34 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

Forward-Looking Information

This section summarizes information pertinent to the 

Department’s future progress and success.

ENTERPRISE RISK MANAGEMENT

The Department’s enterprise risk management (ERM) 

program supports agencywide efforts to maximize the 

Department’s value to students and taxpayers through 

achievement of strategic goals and objectives. The 

Department’s ERM program strategically focuses on the 

complete spectrum of the organization’s significant risks 

and the combined impact of those risks as an interrelated 

portfolio rather than simply addressing risks within silos. 

This coordinated approach leverages data and analytical 

solutions to identify, measure, and assess challenges related 

to mission delivery and resource management. Through 

ERM, the Department seeks to embed a systematic and 

deliberate view of risk into key management practices, 

yielding more effective performance and operational 

outcomes. The Department’s implementation of ERM 

includes three critical strategies that are more fully 

described under Strategic Objective 4.2, Identify, assess, 

monitor and manage enterprise risks:

• Creating a risk-aware culture that includes transparent 

discussions of risks.

• Implementing an ERM framework and capability 

that leverages existing risk management activities and 

governance bodies.

• Managing risks in a more coordinated and 

strategic manner.

The Office of Enterprise Data Analytics and Risk 

Management (OEDARM), within the Office of Finance 

and Operations (OFO), leads the agency’s overall ERM 

strategy and formally aligns ERM and internal controls 

processes. OEDARM leadership established a formal 

ERM Working Group (ERMWG) in FY 2020 with 

senior representation across the agency to further solidify 

the Department’s ERM governance structure. Since 

its formation, the ERMWG has been instrumental in 

conducting coordinated risk assessments and further 

incorporating the risks highlighted or exacerbated by the 

COVID-19 pandemic into short- and long-term risk 

planning. In addition to the representation of offices in 

the working group, OEDARM leverages partnerships with 

agency leaders (e.g., the Senior Management Council, the 

Senior Executive Cadre, political leadership) to identify, 

measure, and assess challenges related to mission delivery, 

policy development, and operations to develop coordinated, 

actionable response plans.

OEDARM leadership actively sought to enhance strategic 

partnerships with ERM colleagues across the government 

as well as with Department’s own OIG. Initiatives in FY 

2021 included: identifying metrics to inform the maturity 

of the Department’s risk program; creation of a Knowledge 

Management Action Plan to develop a streamlined 

process of defining, structuring, retaining. and sharing the 

knowledge of Department employees; and the creation of 

digital tools for collecting, analyzing, and reporting risk 

data to promote transparency and accountability across 

the Department. OEDARM additionally established an 

informal, yet crucial, conversation series to bring awareness 

to various risk topics at the Department and to provide an 

open forum for discussion of risk in a safe, comfortable, 

setting. OEDARM’s newly launched ERM internalfacing website contains useful tools, resources, and data 

to better educate and promote healthy risk culture for the 

entire Department.

OEDARM will continue the above and additional 

strategic efforts during FY 2022 to foster a culture of 

continuous improvement within the Department—

where data and awareness of enterprise risk are used to 

objectively inform strategic and operational decisions 

and optimize agency performance. Throughout FY 2022, 

the Department plans to further integrate ERM with 

key management processes—leveraging objective data 

analytics, key performance indicators and key risk 

indicators and considerations inform budget formulation, 

strategic planning, and performance management. In light 

of the current COVID-19 pandemic, the Department has 

intentionally shifted to an even more comprehensive and 

collaborative approach to risk management—to embed 

consideration of externally driven risks related to national 

health emergencies, natural disasters, potential terrorist 
FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 35

MANAGEMENT’S DISCUSSION AND ANALYSIS

threats, and other significant crises that could adversely 

impact continuity of operations and mission delivery.

DIRECT LOAN PROGRAM

The Department’s largest program, the William D. Ford 

Federal Direct Loan (Direct Loan) Program, provides 

students and their families with funds to help pay for their 

postsecondary education costs. The following describes (1) 

the steps the Department has taken to help make student 

debt more manageable and (2) the risks inherent in estimating the cost of the program.

Managing Student Loan Debt

Each year, federal student loans help millions of Americans 

obtain a college education—an investment that, on 

average, has high returns. While the average return to 

having a college degree remains high,1

 some students leave 

school poorly equipped to manage their debt.

Traditionally, federal student loans had fixed-payment 10-

year repayment schedules, making it difficult for borrowers 

to begin repaying at the start of their career when their 

salaries are low. The recent expansion of income-driven 

repayment (IDR) plans allows students the opportunity 

for greater financial flexibility as it pertains to their 

monthly repayment. For more details on these plans, visit 

FSA’s How to Repay Your Loans Portal.

Recent trends in student loan repayment data show that:

• More than 70 percent of the direct loan portfolio is in

administrative forbearance—the suspended payment

status provided to students through the extension of

the student loan repayment deferrals.

• As of June 2021, nearly 8.3 million direct loan

recipients were enrolled in IDR plans, representing a

1 percent increase from June 2020 and an 8 percent

increase from June 2019. Overall, more than

47 percent of direct loan dollars and 32 percent of

borrowers in repayment are enrolled in an IDR plan.

The Department continues to work relentlessly to make 

student loan debt more manageable. Looking to the 

future, the Department will:

• Continue conducting outreach efforts to inform

student loan borrowers of their repayment options

before the emergency loan relief measures expire on

January 31, 2022.

1 https://cew.georgetown.edu/cew-reports/collegepayoff2021/

• Work to improve customer service and student aid

systems and processes by implementing FSA’s Next

Gen FSA, see page 39.

• Continue to support the development of additional

tools, such as the College Scorecard and College

Financing Plan, to increase transparency around

higher education costs and outcomes that may help

students and families make informed decisions before

college enrollment.

Managing Risks and Uncertainty Facing the Direct 

Loan Program’s Cost Estimates

Direct Loan Program costs are estimated consistent with the 

requirements of the Federal Credit Reform Act of 1990. Under 

the act, the future disbursements and collections associated 

with a cohort of loans are estimated for the entire life of the 

loan, up to 40 years in this case. The actual performance of a 

loan cohort tends to deviate from the estimated performance 

during that time, which is not unexpected given the 

inherent uncertainty involved in developing estimates. 

Estimation of Federal credit programs involves inherent 

risk. The Department utilizes the best data available with 

modeling techniques that have been examined over time by 

several outside entities. Management has confidence over 

the estimates by using several different tools to analyze cost 

estimates. Re-estimates on the loan portfolio are performed 

twice a year ensuring that the most up to date data and 

models are used. The four types of inherent risk, described 

below, that make estimating lifetime program costs a 

difficult task.

Legislative, Regulatory, and Policy Risk

There are inherent risks to estimating future lifetime 

disbursements and collections for a cohort stemming 

from legislative, regulatory, or administrative actions. 

For instance, the cost structure of the Direct Loan 

Program may be significantly altered if policies around 

loan forgiveness are expanded. In addition, the effects on 

financial modeling and estimation associated with recent 

legislative, regulatory, and policy action is difficult to 

interpret given the lack of actual trend data availability. 

Some examples of current risks include the following:

Extension of Student Loan Payment Relief During the 

COVID-19 Pandemic: The emergency relief measures 

in the Direct Loan Program, including suspending loan 

payments, halting collections on defaulted loans, and 

setting interest rates to 0 percent have been extended 

through January 31, 2022. These actions have insulated 
36 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

federal student loan performance from economic 

disruption caused by the COVID-19 pandemic, while at 

the same time reducing the amount of loan repayments 

being remitted to the Department. As the pandemic is 

ongoing, there is uncertainty regarding cost estimates as 

future actions to support borrowers during the return to 

repayment in 2022 could affect those received payments. 

Income-Driven Repayment Plans: Without 

consideration of impacts from the pandemic, IDR plans 

tend to be more costly to the government than nonIDR plans. For the 2021 loan cohort, it is estimated that 

the government will recover 44 percent less for loans in 

IDR plans as compared to loans in standard plans. It is 

important to be careful in making such comparisons, 

however, as the underlying characteristics of borrowers 

(and the corresponding behavioral dynamics driving 

selection of plans) also impact the overall cost of loans 

under each plan. Also, having more repayment plan 

options complicates repayment plan selection, since 

the tradeoff decisions when selecting the plans vary by 

borrower and may not always be entirely clear. In general, 

however, the proliferation of IDR plans has made IDR 

terms more generous and made the plans available to a 

greater number of borrowers; these plans are traditionally 

more costly to the government. Selected comparisons 

between projected originations and borrower repayments 

under the different IDR plans are available on the 

Department’s website. Future commitment to promote 

these programs, and potential increased participation in 

these plans, are areas of uncertainty. Future legislative and/

or regulatory activity could also affect the underlying cost 

of IDR plans.

Public Service Loan Forgiveness: Enacted in 2007, the 

Public Service Loan Forgiveness (PSLF) program allows 

a direct loan borrower to have the balance of their direct 

loans forgiven after having made 120 qualifying monthly 

payments under a qualifying repayment plan, while 

working full time for a qualifying public service employer 

(such as government or certain types of nonprofit 

organizations). In general, forgiveness provided via PSLF 

raises the cost of the Direct Loan Program; however, 

there is still uncertainty as to how many borrowers will 

take advantage of the program. Much of this uncertainty 

arises because borrowers are not required to apply for 

the program or provide any supporting documentation 

on their employment until after having made the 120 

qualifying monthly payments, and data on actual PSLF 

forgiveness remains limited, as borrowers first became 

eligible in FY 2018.

Data on approved PSLF applications first became available 

in FY 2018 since borrowers first became eligible for 

PSLF loan forgiveness starting October 1, 2017, after 

having made 120 qualifying payments. The Consolidated 

Appropriations Act, FY 2018, and the Department of 

Education Appropriations Act, FY 2019, each provided 

$350 million toward Temporary Expanded Public Service 

Loan Forgiveness (TEPSLF) for borrowers who met 

eligibility for public service employment but were not 

enrolled in a qualified repayment plan. The Consolidated 

Appropriations Act, FY 2020, and the Consolidated 

Appropriations Act, FY 2021 each provided $50 million 

for TEPSLF. As of September 30, 2021, the total number 

of borrowers who received forgiveness from PSLF and 

TEPSLF exceeded 16,000. The value of this forgiveness 

totaled nearly $1.26 billion. Despite the relatively modest 

numbers of approved applications to date, the number 

of borrowers who have certified their employment in a 

public service organization continues to increase steadily. 

As of September 30, 2021, the number of borrowers with 

certified employment totaled nearly 1.33 million. The 

low number of approved PSLF applications in relation 

to employment certifications may be partially due to 

the complicated nature of the program, in particular the 

determination of what constitutes a qualifying payment. 

In addition, many borrowers who file employment 

certification forms early in their careers may also move 

into private sector employment before completing the 10 

years of qualifying payments and thus may (a) never apply 

for forgiveness or (b) apply for forgiveness much later after 

returning to public service work.

On October 5, 2021, the Department announced 

a temporary change to the PSLF program to allow 

previously ineligible loans to be immediately eligible for 

forgiveness, or additional progress toward forgiveness, 

with no further action on their part. The changes include 

a limited PSLF waiver that allows all payments by student 

borrowers to count toward PSLF, regardless of loan 

program or payment plan and review of denied PSLF 

applications for errors, giving borrowers the ability to 

have their PSLF determinations reconsidered. Borrowers 

who have not previously certified employment will also 

be able to apply for the waiver. Two permanent changes 

to military borrowers working toward PSLF were also 

implemented. Any future congressional or regulatory 

action that may affect eligibility for PSLF continues to be 

an area of uncertainty. 
FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 37

MANAGEMENT’S DISCUSSION AND ANALYSIS

Estimation Risk

Actual student loan outcomes may deviate from estimated 

student loan outcomes, which is not unexpected given 

the long projection window of up to 40 years. The Direct 

Loan Program is subject to a significantly large number 

of borrower-level events and future economic factors that 

heavily impact the ultimate cost of student loans. For 

example, assumptions that need to be estimated for loans 

originating in FY 2021 include how long students will 

remain in school; what repayment plan will be chosen; 

whether the loan will be consolidated; whether the borrower will die prior to completing repayment, become 

disabled, bankrupt, or have another claim for discharge or 

forgiveness (closed school loan discharge, borrower defense 

to repayment, etc.); whether the loan will go into deferment or forbearance; whether the loan will go into default 

and, if so, what collections will be received on the defaulted loan; and, if the loan is in an IDR plan, what the borrower’s employment (public sector or not) and income and 

family size will be over the next 25 years. These projections 

are generally made based on historical data about borrower 

characteristics and behavior, which are more difficult to 

estimate during times of unprecedented uncertainty facing 

students and borrowers in repayment plans today. Lastly, 

the direct loan portfolio has grown from approximately 

$356 billion in FY 2011 to nearly $1.3 trillion as of the 

end of FY 2021. This growth naturally results in larger 

re-estimates, since a re-estimate worth 1 percent of the 

portfolio today would be more than three times as large as 

a similar re-estimate in FY 2011.

Macroeconomic Risk

The ultimate amount, timing, and total value of future 

borrower repayments under the Direct Loan Program are 

heavily affected by certain economic factors, especially 

since the introduction of IDR plans.

In 2021, the COVID-19 pandemic continued to cause 

widespread disruption to the American economy. The 

emergency relief measures provided by Congress and the 

President resulted in flexibilities for federal student loan 

borrowers, continuing to prevent spikes in delinquency 

and default rates. Involuntary loan collections from wage 

garnishment, tax refund reductions, and reductions of 

federal benefits such as Social Security are also suspended. 

However, the ultimate impact of the pandemic on longterm Direct Loan Program costs is subject to significant 

uncertainty and will depend on, among other things, 

short- and long-term unemployment, economic growth 

trends, and potential structural changes in the overall 

economy and job markets. Some types of macroeconomic 

risk are inherent to student loan cost estimation, and the 

Department analyzes them regularly—though some of 

these risks have been exacerbated by the unprecedented 

worldwide pandemic. New risks have also developed due 

to the conditions surrounding the pandemic. Specific 

examples of macroeconomic risk include:

Interest Rates: Direct Loan Program cost estimates are 

very sensitive to changes in interest rates. Under the 

current program terms, the fixed borrower rates for 

direct loans are established in advance of the upcoming 

school year, while the Treasury fixed interest rate on the 

Department’s borrowings to fund those loans is not set 

until after those awards are fully disbursed, which can 

be as much as 18 months later. Unexpected changes in 

interest rates during this time can significantly impact 

Direct Loan Program cost.

Unemployment: Unemployment rates have been shown 

to affect both student loan volume and student loan 

repayment decisions and behavior. During periods of 

economic downturn, displaced workers have tended to 

pursue higher education opportunities in high numbers 

to strengthen their credentials, change career paths, or 

improve future employment opportunities. While the 

COVID-19 pandemic has been accompanied by a spike 

in unemployment (at least in the short term), the impact 

on student loan volume has been more mixed, as higher 

education has struggled to provide students the level of 

instruction they were receiving prepandemic. The exact 

impact on the cost estimates from the current recession 

remains a significant area of uncertainty. For instance, 

higher short-term unemployment rates could have an 

impact on future collections of already defaulted loans 

by increasing the risk of fewer collections from wage 

garnishment and tax refund reductions. A sensitivity 

analysis examining the impact of a 5 percent reduction in 

default collections, limited to cohorts 2016–20, resulted in 

a projected increase in the re-estimate of $2.4 billion.

Wage Growth: The estimated costs of IDR plans are 

largely dependent on trends in observed wage growth. To 

the extent that future wage growth deviates significantly 

from prior wage growth, actual costs of IDR plans may 

deviate from estimated costs. The Department will closely 

monitor impacts to wage growth because of the pandemic. 

Data is not available for the FY 2021 financial statements, 

and the ultimate cost may not be known for some time. 

The estimates are sensitive to slight changes in model 
38 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

assumptions. The Department continues to manage risks in 

this area by building its knowledge about its borrower base 

and remaining informed of labor market statistics.

Operational Risk

Unforeseen issues in administering and servicing student 

loans may impact the cost estimates. For example, in 

December 2019, the President signed the Fostering 

Undergraduate Talent by Unlocking Resources for Education 

Act (FUTURE Act), which amends Section 6103 of the 

Internal Revenue Code to allow the IRS to share taxpayer 

data directly with the Department. Once implemented, this 

will make it easier for borrowers to stay enrolled in an IDR 

plan by allowing automated data sharing between federal 

agencies and eliminating the need for borrowers to annually 

recertify their income. A time line for implementation of 

the FUTURE Act is uncertain, which can make predicting 

the impact on student loan cost estimates a challenge. 

Similarly, the Department is working to implement 

the FAFSA Simplification Act, which makes significant 

changes to the need analysis formula that will also 

introduce operational challenges. The Department invests 

significant resources to ensure continuous improvements 

in cybersecurity defenses based on current and emerging 

threats. Despite this investment, security threats to 

operations are ongoing and incidents may happen without 

warning, potentially disrupting student loan administration 

and ultimately borrower cash flows, which can be impacted 

by the timing of when collections or disbursements are 

processed. Hence, there is an inherent risk that future, 

unpredictable disruptions in the administrative status quo 

may impact student loan cost estimates.

On September 30, 2021, the Department was awarded 

$20 million from the Technology Modernization Fund 

board. The Department will use the money to implement 

a Zero Trust architecture to improve the protections of 

student data it manages. By improving and modernizing 

cybersecurity technologies the Department will provide 

more secure and less burdensome user experiences both for 

employees and the public. 

Another potentially unforeseen issue that may impact cost 

estimates is when federal loan servicers or private collection 

agencies exit the student loan servicing program, as several 

have over the last year. The Department remains committed 

to ensuring that borrowers receive high-quality service that 

helps them access the benefits granted by law.

NEXT GEN FSA

About FSA

As the nation’s largest provider of financial aid for 

education beyond high school, FSA delivers more than 

$112 billion in aid each year to students and their families. 

Through programs authorized under the Higher Education 

Act of 1965, as amended, FSA provides grants, loans, 

and work-study funds for college or career school. FSA 

also oversees the approximately 5,600 postsecondary 

institutions that participate in the federal student aid 

programs. In every interaction with students and their 

families, FSA strives to be the most trusted and reliable 

source of student financial aid information and services in 

the nation.

The Vision

FSA manages one of the largest consumer loan portfolios 

in the country, valued at $1.6 trillion. It is critical that 

the Department provides an environment that provides 

customers with the services and experiences that they 

expect and the outcomes that they deserve. The Next Gen 

FSA initiative is enabling FSA to realize this vision by 

modernizing the way connections are made with customers 

and streamlining the student aid systems and processes. This 

broad effort will deliver an improved customer experience 

for millions of Americans across the entire student aid life 

cycle, from fostering greater awareness about the availability 

of financial aid, to applying for aid, to repaying loans, to 

improving the participation experiences and oversight of 

FSA partners at postsecondary institutions.

Legacy Environment

In the current federal financial aid process, students 

and families must navigate a complex and fragmented 

landscape, interacting with multiple systems, vendors, 

processes, and interfaces across a multitude of brands 

and user experiences. Too often, this poor customer 

experience creates confusion, resulting in borrowers 

failing to understand how to apply for and maintain 

their aid eligibility, which repayment options they qualify 

for, and the financial implications of their student debt. 

Additionally, operational complexities and out-of-date 

contracts result in higher administrative costs and hinder 

effective oversight of the Department’s vendors. 
FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 39

MANAGEMENT’S DISCUSSION AND ANALYSIS

Next Gen FSA Environment

Multiple websites, mobile applications, contact centers, 

and other customer interfaces have been combined into a 

simplified, consistent, and engaging customer experience, 

which will be enhanced by standardized training and 

tools. Since December 2019, FSA has launched a single 

front door on the web, Studentaid.gov, and has launched 

multiple modern self-service and consumer information 

tools that help customers understand the aid they have 

received, their remaining eligibility, and how they can 

manage loan repayment in a way that meets their goals. 

Some of these Digital and Customer Care (DCC) 

tools include the Federal Student Aid Estimator, Loan 

Simulator, and Public Service Loan Forgiveness Help Tool. 

In FY 2022 Next Gen DCC will continue to create and 

enhance tools and products for customers on StudentAid.

gov and the myStudentAid mobile app. For example, in 

FY 2022, FSA plans to launch Medallia, a new customer 

feedback tool, while also making improvements to 

other tools, like the PSLF Help Tool and the Incomedriven repayment plan application—which will allow 

for borrowers to move more quickly through the process 

when they cannot match with the IRS for providing 

income information. While not as eye-catching, FSA 

is working on technical integrations and cybersecurity 

updates that will be less visible to customers, but are 

significant improvements nonetheless. DCC’s integration 

with the new NSLDS will allow the Department to be 

more flexible in what data is shown to customers, and 

multifactor authentication will keep bad actors from 

breaching the site. 

While FSA’s digital platform helps customers cut through 

the information clutter and access robust self-service, other 

components of Next Gen will bring onboard multiple 

contact centers that provide customers and partners with 

support across the entire student aid lifecycle, all under the 

FSA brand. 

In early FY 2022, FSA will launch the Business Process 

Operations (BPO) initiative. BPO is the personnel 

component of the Next Gen FSA’s vision. BPO vendors 

will provide customers and partners across all FSA 

programs and operations with support via contact centers 

and manual processing. Contact center work includes, but 

is not limited to, providing general assistance to students, 

parents, and borrowers as they navigate processes to 

learn about, apply for, receive, and repay federal student 

aid. BPO’s will manage key back-office activities that 

encompass the full lifecycle of federal student financing 

in a manner consistent with leading financial services 

providers and other industry leaders recognized for highquality customer service. While managing customer and 

partner relations, FSA’s BPO’s will:

• Deliver an efficient and effective customer and 

partner experience.

• Improve customer outcomes. 

• Ensure compliance with consumer 

protections standards.

• Establish greater operational flexibility. 

• Reduce operational complexity. 

Next Gen remains deeply committed to improving 

the FSA experience for partners. In March 2021, FSA 

launched the FSA Partner Connect website, fsapartners.

ed.gov. Before the launch, FSA’s partners used several 

different systems to access tools and resources to support 

students during their educational journey. This new 

interface consolidates the tools that partners use regularly 

onto a single digital platform that streamlines operational 

information by award year, provides notifications related 

to a partner’s specific school activities, tracks scheduled 

system outages, and more. FSA Partner Connect also 

reduces the administrative burden on financial aid 

professionals at more than 5,600 postsecondary schools 

around the globe, allowing them more time to serve 

students. In FY 2022, FSA will continue to develop 

and enhance the tools and systems used by partners and 

financial aid professionals.

The contracts that bring onboard these new tools, systems, 

and platforms include objective performance standards and 

accountability measures to ensure customers receive accurate, 

timely responses to their inquiries. These new technologies 

will also integrate modern cybersecurity protections, and 

a new enterprise wide data analytics platform will drive 

improved data and governance standards.

Solicitation and Procurement Process

FSA is strategically planning its future solicitation strategy, 

with the priority being to ensure that its customers and 

partners have stable, reliable, and accountable solutions 

that meet their needs.

As the Next Gen vision evolves, FSA will ensure that the 

appropriate contractual actions will be taken to maintain 

or improve servicing capabilities. FSA aims to modernize 
40 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

all back-end systems and infrastructure to pave the 

way for improved loan processing and management of 

customer accounts.

As FSA develops long-term plans for federal loan 

servicing, the goal will be to improve accountability, 

enhance service for at-risk borrowers, and establish 

performance benchmarks.

LEVERAGING DATA AS A STRATEGIC ASSET

The Department continues to focus on leveraging its data 

as a strategic asset by further implementing requirements 

in the Foundations for Evidence-Based Policymaking Act 

(Evidence Act; P.L. 115-435) and the Federal Data 

Strategy. Throughout the COVID-19 pandemic, 

the Department continued its efforts to strengthen 

data governance while overseeing the unprecedented 

investment in students and schools. This section highlights 

five areas guiding the Department towards realizing the 

power of data in daily operations and national policy: (1) 

the ED Data Strategy; (2) Open Data; (3) the Education 

Stabilization Fund Transparency Portal; (4) Data Quality; 

and (5) the ED Learning Agenda.

The Department’s Data Strategy

The FY 2020 Action Plan for the Federal Data Strategy 

called for agencies to “put in place a data strategy or 

road map,” and in December 2020, the Department 

subsequently completed and published its inaugural 

Data Strategy. The Department’s Data Governance 

Board (DGB) guided the development of four goals—to 

strengthen agencywide data governance; build human 

capacity to leverage data; advance the strategic use of data; 

and to improve data access, transparency, and privacy. The 

Department’s Data Strategy provides a road map for the 

agency to improve education outcomes and lead the nation 

through evidence-based policy and data-driven decisions. 

The Office of the Chief Data Officer led agencywide 

working groups composed of representatives of each 

principal office to develop objectives and action plans for 

implementation throughout FY 2021 and FY 2022. Key 

Data Strategy implementation efforts include integrating 

existing data governance initiatives into agencywide efforts, 

the implementation of agencywide data governance policies 

for program office data life cycle and data management 

functions, launching an agencywide data literacy program, 

and establishing data quality guidelines.

Open Data

The Evidence Act requires agencies to make data “open by 

default,” and the Department is planning to develop, release, 

and execute the Act’s required open data plan consistent 

with OMB guidance. The Department will balance privacy 

and security with the open data mandate while prioritizing 

a broader public use of data paid for by its citizens. The 

Department’s Open Data Platform (ODP) (https://data.

ed.gov/)was publicly launched December 2020, with an 

initial population of public data profiles. A central repository 

for data assets, ODP is a fully featured, robust, and highly 

scalable data repository that maintains all data assets in a 

fully searchable catalog. As required by the Evidence Act 

and guided by Data Strategy Goal 4, the Department will 

build towards a comprehensive data inventory by expanding 

on the ODP; increasing its catalogued data assets for both 

externally available open data and internal sources subject 

to open data priorities, reviewing all data assets for release, 

and expanding the number of Department open data assets 

listed in in the Federal Data Catalog. The ODP improves 

the Department’s ability to grow and operationalize its 

comprehensive data inventory while progressing on open 

data requirements. The Department is at the forefront of 

federal agencies in realizing the requirements of the Open, 

Public, Electronic and Necessary Government Data Act (OPEN 

Government Data Act) (Title II of the Evidence Act) and the 

ODP is yet another way the Department is seeking to make 

data open by default.

Education Stabilization Fund Public 

Transparency Portal

The ESF Transparency Portal, located at covid-reliefdata.ed.gov, is the Department’s website dedicated 

to collecting and disseminating data and information 

about the ESF programs managed by the Department 

and authorized through the Coronavirus Aid, Relief, and 

Economic Security Act (CARES Act), Coronavirus Response 

and Relief Supplemental Appropriations Act (CRRSAA), 

and the American Rescue Plan Act of 2021 (ARP). The 

ESF Portal empowers decision-makers, parents, students, 

teachers, education leaders, and taxpayers with information 

about ESF programs and discloses how states, districts, and 

institutions of higher education (IHE) spent COVID-19 

relief funds. The funding data is from public data sources 

and reflects data collected by the Department and data 

released or shared by other federal agencies, including the 

General Services Administration, and the Department of 

the Treasury. The Portal enables state and IHE grantees to 

submit annual performance reports on funding authorized 

through the HEERF, ESSER, and GEER funds, providing 
FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION 41

MANAGEMENT’S DISCUSSION AND ANALYSIS

the public and decision-makers fuller insight into the 

expenditures and usage of ESF program funds. The Portal 

currently displays the CARES Act Annual Performance 

Report 2020 data by grantee and includes downloadable 

data files for decision-makers and the public detailing 

how ESF funds were spent on allowable activities such as 

distance-learning, ensuring student health and safety, and 

emergency aid to college students. An exemplar of open, 

transparent data, the Portal is responsive to the mandate in 

the OPEN Government Data Act (Title II of the Evidence 

Act) to make public data open and accessible.  

Data Quality

The Department’s program offices have historically had 

varying levels of data quality control among its datasets. 

The Evidence Act calls for agencies to make greater use of 

administrative and program data, but there are limitations 

on enforcing remission of complete and accurate data 

from grantees. Current control processes address data 

quality only at the point when data are submitted, and, 

commencing initially in FY 2020, the Department identified 

a multipronged approach to address root causes and 

improve data quality. The ED Data Strategy Objective 1.5 

calls for the Department to “Implement a cohesive data 

quality approach for the agency, leveraging best practices, 

technical assistance, and controls.” Efforts include ensuring 

grantees are aware of their data responsibilities under the 

conditions of their grants and of the credible consequences 

for noncompliance, ranging from additional informal 

monitoring through termination of the grant. It also includes 

provisions to improve the varying capacity of grantees in 

reporting data and varying capacity among Department staff 

in reviewing grantee-reported data. When fully deployed, 

this is expected to take the form of technical assistance to 

grantees, additional resources for the Department for data 

quality review, and expanded use of technological solutions 

to automate and reduce for manual reporting and review.

In late FY 2020, exigent circumstances, volume of new 

grant funds, and other challenging environmental factors 

led the Department to immediately deploy a variation 

of this strategy for key data collections associated with 

the ESF—specifically, the HEERF, GEER, ESSER, and 

equivalent Outlying Area funds. The Department executed 

a contract to develop a data collection portal, implement a 

data management solution to support internal and external 

reporting, and launch a public transparency website. 

In addition to early communications to grantees about 

expectations for data quality, several components of the data 

collection process include explicit data quality components. 

This includes auto-population of known data values in 

the collection instrument; help desk services for grantees 

submitting performance data; a data management platform 

that imposes business rules to improve data quality; and 

established phases for opening, closing, and reopening the 

tool for grantees to submit data quality corrections. 

Throughout FY 2021, the Department continued to 

work on developing data quality controls for each stage of 

the data lifecycle, including mechanisms for evaluating, 

preventing, and remediating data irregularities to assure 

higher quality data for the agency to use in meeting its 

mission and strategic objectives. Future efforts coordinated 

through the ED Data Strategy include the development 

of a data quality playbook to clarify data quality roles 

and responsibilities and build staff capacity to understand 

and address quality issues. The playbook will address how 

to help grantees assess and improve data quality before 

submission, propose meaningful incentives for data 

submitters, strengthen communication strategies, and 

propose ways to reduce the burden on both Department 

staff and grantees.

The Department’s Learning Agenda 

The Department’s FY 2022–FY 2026 Learning Agenda 

will be published in February 2022, in conjunction 

with the release of the FY 2023 President’s Budget. The 

Learning Agenda is aligned to the Department’s Strategic 

Plan, reflecting the secretary’s goals and objectives for 

the Department over the next four years. The Learning 

Agenda is complemented by an Annual Evaluation Plan. 

The Annual Evaluation Plan includes a listing of the 

Department’s most significant evaluation activities in a 

given fiscal year. All Evidence Act deliverables are located at 

https://www.ed.gov/data.

The Learning Agenda was developed in consultation with the 

Department’s Evidence Leadership Group (ELG). The ELG 

is co-chaired by the Department’s evaluation officer (EO) and 

the director of the Department’s Grants Policy Office (GPO) 

and includes members from the Department’s primary 

grantmaking offices as well as mission-support units, such 

as the Department’s Budget Service, and Office of General 

Counsel, and ex-officio representatives from the Office 

of the Chief Data Officer, the Statistical Official, and the 

Performance Improvement Officer. Feedback from OMB and 

consultation with stakeholders across government, education, 

and the public, was also used to inform the Department’s 

Learning Agenda. 
42 FY 2021 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

In addition to advising the EO on the development of the 

Learning Agenda, the ELG advises Department leaders on 

how to support the capacity of Department staff to make 

better use of data and evidence. GPO, led by the ELG cochair, continues to spearhead a range of internal training 

opportunities for Department staff to bolster the use of the 

secretary’s policy priorities, including the use of evidence 

in program design, and to consider how the Department’s 

grantmaking activities can build evidence for improvement 

in the future.

CONTINUOUS IMPROVEMENT

Improving critical infrastructure, systems and overall 

capacity, and ensuring sound strategic decision-making 

regarding allocation of resources are essential to the 

Department’s future progress and success. Implementing 

Technology Business Management Solutions (TMBS) is 

one of the Department’s key initiatives.

Technology Business Management Solutions 

The purpose of the TBMS project is to provide greater cost 

transparency into IT spending. The TBMS allows OCIO 

to communicate the cost drivers for, and the value of, IT to 

senior leadership, improve the efficiency and predictability 

of the formulation of the IT budget, and optimize IT costs. 

Beginning in 2017, OMB required agencies to begin 

reporting IT spending in alignment with the TBMS 

framework, including using cost pools and IT towers 

to classify IT spending. The Department has started to 

leverage TBMS beyond the minimum OMB reporting 

requirements to encompass the full implementation of 

the TBMS cost accounting framework. The Department 

of Education is refining the TBMS effort to: 1) provide 

accurate cost analysis and accounting of operations and 

services to improve tracking cost variances, 2) provide 

ad hoc reports to stakeholders on IT spending, and 3) 

contextualize the Department’s internal resource costs with 

real-world data to inform decisions. The goal is to provide 

a “bill of IT” to form the basis of a show-back model to 

drive more informed decision-making around IT. 

The objective is to implement an integrated solution that 

will allow OCIO to:

• Accurately account for and categorize IT spending in 

cost pools and IT towers.

• Evaluate IT spending using a method that helps 

identify redundant IT assets (e.g. systems, applications, 

and licenses).

• Extract cost elements from disparate sources, analyze 

these elements, and report cost stressors and trends to 

stakeholders. 

• Prepare accurate pricing through a show-back model to 

client offices for the services provided and consumed 

by each client office.