6).

Debt

FSA borrows from Treasury to provide funding for the Direct Loan, FFEL, and other credit 

programs for higher education. The liability to Treasury from borrowings represents unpaid 

principal at year-end. FSA repays the principal based on available fund balances. Interest rates 

are based on the corresponding rate for 10-year Treasury securities and are set for those 

borrowings supporting each cohort of loans once the loans for that cohort are substantially 

disbursed. Interest is paid to Treasury on September 30th. (See Note 7)

Subsidy Due to Treasury General Fund

FSA must transfer to the Treasury General Fund all excess funding resulting from downward reestimates of credit program loans that are subject to FCRA requirements. This excess funding is 

included in the liability for subsidy due to Treasury and will be transferred to Treasury in the 

succeeding fiscal year upon receipt of authority from OMB. Subsidy due to Treasury also 

includes future liquidating account collections (estimated collections in excess of estimated 

outlays) for FSA’s pre-1992 FFEL and HEAL loans that, when collected, will also be transferred 

to the Treasury General Fund. (See Note 8)

Accounts Payable

Accounts payable include amounts owed by FSA for goods and services received from other 

entities and scheduled payments transmitted but not yet processed. Accounts payable to the 

public primarily consists of in-process grant and loan disbursements, including an accrued 

liability for schools that have disbursed loans prior to requesting funds. (See Note 9)
182 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Accrued Grant Liability

Some grant recipients incur allowable expenditures as of the end of an accounting period but 

have not been reimbursed by FSA. FSA accrues a liability for these allowable expenditures. The 

amount is estimated using statistical sampling of unliquidated balances. (See Note 9)

Personnel Compensation and Other Employee Benefits

Annual, Sick, and Other Leave. The liability for annual leave, compensatory time off, and other 

vested leave is accrued when earned and reduced when taken. Each year, the accrued annual 

leave account balance is adjusted to reflect current pay rates. Sick leave and other types of 

nonvested leave are expensed as taken. Annual leave earned but not taken, within established 

limits, is funded from future financing sources.

Retirement Plans and Other Retirement Benefits. Employees participate in either the Civil 

Service Retirement System (CSRS), a defined benefit plan, or the Federal Employees 

Retirement System (FERS), a defined benefit and contribution plan. For CSRS employees, FSA

contributes a fixed percentage of pay.

FERS consists of Social Security, a basic annuity plan, and the Thrift Savings Plan. FSA and 

the employee contribute to Social Security and the basic annuity plan at rates prescribed by law. 

In addition, FSA is required to contribute to the Thrift Savings Plan a minimum of 1 percent per 

year of the basic pay of employees covered by this system, match voluntary employee 

contributions up to 3 percent of the employee’s basic pay, and match one-half of contributions 

between 3 percent and 5 percent of the employee’s basic pay. For FERS employees, FSA also 

contributes the employer’s share of Medicare.

Contributions for CSRS, FERS, and other retirement benefits are insufficient to fund the 

programs fully and are subsidized by the Office of Personnel Management (OPM). The 

Department imputes its share of the OPM subsidy, using cost factors provided by OPM, and 

reports the full cost of the programs related to its employees in FSA’s Statements of Net Cost.

These OPM imputed costs are offset by imputed financing sources from costs absorbed by 

others in FSA’s Statements of Changes in Net Position.

Federal Employees’ Compensation Act. The Federal Employees’ Compensation Act (FECA) 

(Pub. L. 103-3) provides income and medical cost protection to covered federal civilian 

employees injured on the job, to employees who have incurred work-related occupational 

diseases, and to beneficiaries of employees whose deaths are attributable to job-related injuries 

or occupational diseases. The FECA program is administered by the U.S. Department of Labor 

(DOL), which pays valid claims and subsequently seeks reimbursement from FSA for these paid 

claims.

The FECA liability consists of two elements. The first element, accrued FECA liability, is based 

on claims paid by DOL but not yet reimbursed by FSA. FSA reimburses DOL for claims as funds 

are appropriated for this purpose. In general, there is a two- to three-year period between 

payment by DOL and reimbursement to DOL by FSA. As a result, FSA recognizes an 

intragovernmental liability, not covered by budgetary resources, for the claims paid by DOL that 

will be reimbursed by FSA. 
Fiscal Year 2020 Annual Report | Federal Student Aid 183

Notes to the Financial Statements 

The second element, actuarial FECA liability, is the estimated liability for future benefit 

payments and is recorded as a liability with the public, not covered by budgetary resources. The 

actuarial FECA liability includes the expected liability for death, disability, medical, and 

miscellaneous costs for approved compensation cases. DOL determines the actuarial FECA 

liability annually, as of September 30th, using an actuarial method that considers historical 

benefit payment patterns, wage inflation factors, medical inflation factors, and other variables. 

The projected annual benefit payments are discounted to present value. (See Notes 6 and 9)

Imputed Costs

Services are received from other federal entities at no cost or at a cost less than the full cost to 

FSA. Consistent with accounting standards, certain costs of the providing entity that are not fully 

reimbursed by FSA are recognized as imputed cost in the Statements of Net Cost and are offset 

by imputed revenue in the Statements of Changes in Net Position. Such imputed costs and 

revenues relate to employee benefits. However, unreimbursed costs of services other than 

those related to employee benefits are not included in FSA’s financial statements.

Net Cost of Operations

Net cost consists of gross costs and earned revenue. Major components of FSA’s net costs 

include credit program subsidy expense, credit program interest revenue and expense, and 

grant expenses. Administrative overhead costs are allocated to loan and non-credit programs 

based on number of applications processed, number of loans serviced, dollar amount of loan 

originations, cost of school compliance actions, and the cost to collect defaulted loans. (See 

Note 10)

Credit Program Subsidy Expense. Subsidy expense is an estimate of the present 

value cost of providing loans, excluding the administrative costs of issuing and servicing 

the loans. In order to estimate subsidy expense, FSA must project lifetime cash flows 

associated with loans disbursed in a specific fiscal year (i.e., the loan cohort). FSA 

projects these lifetime cash flows using a set of econometric and financial models, as 

well as cash flow models. FSA estimates subsidy expenses annually for new loans 

disbursed in the current year; updates the previous cost estimates for outstanding loans 

disbursed in prior years (subsidy re-estimates); and updates previous cost estimates 

based on changes to terms of existing loans (loan modifications). Loan modifications 

include actions resulting from new legislation or from the exercise of administrative 

discretion under existing law, which directly or indirectly alters the estimated subsidy 

cost of outstanding direct loans (or direct loan obligations). (See Notes 5 and 10)

Credit Program Interest Revenue and Expense. FSA recognizes interest revenue 

from the public when interest is accrued on Direct Loan program loans, defaulted and 

acquired FFEL loans, and outstanding principal for other loan programs. Interest due 

from borrowers is accrued at least monthly and is satisfied upon collection or 

capitalization into the loan principal. Federal interest revenue is recognized on the 

unused fund balances with Treasury in the financing accounts.

Federal interest expense is recognized monthly on the outstanding borrowing from 

Treasury (debt) used to finance direct loan and loan guarantee programs. Accrued 

interest to Treasury is paid on September 30th. The interest rate for federal interest 

expense is the same as the rate used for federal interest revenue.
184 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Interest expense equals interest revenue plus administrative fees accrued for all credit 

programs due to subsidy amortization. Subsidy amortization is required by the FCRA 

and accounts for the difference between interest expense and revenue cash flows. For 

direct loans, the allowance for subsidy is adjusted with the offset to interest revenue. For

guaranteed loans, the liability for loan guarantees is adjusted with the offset to interest 

expense. (See Note 10) 

Net Position

Net position consists of unexpended appropriations and cumulative results of operations. 

Unexpended appropriations include undelivered orders and unobligated balances, except for 

federal credit financing and liquidating funds and trust funds. Cumulative results of operations 

represent the net difference since inception between (1) expenses and (2) revenues and 

financing sources.

Taxes

FSA is a Federal entity and is not subject to Federal, state, or local taxes. Therefore, no 

provision for income taxes is recorded.

Use of Estimates

FSA and Department management are required to make certain estimates while preparing 

consolidated financial statements in conformity with GAAP. These estimates are reflected in the 

assets, liabilities, net cost, and net position of the financial statements and may differ from 

actual results. FSA’s estimates are based on management’s best knowledge of current events, 

historical experiences, and other assumptions that are believed to be reasonable under the 

circumstances. Significant estimates reported on the financial statements include: allocation of 

administrative overhead costs; allowance for subsidy and subsidy expense for direct, defaulted 

guaranteed and acquired loans; the liability for loan guarantees; and grant liability and advance 

accruals. (See Notes 4, 5, 9, and 10) 

FSA’s estimates for credit reform programs are calculated using a series of assumption models 

that are updated using a statistically valid sample of National Student Loan Data System 

(NSLDS®) data, data from the Debt Management and Collection System (DMCS), and economic 

assumptions provided by the Office of Management and Budget. Actual results may differ from 

those assumptions and estimates. Differences between actual results and these estimates may 

occur in the valuation of credit program receivables and liabilities for loan guarantees under 

guidelines in the FCRA. FSA recognizes the sensitivity of credit reform modeling. Slight 

changes in modeling methodology or data used to derive assumptions can produce largely 

varied results. FSA therefore continually reviews its model factors and statistical modeling 

techniques to reflect the most accurate credit program costs possible in its annual financial 

statements. FSA updates its assumption models in accordance with its model update plan, 

which takes into consideration statutory or new program requirements, major changes to the 

model structure or methodology, and data updates. This level of granularity in the modeling 

methodology is essential to the financial reporting and budgeting processes so that FSA can 

forecast the costs of various program options when making policy decisions. (See Note 5)
Fiscal Year 2020 Annual Report | Federal Student Aid 185

Notes to the Financial Statements 

Reclassifications

The following reclassifications were made to the prior year financial statements and notes to 

conform to the current year presentation. These changes had no effect on total assets, liabilities 

and net position, net cost of operations, or budgetary resources.

• The FY 2019 Outlays, Net line of Combined Statements of Budgetary Resources was 

reclassified to present net disbursements associated with credit financing accounts on a 

separate Disbursements, Net line to conform to FY 2020 changes in OMB Circular 

A-136.

• Note 13, Reconciliation of Net Cost to Net Outlays, was reclassified to exclude the credit 

financing account net disbursement amount that was reclassified on the Combined 

Statements of Budgetary Resources to conform to FY 2020 changes in OMB Circular 

A-136.

Note 2. Non-Entity Assets

Non-Entity Assets

(Dollars in Millions)

FSA’s FY 2020 assets are predominantly entity assets (99.8 percent), leaving the small portion 

of assets remaining as non-entity assets. Non-entity assets with the public primarily consist of 

guaranty agency reserves (75.4 percent), reported as Guaranty Agencies’ Federal Funds, and 

Federal Perkins Loan program loan receivables (24.6 percent), reported as credit program 

receivables, net. The corresponding liabilities for these non-entity assets are reflected in various 

accounts, including intragovernmental accounts payable, Guaranty Agencies’ Federal Funds

due to Treasury, and other liabilities (See Note 9).
186 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Note 3. Fund Balance with Treasury

Fund Balance

(Dollars in Millions)

 

Available unobligated balances represent amounts that are apportioned for obligation in the 

current fiscal year. Unavailable unobligated balances represent amounts that are not 

apportioned for obligation during the current fiscal year and expired appropriations no longer 

available to incur new obligations. Total unavailable unobligated balance ($23.6 billion) differs 

from unapportioned and expired amounts on the SBR ($25.5 billion) due to the Guaranty 

Agencies’ Federal Funds ($1.9 billion).

In both FY 2020 and FY 2019, $25 million of unused funds from canceled appropriations were 

returned to Treasury. Such balances are excluded from the amount reported as Fund Balance 

with Treasury in accordance with Treasury guidelines (See Note 12).

Note 4. Other Assets

Other Assets

(Dollars in Millions)

Changes in property and equipment balances for the current year were as follows. 

Property and Equipment

(Dollars in Millions)
Fiscal Year 2020 Annual Report | Federal Student Aid 187

Notes to the Financial Statements 

Note 5. Credit Programs for Higher Education: Credit Program 

Receivables, Net and Liabilities for Loan Guarantees

Credit Program Receivables, Net

(Dollars in Millions)

The federal student loan programs provide students and their families with the funds to help 

meet postsecondary education costs. Funding for these programs is provided through 

permanent indefinite budget authority. The emergency relief measures provided by Congress 

and the Administration in response to the coronavirus pandemic were recorded as loan 

modifications and are described in each of the programs below. Per OMB guidance, loan 

modifications were calculated using the FY 2020 President’s Budget formulation discount rates. 

The net loans receivable or the value of assets related to direct loans is not the same as 

expected proceeds from selling the loans.

What follows is additional analysis of the activity, costs, and adjustments for each of the loan 

programs.

Direct Loan Program. The federal government makes loans directly to students and parents 

through participating institutions of higher education under the Direct Loan program. Direct 

Loans are originated and serviced through contracts with private vendors.

Direct Loan program loan receivables include defaulted and nondefaulted loans owned and held 

by FSA. Of the $1,317.0 billion in gross loan receivables, as of September 30, 2020, $100.3

billion (7.6 percent) in loan principal was in default and had been transferred to FSA’s defaulted 

loan servicer, compared to $99.7 billion (8.0 percent) as of September 30, 2019. 

Direct Loan Program Loan Disbursements by Loan Type

(Dollars in Millions)
188 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

The allocation of disbursements for the first three loan types is estimated based on historical 

trend information.

Student and parent borrowers may prepay existing loans without penalty through a new 

consolidation loan. Under the FCRA and requirements provided by OMB regulations, the 

retirement of direct loans being consolidated is considered a collection of principal and interest. 

This receipt is offset by the disbursement related to the newly created consolidation loan. 

Underlying direct or guaranteed loans, performing or nonperforming, are paid off in their original 

cohort; new consolidation loans are originated in the cohort in which the new consolidation loan 

was obligated. Consolidation activity is taken into consideration in establishing subsidy rates for 

defaults and other cash flows. The cost of new consolidations is included in subsidy expense for 

the current-year cohort; the effect of prepayments on existing loans could contribute to reestimates of prior cohort subsidy costs. The net receivables include estimates of future 

prepayments of existing loans through consolidations; they do not reflect subsidy costs 

associated with anticipated future consolidation loans.

Direct loan consolidations were $30.4 billion during FY 2020 and $39.8 billion during FY 2019. 

The effect of the early payoff of the existing loans—those being consolidated—is recognized in 

the future projected cash flows associated with that cohort.

Direct Loan Program Interest Expense and Revenues (See Note 10)

(Dollars in Millions)
Fiscal Year 2020 Annual Report | Federal Student Aid 189

Notes to the Financial Statements 

Direct Loan Program Subsidy Expense

(Dollars in Millions)
190 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Subsidy Expense for Direct Loans Disbursed in the Current Year. The two major 

components of the total subsidy expense for direct loans disbursed in the current year (subsidy 

transfers) are Interest Rate Differential and Other Components. Interest rate differential is 

attributable to the difference between the borrowers’ interest payments due to FSA and the

FSA’s estimated cost to finance the direct loan on a present value basis. The Other 

Components of subsidy transfers primarily consists of contract collection costs, program review 

collections, fees, and loan forgiveness.

Loan Modifications. Loan modifications for the Direct Loan program for FY 2020 included the 

following:

• CARES Act. The CARES Act automatically suspended principal and interest payments 

and set interest rates to 0 percent on federally held student loans starting in March 

through September 30, 2020. The relief for borrowers resulted in an upward modification 

cost of $24.6 billion, with an additional $459 million for cancelled loans for students that 

did not complete the semester due to a qualifying emergency. There was a net positive 

$82 million modification adjustment transfer associated with this modification bringing,

the total to $25.0 billion.

• Presidential Memorandum (“Memorandum on Continued Student Loan Payment Relief 

During the COVID-19 Pandemic”). On August 8, 2020, the Administration issued a 

Presidential Memorandum that continued the temporary suspension of payments and 

the waiver of all interest on federally held student loans through December 31, 2020. 

The relief for borrowers resulted in an upward modification cost of $13.5 billion. There 

was a net negative $66 million modification adjustment transfer associated with this 

modification, bringing, the total to $13.6 billion.

• Total and Permanent Disability. FSA recorded an upward modification for costs 

associated with the regulatory action to provide proactive discharge (unless the borrower 

elects to reject the discharge) to borrowers for whom the Department of Veterans Affairs 

provides information showing the borrower has a total and permanent disability. These 

discharges resulted in an upward modification cost of $1.0 billion. There was a net 

negative $98 million modification adjustment transfer associated with this modification, 

bringing, the total to $1.1 billion.

Net Upward Subsidy Re-estimates for All Prior Year Loan Cohorts. The Direct Loan 

program subsidy re-estimate increased subsidy expense in FY 2020 by $56.1 billion. 

Re-estimated costs only include cohorts that are 90 percent disbursed (i.e., cohort years 

1994–2019). The re-estimate reflects the assumption updates and other changes described 

below.

In addition to the major assumption updates described below, the re-estimate reflects several 

other assumption updates, including interest rates provided by OMB, loan volume, and contract 

collection costs.

• IDR Model Changes (including PSLF). FSA completed a standard IDR data update to 

reflect the immediate prior cycle for defaults, prepayments and Death, Disability, & 

Bankruptcy (DDB). The DDB update includes adjustments for the Total Permanent 

Disability for Veterans regulation. In addition, an existing borrower income file was 
Fiscal Year 2020 Annual Report | Federal Student Aid 191

Notes to the Financial Statements 

calibrated using an additional year of IDR application data through 2018. The additional 

year of borrower income data taken from IDR applications has been substantially lower 

than projected. As such, FSA reduced its projections of future borrower income by 35%, 

increasing costs associated with IDR. FSA also analyzed the actual PSLF approval rates 

and supplementary data. As a result of that analysis, the PSLF approval rate was 

adjusted downward for initial cohorts to better reflect the actual data. Trends indicate 

that there has been some improvement in PSLF approval rates over time as borrowers 

better understand the application process. PSLF estimates were revised to reflect the 

most recent borrower behavior and adjust the temporal element to ramp up PSLF 

forgiveness over time. The combined effect of these updates led to a net upward reestimate of $35.5 billion.

• Repayment Plans. FSA updated the data and made an adjustment to exclude special 

consolidation of FFEL loans in FY 2012 and FY 2013 from the model. These loans are 

modeled separately and were less likely to enroll in income dependent repayment plans 

than typical consolidation loans. The combined effect of these changes led to a net 

upward re-estimate of $6.5 billion.

• Default. In addition to the adjustments for the CARES Act, FSA updated the data and 

incorporated actual unemployment rates from the Bureau of Labor Statistics through 

June 2020. The combined effect of these changes led to a net upward re-estimate of 

$1.8 billion.

• 2019 Cohort Assumption Changes. The technical re-estimate cannot reflect the impacts 

of certain assumption changes applicable to the current year loan cohort until the 

following fiscal year per OMB guidance. The current year’s re-estimate includes a net 

upward adjustment of $4.8 billion for these current year assumption changes attributable 

to the FY 2019 cohort.

• Interest on the Re-estimate. Interest on re-estimates is the amount of interest that would 

have been earned or paid by each cohort on the subsidy re-estimate, if the re-estimated 

subsidy had been included as part of the original subsidy estimate. The interest on the 

re-estimate calculated on the overall subsidy re-estimate resulted in a net upward reestimate of $5.9 billion.

• Interactive Effects. The re-estimate includes a net upward re-estimate of $1.5 billion 

attributed to the interactive effects of the assumption changes described above. Each 

assumption described above is run independently. The interactive effect is a result of 

combining all assumptions together to calculate the final re-estimate.

Direct Loan Subsidy Rates—Cohort 2020
192 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

The subsidy rates disclosed pertain only to the current year’s cohorts. These rates cannot be 

applied to the direct loans disbursed during the current reporting year to yield the subsidy 

expense. The subsidy expense for new loans reported in the current year could result from 

disbursements of loans from both current year cohorts and prior years cohorts. The subsidy 

expense reported in the current year also includes modifications and re-estimates. The subsidy 

costs of FSA’s student loan programs, especially the Direct Loan program, are highly sensitive 

to changes in actual and forecasted interest rates. The formulas for determining program 

interest rates are established by statute; the existing loan portfolio has a mixture of borrower 

and lender rate formulas. Interest rate projections are based on probabilistic interest rate 

scenario inputs developed and provided by OMB.

Direct Loan Program Reconciliation of Allowance for Subsidy

(Dollars in Millions)

The estimation process used to determine the amount of positive or negative subsidy expense 

each fiscal year, and subsequently the cumulative taxpayer cost of the program (allowance for 

subsidy), is subject to various external risk factors which often show strong interdependence 

with one another. These risks include uncertainty about changes in the general economy, 

changes in the legislative and regulatory environment, and changing trends in borrower 

performance with regard to contractual cash flows within the loan programs.

Due to the complexity of the Direct Loan program, there is inherent projection risk in the process 

used for estimating long-term program costs. As stated, some uncertainty stems from potential 

changes in student loan legislation and regulations because these changes may fundamentally 

alter the cost structure of the program. Operational and policy shifts may also affect program 

costs by causing significant changes in borrower repayment timing. Actual performance may 

deviate from estimated performance, which is not unexpected given the long-term nature of 

these loans (cash flows may be estimated up to 40 years), and the multitude of projection paths 

and possible outcomes. The high percentage of borrowers in Income Driven Repayment Plans

has made projection of borrower incomes a key input for the estimation process. This 

uncertainty is directly tied to the macroeconomic climate and is another inherent program 

element that displays the interrelated risks facing the Direct Loan program.

Loans written off result from borrowers having died, becoming disabled, or declaring

bankruptcy. The interest rate re-estimate reflects the cost of finalizing the Treasury borrowing 

rate to be used for borrowings received to fund the disbursed portion of the loan awards 

obligated.
Fiscal Year 2020 Annual Report | Federal Student Aid 193

Notes to the Financial Statements 

Federal Family Education Loan Program. FFEL was established in fiscal year 1965, and is a 

guaranteed loan program. As a result of the SAFRA Act, no new FFEL loans have been made 

since July 1, 2010. Federal guarantees on FFEL program loans and commitments remain in 

effect for loans made before July 1, 2010, unless they were sold to FSA through an ECASLA 

authority (acquired FFEL loans), consolidated into a direct loan, or otherwise satisfied, 

discharged, or cancelled.

FFEL Guaranteed Loans Outstanding

(Dollars in Billions)

As of September 30, 2020, the total principal value of guaranteed loans outstanding and the 

amount of that principal which is guaranteed is approximately $128.9 billion.

Additionally, the FFEL program guarantees outstanding interest balances. As of September 30, 

2020, the interest balances outstanding for guaranteed loans held by lenders was approximately 

$4.6 billion.

FSA’s total FFEL program guarantees (principal and interest) are approximately $133.5 billion 

as of September 30, 2020. Of the total guaranteed amount, FSA would expect to pay a smaller 

amount to the guaranty agencies. The guarantee rates range from 75 to 100 percent of the 

principal and interest balance depending on the type of claim, when the loan was made, and the 

guaranty agency's claim experience. For purposes of disclosing FSA’s total risk exposure for 

FFEL guarantees, the highest reimbursement rate of 100 percent is assumed.

Defaulted and acquired FFEL loans are accounted for as assets as shown in the following table.
194 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

FFEL Program Loan Receivables

(Dollars in Millions)
Fiscal Year 2020 Annual Report | Federal Student Aid 195

Notes to the Financial Statements 

FFEL Program Subsidy Expense

(Dollars in Millions)

Loan Modifications. Loan modifications for the FFEL Loan program for FY 2020 included the 

following:

• CARES Act. The CARES Act automatically suspended principal and interest payments 

and set interest rates to 0 percent on federally held student loans, including loans 

purchased under ECASLA, starting in March through September 30, 2020. The relief for 

borrowers resulted in a net upward modification cost of $1,755 million that included a 

positive modification transfer of $15 million.

• Presidential Memorandum (“Memorandum on Continued Student Loan Payment Relief 

During the COVID-19 Pandemic”). On August 8, 2020, the Administration issued a 

Presidential Memorandum that continued the temporary suspension of payments and 

the waiver of all interest on federally held student loans through December 31, 2020. 

The relief for borrowers resulted in an upward modification cost of $1,051 million that 

included a positive modification transfer of $9 million.

• Secretary’s Discretion. FSA extended certain provisions of the student loan deferrals not 

covered by the CARES Act to defaulted guaranteed loans held by FSA, resulting in an 

upward modification cost of $492 million that included a positive modification adjustment 

transfer of $4 million.

• Total and Permanent Disability. FSA recorded an upward modification for costs 

associated with the regulatory action to provide proactive discharge (unless the borrower 

elects to reject the discharge) to borrowers for whom the Department of Veterans Affairs 

provides information showing the borrower has a total and permanent disability. These 

discharges resulted in an upward modification cost of $127 million across the FFEL and 

ECASLA programs.
196 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Net Downward Subsidy Re-estimates. The FFEL subsidy re-estimate decreased subsidy 

expense in FY 2020 by $1.3 billion. The net downward re-estimates in these programs were due 

primarily to interest rates provided by OMB used in the calculation of special allowance 

payments, updated disability discharges, and prepayment rates.

FFEL Program Reconciliation of Liabilities for Loan Guarantees

(Dollars in Millions)

Liabilities for Loan Guarantees is included as a component of other liabilities on the balance 

sheet (See Note 9).

Other activity includes negative special allowance collections, collections on defaulted FFEL 

loans, guaranty agency expenses, and loan cancellations due to death, disability, or bankruptcy.
Fiscal Year 2020 Annual Report | Federal Student Aid 197

Notes to the Financial Statements 

Allowance for Subsidy Reconciliation for Acquired FFEL Loans

(Dollars in Millions)

Other Credit Programs for Higher Education

(Dollars in Millions)

Federal Perkins Loan Program. Loans made through the Federal Perkins Loan program were 

low-interest federal student loans for undergraduate and graduate students with 

exceptional financial needs. Schools made these Perkins loans to their students and are 

responsible for servicing the loans throughout the repayment term. Borrowers who undertake 

certain public, military, or teaching service employment are eligible to have all or part of their 

loans cancelled.
198 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

The Perkins Loan program was a revolving loan program where the loan repayments collected 

from former students were utilized to make new loans to current students. FSA provided most of 

the capital used by schools to make these loans to eligible students. Participating schools 

provided the remaining program funding. In some statutorily defined cases, funds were provided 

by FSA to reimburse schools for loan cancellations. The above schedule includes only Perkins 

loans which were assigned to FSA when schools discontinued their participation in the program. 

For these assigned Perkins loans, collections of principal, interest, and fees, net of amounts 

paid to cover contract collection costs totaled $38 million and $80 million for FY 2020 and 

FY 2019, respectively.

The Federal Perkins Loan Program Extension Act of 2015 (Extension Act) eliminated the 

authorization for schools to make new Perkins loan disbursements as of September 30, 2017, 

and ended all Perkins loan disbursements by June 30, 2018. Prior to the authority for new 

Perkins loans ending, collections made by the schools would go back into each school’s Perkins 

fund to be utilized to make more loans. Schools are required to return to FSA the federal share 

of any excess beyond what is needed (excess liquid capital).

Schools are not required to liquidate and close out their programs now that no new Perkins 

loans are being made. Schools continue to take in collections and are required to return the 

federal share of the capital that is collected to FSA on an annual basis. Schools returned $1,279 

million and $10 million to FSA in FY 2020 and FY 2019, respectively, for the federal share of 

collected cash.

Schools will continue to service outstanding Perkins loans to recover the money they 

contributed to their Perkins funds for as long as it is feasible to do so or until the eventual winddown of their portfolios. Schools that liquidate and close out their programs must transfer any 

outstanding portfolio to FSA and liquidate any final cash. Most recent data from the 2018-2019 

reporting year shows a $5.2 billion outstanding principal balance on Perkins loans held by 

schools, and FSA’s equity interest on this portfolio is $4.3 billion.

The amounts collected by FSA annually for defaulted Perkins loans and for the return of the 

federal share of schools’ Perkins capital contributions are returned to the Treasury General 

Fund (See Note 12)

TEACH Grant Program. FSA awards annual grants of up to $4,000 to eligible undergraduate 

and graduate students who agree to serve as full-time mathematics, science, foreign language, 

bilingual education, special education, or reading teachers at high-need schools for four years 

within eight years of graduation. The maximum lifetime grant for students is $16,000 for 

undergraduate programs and $8,000 for graduate programs. For students failing to fulfill the 

service requirement, the grants are converted to Direct Unsubsidized Stafford Loans. The

program is operated as a loan program under the FCRA for budget and accounting purposes 

since grants can be converted to direct loans. The relief for borrowers provided by the CARES 

Act and Executive Action loan deferrals resulted in upward modification costs of $11 million and 

$5 million, respectively. The regulatory action to provide Total and Permanent Disability 

discharges resulted in an upward modification of less than $0.1 million.
Fiscal Year 2020 Annual Report | Federal Student Aid 199

Notes to the Financial Statements 

TEACH Subsidy Rates—Cohort 2020

HEAL Program. FSA assumed responsibility in FY 2014 for the HEAL program and the 

authority to administer, service, collect, and enforce the program. The HEAL program is 

structured as required by the FCRA. A liquidating account is used to record all cash flows to and 

from the government resulting from guaranteed HEAL loans committed prior to 1992. All loan 

activity for 1992 and beyond is recorded in corresponding financing accounts. The relief for 

borrowers provided by the Executive Action and the FSA’s extension of the CARES Act 

provisions for loan deferrals resulted in upward modification costs of $1 million and $2 million, 

respectively.

Note 6. Liabilities Not Covered by Budgetary Resources

Liabilities Not Covered

(Dollars in Millions)

Note 7. Debt

Debt

(Dollars in Millions)
200 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

FSA borrows from Treasury’s Bureau of the Public Debt to fund the disbursement of new loans 

and the payment of credit program outlays and related costs. During FY 2020, debt decreased 

2.9 percent from $1,287.5 billion in the prior year to $1,249.8 billion. FSA makes periodic 

principal payments, after evaluating the cash position and liability for future outflows in each 

program and pays interest, as mandated by the FCRA.

Approximately 92.8 percent of FSA’s debt, as of September 30, 2020, is attributable to the 

Direct Loan program. The majority of the net borrowing activity (borrowing less repayments) for 

the year was designated for funding new Direct Loan disbursements.

FSA also borrows from Treasury for activity in the Other Credit Programs for Higher Education. 

During FY 2020, TEACH net borrowing of $59 million was used for the advance of new grants 

and repayments of principal made to Treasury.

Note 8. Subsidy Due to Treasury General Fund

Subsidy Due to Treasury General Fund

(Dollars in Millions)

Note 9. Other Liabilities

Other Liabilities

(Dollars in Millions)
Fiscal Year 2020 Annual Report | Federal Student Aid 201

Notes to the Financial Statements 

Note 10. Net Cost of Operations

Gross Costs and Exchange Revenue by Program

(Dollars in Millions)
202 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Credit Program Interest Expense and Revenues 

(Dollars in Millions)

Interest expense equals interest revenue plus administrative fees accrued for all credit 

programs due to subsidy amortization. Subsidy amortization is required by the FCRA and 

accounts for the difference between interest expense and revenue cash flows. For direct loans, 

the allowance for subsidy is adjusted with the offset to interest revenue. For guaranteed loans, 

the liability for loan guarantees is adjusted with the offset to interest expense.

Grant Expenses

(Dollars in Millions)

Pell Grants – provides need-based grants to students to promote access to postsecondary 

education. Grant amounts are dependent on: the student’s expected family contribution; the 

cost of attendance (as determined by the institution); the student’s enrollment status (full-time or 

part-time); and whether the student attends for a full academic year or less. Pell Grants are the 

single largest source of grant aid for postsecondary education.

Federal Work-Study Program – provides funds by formula to enable eligible institutions to offer 

employment to students based on financial needs. The program is available to full-time or parttime students and encourages community service work. The work is often related to the 

student’s course of study. This program is administered by the schools that participate in the 

Federal Work-Study program. Hourly earnings under this program must be at least the Federal 

minimum wage. Federal funding, in most cases, pays 75 percent of a student’s hourly wage, 

with the remaining 25 percent paid by the employer.

Federal Supplemental Education Opportunity Grants – provides funds by formula to enable 

eligible institutions to offer grants to students based on need. Federal grants distributed under 

this program are administered directly by the financial aid office at each participating school.
Fiscal Year 2020 Annual Report | Federal Student Aid 203

Notes to the Financial Statements 

Note 11. COVID-19 Activity (See Note 5)

COVID-19 Activity

(Dollars in Millions)

Indirect appropriations were provided to fund loan modifications resulting from student loan 

deferrals authorized under the CARES Act and extended by the Administration’s Presidential 

Memorandum. FSA also extended the provisions of the student loan deferrals to guaranteed 

loans not covered by the CARES Act. (See Note 5)
204 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

Note 12. Statements of Budgetary Resources

The SBR compares budgetary resources with the status of those resources. As of September 

30, 2020, budgetary resources were $389.1 billion and net agency outlays were $104.4 billion. 

As of September 30, 2019, budgetary resources were $306.1 billion and net agency outlays 

were $97.3 billion.

Net Adjustments to Unobligated Balances Brought Forward

(Dollars in Millions)

During the years ended September 30, 2020 and September 30, 2019, certain adjustments 

were made to the balance of unobligated budgetary resources available as of October 1, 2019 

and October 1, 2018. These adjustments include, among other things, recoveries of prior year 

unpaid obligations that result from downward adjustments of undelivered orders that were 

obligated in a prior fiscal year.

Unused Borrowing Authority

(Dollars in Millions)

FSA is given authority to draw funds from Treasury to finance the Direct Loan, FFEL, and other 

loan programs. Unused borrowing authority is a budgetary resource and is available to support 

obligations for these programs. FSA periodically reviews its borrowing authority balances in 

relation to its obligations resulting in the withdrawal of unused amounts.
Fiscal Year 2020 Annual Report | Federal Student Aid 205

Notes to the Financial Statements 

Undelivered Orders at the End of the Period

(Dollars in Millions)

Undelivered orders represent the amount of goods and/or services ordered which have not 

been actually or constructively received. The paid amount includes any orders which may have 

been prepaid or advanced but for which delivery or performance has not yet occurred.

Distributed Offsetting Receipts

(Dollars in Millions)

The majority of the distributed offsetting receipts line item on the SBR represents amounts paid 

from the Direct Loan program and FFEL program financing accounts to Treasury General Fund 

receipt accounts for downward current fiscal year executed subsidy re-estimates and negative 

subsidies. The collections are recorded as offsetting receipts and they offset the agency's 

budget authority and outlays.

Reconciliation of SBR to Budget of the United States Government

(Dollars in Millions)
206 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

The FY 2022 Budget of the United States Government (President’s Budget), which presents the 

actual amounts for the year ended September 30, 2020, has not been published as of the issue 

date of these financial statements. The FY 2022 President’s Budget is scheduled for release in 

February 2021 and will be made available on OMB’s website. The table above reconciles the 

FY 2019 SBR to the FY 2021 President’s Budget (FY 2019 actual amounts) for budgetary 

resources, new obligations and upward adjustments, distributed offsetting receipts, and net 

outlays.

Reconciling differences exist because the President’s Budget excludes expired funds. 

Additionally, the President’s Budget includes a public enterprise fund that reflects the gross 

obligations by the FFEL program for the estimated activity of the consolidated federal fund of 

the guaranty agencies. Ownership by the federal government is independent of the actual 

control of the assets. Since the actual operation of the federal fund is independent from FSA’s 

direct control, budgetary resources and new obligations and upward adjustments are estimated 

and disclosed in the President’s Budget to approximate the gross activities of the combined 

federal fund. Amounts reported on the SBR for the federal fund are compiled by combining all 

guaranty agencies’ annual reports to determine a net valuation amount for the federal fund.
Fiscal Year 2020 Annual Report | Federal Student Aid 207

Notes to the Financial Statements 

Note 13. Reconciliation of Net Cost to Net Outlays

Reconciliation of Net Cost

(Dollars in Millions)

This reconciliation explains the relationship between FSA’s net cost of operations and its net 

outlays. Reconciling items result from transactions which did not result in a current period outlay 

but did result in a current period cost, and current period outlays that did not result in a current 

period cost.

Disbursements for new FCRA loans and collections of principal and interest on existing FCRA 

loans are recorded in non-budgetary credit reform financing accounts. These disbursements 

and collections are reported on the Statement of Budgetary Resources as disbursements, net, 

and not as agency outlays, net. Since these disbursements and collections affect neither net 

cost of operations nor agency outlays, net, they are excluded from this reconciliation as are any 

increases or decreases in the FCRA loan receivable balances.

The two major reconciling differences, both associated with FSA’s FCRA loan programs, are for 

current-year subsidy accrual costs and current-year budget subsidy costs.
208 Fiscal Year 2020 Annual Report | Federal Student Aid

Notes to the Financial Statements 

• Current-year subsidy accrual costs are the portion of the current-year loan subsidy 

re-estimates not impacting the current year outlays.

• Current-year budget subsidy costs are current year indirect appropriations provided to 

fund subsidy costs accrued in the prior year. This includes the portion of the current 

year’s executed President’s budget re-estimates not included in this year’s net cost 

subsidy expense.

Note 14. Commitments and Contingencies

FSA discloses contingencies where any of the conditions for liability recognition are not met and 

there is at least a reasonable possibility that a loss or an additional loss may have been incurred 

in accordance with FASAB Standard No. 5, Accounting for Liabilities of the Federal 

Government. The following commitments are amounts for contractual arrangements that may 

require future financial obligations.

Future Minimum Lease Payments

(Dollars in Millions)

FSA leases two buildings from the General Services Administration. The table above presents 

the estimated future minimum lease payments for these buildings.

Guaranty Agencies

FSA may assist guaranty agencies experiencing financial difficulties. FSA has not done so in 

fiscal years 2020 or 2019 and does not expect to in future years. No provision has been made in 

the financial statements for potential liabilities.

Litigation and Other Claims

The Department is involved in various lawsuits incidental to its operations. In the opinion of 

management, the ultimate resolution of pending litigation will not have a material effect on 

FSA’s financial position. As appropriate, the Department would seek recovery from Treasury’s 

Judgment Fund for any loss in litigation that may occur. The Judgment Fund is a permanent, 

indefinite appropriation available to pay judgments against the government, if appropriated 

funds cannot be used.

The cost of loan forgiveness related to borrower defense claims reflected in the accompanying 

financial statements is limited to loans originated through September 30, 2020. The final 

disposition of claims filed and those yet to be filed from loans originated before September 30, 

2020, is not expected to have a material impact on these financial statements.
Fiscal Year 2020 Annual Report | Federal Student Aid 209

Notes to the Financial Statements 

Other Matters

Some portion of the current-year financial assistance expenses (grants) may include funded 

recipient expenditures that are subsequently disallowed through program review or audit

processes. In the opinion of management, the ultimate disposition of these matters will not have 

a material effect on the FSA’s financial position.
210 Fiscal Year 2020 Annual Report | Federal Student Aid

Required Supplementary Information (Unaudited) 

Required Supplementary Information (Unaudited) 
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Required Supplementary Information (Unaudited) 
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Required Supplementary Information (Unaudited) 
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Required Supplementary Information (Unaudited) 
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Required Supplementary Information (Unaudited) 
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Required Supplementary Information (Unaudited) 
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Fiscal Year 2020 Annual Report | Federal Student Aid 217

Independent Auditors’ Report 

Independent Auditors’ Report

Office of Inspector General Audit Transmittal
218 Fiscal Year 2020 Annual Report | Federal Student Aid

Independent Auditors’ Report 
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Independent Auditors’ Report 

Independent Auditors’ Report
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Independent Auditors’ Report 
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Independent Auditors’ Report 
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Independent Auditors’ Report 
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Independent Auditors’ Report 
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Independent Auditors’ Report 
Fiscal Year 2020 Annual Report | Federal Student Aid 233

Other Information 

Other Information (Unaudited)
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Other Information 

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Fiscal Year 2020 Annual Report | Federal Student Aid 235

Other Information 

Other Information

Summary of Financial Statement Audit and Management 

Assurances

Summary of Financial Statement Audit

Audit Opinion: Unmodified

Restatement: No

Table 69: Material Weaknesses

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

Total Material Weaknesses 1 1 1 0 1 

For details on the management assurances related to the FSA programs, please refer to the 

Analysis of Systems, Controls and Legal Compliance discussion in the Management’s 

Discussion and Analysis section of this document as well as the Summary of Financial 

Statement Audit and Management Assurances section in the Other Information section of the 

Department’s AFR.

FSA Management Challenges

For details on FSA Management Challenges, please refer to the Office of Inspector General’s 

Management Challenges for FY 2020 Executive Summary found in the Other Information 

section located within the Department’s AFR.
236 Fiscal Year 2020 Annual Report | Federal Student Aid

Other Information 

Payment Integrity

Payment Integrity Information Act Reporting Details

The Payment Integrity Information Act of 2019 (Pub. L. 116-117) requires federal agencies to 

report information annually on improper payments to the President and Congress. For improper 

payments information, FSA’s activities are part of an overall Departmental integrated reporting 

effort and reported on https://paymentaccuracy.gov. 

In FY 2020, the Pell Grant and Direct Loan Programs are the FSA programs identified as

susceptible to significant improper payments and OMB designated high priority programs. FSA

continues to place additional emphasis on these important programs as required by OMB 

guidance to ensure payment integrity and minimize improper payments. Details on FSA’s Pell 

Grant and Direct Loan improper payment estimation methodologies, improper payment 

estimates, root causes, and corrective actions can be found at paymentaccuracy.gov. 
Fiscal Year 2020 Annual Report | Federal Student Aid 237

Appendices 

Appendices
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Appendices 

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Fiscal Year 2020 Annual Report | Federal Student Aid 239

Appendix A: Discontinued Strategic Goals and Performance Metrics

Appendix A: Discontinued Strategic Goals and 

Performance Metrics

In FY 2019, FSA initiated the development of an organizational five-year performance plan that 

aligned with its vision to create a more student-focused, agile, and transparent organization. 

The FY 2020–24 Strategic Plan, establishes ambitious goals and objectives to ensure that FSA 

will continue to improve upon its mission while increasing accountability in all areas of 

organizational performance. The development of the new strategic plan was coordinated with 

the closing of FSA’s FY 2015–19 Strategic Plan on September 30, 2019.

To maintain consistency with the previous strategic plan, FSA transitioned eight performance 

metrics into its new strategic plan, while discontinuing five performance metrics from the 

previous strategic plan. The discontinued metrics are presented below. For more information on 

the prior year results of the discontinued metrics, refer to the FSA FY 2019 Annual Report. 

Table 70: Discontinued Performance Metrics 

Performance Metric Title

Performance Metric A.4 Social Media Channel Subscribership

Performance Metric B.1 Improper Payment Rate

Performance Metric C.1 Aid Delivery Costs per Application

Performance Metric D.2 Percentage of Contract Dollars Competed by 

FSA

Performance Metric D.3 Collection Rate
240 Fiscal Year 2020 Annual Report | Federal Student Aid

Appendix A: Discontinued Strategic Goals and Performance Metrics 

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Fiscal Year 2020 Annual Report | Federal Student Aid 241

Appendix B: Glossary of Acronyms and Terms

Appendix B: Glossary of Acronyms and Terms

Acronym Description 

A

ABCP Conduit Asset-Backed Commercial Paper Conduit

ACSI American Customer Satisfaction Index

AD Administratively Determined

AFR U.S. Department of Education FY 2020 Agency Financial Report

Annual Report Federal Student Aid FY 2020 Annual Report 

APG Agency Priority Goal

Appendix A OMB Circular A-123, Appendix A, Management of Reporting and 

Data Integrity Risk

AR Abandon Rate

ASA Average Speed to Answer

ASLA Annual Student Loan Acknowledgement

AWG Administrative Wage Garnishments

B 

BD Borrower Defense 

BPO Business Process Operations

C

CARES Act Coronavirus Aid, Relief, and Economic Security Act

Caucus Student Loan Ombudsman Caucus

CDR Cohort Default Rate

COD Common Origination and Disbursement

COO Chief Operating Officer

COVID-19 Coronavirus Disease 2019

CSRS Civil Service Retirement System
242 Fiscal Year 2020 Annual Report | Federal Student Aid

Appendix B: Glossary of Acronyms and Terms 

D

DCC Digital Customer Care

DDB Death, Disability, and Bankruptcy

the Department U.S. Department of Education

Direct Loan William D. Ford Federal Direct Loan

DMCS Debt Management and Collection System

DOL U.S. Department of Labor

DRG Default Resolution Group

E

ECASLA Ensuring Continued Access to Student Loans Act of 2008

EDWA Enterprise Data Warehouse and Analytics

ERM Enterprise Risk Management

F

FAFSA® Free Application for Federal Student Aid®

FASAB Financial Accounting Standards Advisory Board

FCRA Federal Credit Reform Act of 1990

FECA Federal Employees’ Compensation Act

Federal Funds Federal Student Loan Reserve Funds

FERS Federal Employees Retirement System

FEVS Federal Employee Viewpoint Survey

FDMS Feedback and Dispute Management System

FFEL Federal Family Education Loan 

FMFIA Federal Managers’ Financial Integrity Act of 1982

FRD Fraud Risk Division

FSA Federal Student Aid

FSA PPO Federal Student Aid Partner and Participation Oversight 

FSATC Federal Student Aid Training Center

FSEOG Federal Supplemental Educational Opportunity Grant

FUTURE Act Fostering Undergraduate Talent by Unlocking Resources for 

Education Act

FY Fiscal Year

FY 2015–19 Strategic 

Plan 

Federal Student Aid for Fiscal Years 2015–19 Strategic Plan
Fiscal Year 2020 Annual Report | Federal Student Aid 243

Appendix B: Glossary of Acronyms and Terms

FY 2020–24 Strategic 

Plan 

Federal Student Aid for Fiscal Years 2020 Through 2024 Strategic 

Plan

G

GAAP Generally Accepted Accounting Principles

GAO Government Accountability Office

GLBA Gramm-Leach-Bliley Act

GS General Schedule

GSMR Granite State Management and Resources

H

HCERA Health Care and Education Reconciliation Act of 2010

HCWG Human Capital Working Group

HEA Higher Education Act of 1965, as amended

HEAL Health Education Assistance Loan

I

IDR Income Driven Repayment

IFAP Information for Financial Aid Professionals

IHE Institution of Higher Education

IRS Internal Revenue Service

L 

LMS Learning Management System

M

Met Performance result met or exceeded target

MOU Memorandum of Understanding

MSI Minority Serving Institution

MSURSD Minority-Serving Under-Resourced Schools Division

N

N/A Performance result is not applicable because the performance metric

was not developed, the performance metric was not implemented, or 

the required data were not available in time for inclusion.

Next Gen FSA Next Generation Financial Services Environment

Next Gen PPO Next Generation Partner Participation and Oversight

NFP Not-For-Profit

Not met Performance result did not meet target
244 Fiscal Year 2020 Annual Report | Federal Student Aid

Appendix B: Glossary of Acronyms and Terms 

NSLDS National Student Loan Data System

O

OCIO Office of the Chief Information Officer

OIG Office of Inspector General

OIO Operational Improvement and Oversight

OMB U.S. Office of Management and Budget

OMB Circular A-123 OMB Circular A-123, Management’s Responsibility for Enterprise 

Risk Management and Internal Control

OPEID Office of Postsecondary Education Identification

OPM U.S. Office of Personnel Management

P

PAYE Pay As You Earn

PBO Performance-Based Organization

PCA Private Collection Agency

Pell Grant Federal Pell Grant Program

PEPS Postsecondary Education Participants System

PHEAA Pennsylvania Higher Education Assistance Agency

PLUS Parent Loan for Undergraduate Students

POE Principles of Excellence

President’s Budget Budget of the United States Government

Pub. L Public Law

PSLF Public Service Loan Forgiveness

S

SBR Statement of Budgetary Resources

Secretary Secretary of Education

SecOps Security Operations

SES Senior Executive Service

T

TEACH Grant Teacher Education Assistance for College and Higher Education 

Grant

TEPSLF Temporarily Expanded Public Service Loan Forgiveness

Title IV Title IV of the Higher Education Act of 1965, as amended

TIVAS Title IV Additional Servicers
Fiscal Year 2020 Annual Report | Federal Student Aid 245

Appendix B: Glossary of Acronyms and Terms

TOP Treasury Offset Program

TPD Total and Permanent Disability

TPDR Third-Party Debt Relief

Treasury U. S. Department of Treasury

U

U.S. United States

W

WDD Workforce Development Division
246 Fiscal Year 2020 Annual Report | Federal Student Aid

Appendix B: Glossary of Acronyms and Terms 

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Fiscal Year 2020 Annual Report | Federal Student Aid 247

Appendix C: Availability of the Federal Student Aid Annual Report 

Appendix C: Availability of the Federal Student Aid 

Annual Report

The Federal Student Aid FY 2020 Annual Report and the Annual Reports from prior years are

available on the following websites:

• FSA: StudentAid.gov/strategic-planning-reporting

• The Department: http://www.ed.gov/about/reports/annual/index.html

The Federal Student Aid Fiscal Years 2020 Through 2024 Strategic Plan and prior years’

strategic plans are also available at StudentAid.gov/strategic-planning-reporting.

Stay connected to Federal Student Aid through social media: 

• Visit the FSA website: StudentAid.gov

• Like FSA on Facebook : Facebook.com/FederalStudentAid

• Follow FSA on Twitter : @FAFSA

• Find FSA on YouTube : YouTube.com/user/FederalStudentAid
248 Fiscal Year 2020 Annual Report | Federal Student Aid

Appendix C: Availability of the Federal Student Aid Annual Report 

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Acknowledgements

The FSA FY 2020 Annual Report was prepared with the energies and talents of many Federal 

Student Aid employees. To these dedicated individuals, the Chief Operating Officer and Chief 

Financial Officer would like to offer their sincere appreciation and recognition.

In particular, we would like to recognize the following Federal Student Aid offices for their 

contributions:

• Finance Office. 

• Strategic Planning and Reporting. 

• Office of the Ombudsman. 

• Office of Strategic Communications. 

• COO Front Office. 

We also offer our sincerest thanks and acknowledgement to the staff of the following other 

offices within the Department of Education for their contributions: 

• Office of Finance and Operations. 

• Budget Service. 

• Office of the Secretary. 

• Office of Legislation and Congressional Affairs. 

• Office of Chief Information Officer. 

We would also like to acknowledge the Office of Inspector General and KPMG LLP for the 

professional manner in which they conducted the audit of the FY 2020 Financial Statements. 

The Federal Student Aid FY 2020 Annual Report

Federal Student Aid

A Principal Office of the U.S. Department of Education

Finance Office

November 2020