Department of Education

STUDENT AID ADMINISTRATION

Fiscal Year 2018 Budget Request

CONTENTS

Page

Appropriations Language ........................................................................................................Y-1

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

Amounts Available for Obligation ............................................................................................Y-3

Obligations by Object Classification ........................................................................................Y-4

Summary of Changes .............................................................................................................Y-5

Authorizing Legislation............................................................................................................Y-7

Appropriations History.............................................................................................................Y-8

Significant Items in FY 2017 Appropriations Reports.............................................................Y-10

Summary of Request ............................................................................................................Y-15

Activity

Student Aid Administration ...........................................................................................Y-16

Organization Chart................................................................................................................Y-54
STUDENT AID ADMINISTRATION

Y-1

Ap propriation s Langu ag e

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

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

VII of the Public Health Service Act, $1,697,711,000, to remain available until September 30,

2019.

1

NOTES

A full-year 2017 appropriation for this account was not enacted at the time the budget was prepared; therefore, 

the budget assumes this account is operating under the Further Continuing Appropriations Act, 2017 (P.L.114-254). 

The amounts included for 2017 reflect the annualized level provided by the continuing resolution. 

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

Provisions and Changes document, which follows the appropriation language.
STUDENT AID ADMINISTRATION

Y-2

Analysis of Language Provisions and Changes

Language Provision Explanation

1 ... to remain available until September 30, 

2019.

This language provides for appropriated funds 

to remain available for 2 years.
STUDENT AID ADMINISTRATION

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Amounts Available for Obligation

(dollars in thousands)

Appropriation and Adjustments 2016

2017 

Annualized CR 2018

Discretionary appropriation:

Discretionar y – Appropriation ......................................... $1,551,854 $1,551,854 $1,697,711

Discretionar y - Across-the-board reduction 

(P.L. 114-254) .................................. 0 -2,950 0

Subtotal, appropriation ..................... 0 1,548,904 0

Unobligated balance, start of year................ 1,978 2,430 0

Recovery of prior-year obligations................. 23,521 0 0

Unobligated balance expiring....................... -1,969 0 0

Unobligated balance, end of year................. -2,430 0 0

Subtotal, adjusted discretionary 

appropriation .................................... 1,572,954 1,551,334 1,697,711
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Obligations by Object Classification

(dollars in thousands)

Object Class # Object Class 2016

2017

Ann. CR 2018

Change 

from 2017 

to 2018

11.10 Full-time permanent $156,622 $172,830 $171,093 $-1,737

11.31 Full-time temporary 711 0 0 0

11.32 Part-time 1,191 0 0 0

11.33 Consultants 22 0 0 0

11.51 Overtime 78 47 35 -12

11.52 Awards 1,874 2,001 2,051 50

11.80 Other Compensation 95 0 0 0

Subtotal, Personnel Comp. 160,593 174,878 173,179 -1,699

12.00 Benefits

 

50,068 54,436 54,183 -253

Subtotal, Per. Comp & Ben. 210,661 229,314 227,362 -1,952

21.00 Travel 2,068 1,202 1,202 0

22.00 Transportation of things 0 0 0 0

23.10 Rental payments to GSA 19,216 19,564 19,737 173

23.31 Communications 0 0 0 0

23.32 Postage/fees 355 52 52 0

Subtotal, 23 19,571 19,616 19,789 173

24.00 Printing and reproduction 1,349 62 3 -59

25.10 Advisory and assistance services 5,673 0 1,504 1,504

25.21 Other services 941,033 942,094 1,066,783 124,689

25.22 Training/Tuition/Contracts 1,174 1,670 1,504 -166

25.30 Goods/Services from Gov’t 31,313 31,763 30,212 -1,551

25.40 Operations/Maint of Facilities 153 0 0 0

25.70 Operations/Maint of Equipment 0 0 0 0

25.72 IT Services/Contracts 359,388 325,307 349,036 23,729

Subtotal, 25 1,338,734 1,300,834 1,449,039 148,205

26.00 Supplies 245 163 165 2

31.10 IT Equipment/Software 195 143 151 8

31.30 Other Equipment 2 0 0 0

Subtotal, 31 197 143 151 8

32.00 Building Alterations 106 0 0 0

43.10 Prompt payment interest 23 0 0 0

Total, Obligations 1,572,954 1,551,334 1,697,711 146,377
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Summary of Changes

(dollars in thousands)

2017 Annualized CR......................................................................... $1,548,904

2018 ................................................................................................. 1,697,711

Net change................................................................ +148,807

Increases:

2017

Annualized CR

Change from 

Annualized CR

Built-in: Built

Increase in rent. 19,564 +173

Program:

Increase in loan servicing activities due to 

increase in loan volume; shifts of existing 

borrowers from in-school to more 

expensive, in-repayment, statuses; and 

improvements to loan servicing that will be 

implemented as part of the recompete. 880,442 +136,558

Increase in contracted IT services for IT 

security. 24,205 +13,835

Increase in contracted IT services to

upgrade to the Department’s core financial 

system. 13,796 +7,977

Increase in advisory and assistance 

services. 0 +1,504

Increase in awards. 2,001 +50

 Increase in technology equipment/software. 143 +8

 Increase in supplies. 163 +2

Subtotal, increases +160,107
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Summary of Changes—Continued

(dollars in thousands)

Decreases:

2017

Annualized CR

Change from

Annualized CR

Built-in:

Decrease in salaries and benefits, primarily 

for a decrease in FTE; however a

1.9 percent Governmentwide pay raise and 

increased benefits are also included. $227,266 -$1,990

Program:

Decrease in net costs for Federal Student 

Aid’s contracts to support core operations 

needed for student loan application 

processing; origination and disbursement 

functions; and IT system hosting. 259,488 -7,522

Decrease in goods/services from 

government. 31,763 -1,551

Decrease in training. 1,670 -166

Decrease in printing. 62 -59

Decrease in overtime. 47 -12

Subtotal, decreases -11,300

Net change +148,807
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Y-7

Authorizing Legislation

(dollars in thousands)

Activity

2017

Authorized

2017

Annualized CR

2018

Authorized

2018

Request

Student aid administration (Higher Education Act 

of 1965, I-D and IV-D, section 458; Public 

Health Service Act, VII-A) 01 $1,548,904 To be determined2 $1,697,711

Total appropriation 1,548,904 1,697,711

Portion of request not authorized 1,697,711

1 The program was authorized in 2017 through appropriation language. 2 The GEPA extension expired September 30, 2015; reauthorizing legislation is sought for fiscal year 2018.
STUDENT AID ADMINISTRATION

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Appropriations History

(dollars in thousands)

Year

Budget 

Estimate 

to Congress 

House 

Allowance Foot

note

Senate 

Allowance Foot

note AppropriationFootnote

2009 764,000 714,0001 704,8431 753,402

Recovery Act Supplemental 

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

2010 870,402 870,402 870,4022 870,402

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

2011 1,170,231 994,6003 1,048,0782 992,0124

2012 1,095,418 992,0125 1,045,3635 1,043,387

2013 1,126,363 1,043,3876 1,126,3636 978,9247

2014 1,050,0918 N/A9 1,044,3013 1,166,00010

2015 1,446,92411 N/A12 1,446,924 13 1,396,924

2016 1,581,85411 1,446,92414 1,361,70014 1,551,854

 1 The levels for the House and Senate allowances reflect action on the regular annual 2009 

appropriations bill, which proceeded in the 110th Congress only through the House Subcommittee and 

the Senate Committee.

2 The levels for the Senate allowance reflect Committee action only.

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

4 The level for appropriation reflects the Department of Defense and Full-Year Continuing Appropriations 

Act, 2011 (P.L. 112-10). 5 The level for the House allowance reflects an introduced bill; the level for the Senate allowance reflects 

Senate Committee action only.

6 The levels for the House and Senate allowance reflect action on the regular annual 2013 appropriation 

bill, which proceeded in the 112th Congress only through the House Subcommittee and the Senate 

Committee.

7 Total transfer $9,888 thousand to Program Administration, Office for Civil Rights and Office of Inspector 

General.

8 Excludes $2,807 thousand proposed for transfer from Department of Health and Human Services to 

Department of Education for the Health Education Assistance Loan program. 9 The House allowance is shown as N/A because there was no Subcommittee action.

10 Excludes $996 thousand transferred from Department of Health and Human Services to Department of 

Education for the Health Education Assistance Loan program. 11 The Bipartisan Budget Act of 2013 eliminated mandatory funding for the Not-for-Profit (NFP) servicing 

costs, which were previously not reflected in this table. Starting in fiscal year 2015, the estimate reflects 

total cost to service loans, discretionary funding and what was previously considered mandatory funding. 12 The House allowance is shown as N/A because there was no Subcommittee action.

13 The level for the Senate allowance reflects Senate Subcommittee action only. 14 The levels for House and Senate allowances reflect action on the annual 2016 appropriations bill, 

which proceeded in the 114th Congress only through the House Committee and Senate Committee.
STUDENT AID ADMINISTRATION

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Year

Budget 

Estimate 

to Congress 

House 

Allowance Foot

note

Senate 

Allowance Foot

note AppropriationFootnote

2017 1,631,9901 1,551,8542 1,546,8542 1,576,8542

2018 1,697,7111

 

1 The Bipartisan Budget Act of 2013 eliminated mandatory funding for the Not-for-Profit (NFP) servicing 

costs, which were previously not reflected in this table. Starting in fiscal year 2015, the estimate reflects 

total cost to service loans, discretionary funding and what was previously considered mandatory funding.

2 The levels for the House and Senate allowances reflect Committee action on the regular annual 2017 

appropriations bill; the Appropriation reflects the Consolidated Appropriations Act, 2017.
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Significant Items in FY 2017 Appropriations Reports

SAA Obligation Plan Discretionary Funds

Senate The Committee directs the Department to continue to provide quarterly reports 

detailing its obligation plan by quarter for student aid administrative activities 

broken out by servicer and activity. 

Response The Department will continue to provide the requested quarterly reports on 

administrative obligations.

Student Loan Servicing

Senate The Committee directs the Department to ensure that the new student loan 

servicing contract includes the participation of multiple student loan servicers, 

each responsible for all aspects of servicing loans, which would allow the 

Department to allocate loans to different servicers based on performance. 

The Committee strongly believes this will promote competition and increase 

incentives for such entities to provide high-quality service to student 

borrowers. The Department should brief the Committee on Appropriations of 

the House of Representatives and the Senate, the Senate Committee on 

Health, Education, Labor and Pensions, and the House Committee on 

Education and the Workforce no less than 15 days prior to releasing a final 

request for proposals for a new student loan servicing contract. Until a new 

student loan servicing contract is implemented, the Committee directs the 

Department to continue to allocate new student loan accounts to servicers 

based on performance compared against all servicers, utilizing common 

metrics established by the Department. The Committee appreciates recent 

efforts to work with servicers to develop these common metrics. However, the 

Committee remains concerned about the quality of servicing being provided to 

borrowers and servicers’ compliance with the law, and expects the 

Department to adhere to congressional directive to produce a common 

policies and procedures manual that applies to all Direct Loan servicers and 

provides voluntary best practices intended to improve the consistency of 

servicing for student loan borrowers. 

Response The Department appreciates the Committee’s interest and is pursuing an 

acquisition approach for Federal student loan servicing that it believes best 

balances high-quality service for borrowers and value for 

taxpayers. Information on this procurement is available on the Federal 

Business Opportunities website at:
STUDENT AID ADMINISTRATION

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https://www.fbo.gov/index?s=opportunity&mode=form&id=f11c5bdc44011775

8eb5af33bb4f9af2&tab=core&_cview=1 

Given the sensitivity regarding this ongoing procurement, at this time the 

Department is unable to share additional information beyond what is posted.

Federal Student Aid Enforcement Office

Senate The Committee directs the Secretary to ensure that the work of this unit is 

transparent, and not duplicative of other work being done at the Department. 

The Committee directs the Department to brief the Committees on the 

Appropriations of the House of Representatives and the Senate, the Senate 

Health, Education, Labor, and Pensions Committee, and House Education 

and Workforce Committee within 30 days of enactment on the current and 

planned actions of this new office. Further, the Secretary shall ensure that the 

Chief Operating Officers reports on the operations of the enforcement unit as 

part of the required reports under section 141 of the HEA, including how 

information shared internally within FSA and between relevant agencies.

Response The Department shares your commitment to ensuring that student borrowers 

and taxpayers are protected and agrees that duplicative compliance efforts

should be avoided. While the Department would be pleased to provide 

information about the actions taken by the Enforcement Office as you 

requested, providing information about adverse actions considered but not 

taken against particular institutions of higher education could jeopardize 

current and prospective enforcement actions. The Department is also pleased 

to provide further information about how information is shared internally within 

FSA and among relevant agencies.

Interagency Task Force on For Profit Colleges

Senate The Committee directs the Department to brief the Committees on 

Appropriations of the House of Representatives and the Senate, the Senate 

Health Education, Labor, and Pensions Committee, and House Education and 

Workforce Committee within 30 days of enactment on the current and planned 

actions of the taskforce, and how it works with and shares information with 

other Federal and State agencies.

Response The Department is re-considering the decision to maintain a task force that 

focuses on for-profit colleges and universities. If the decision is made to 

continue with this task force, the committees listed will be briefed regarding 

the frequency of meetings, contact information, and topics of discussion.
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Third Party Servicers

House The Committee is concerned that the Department has not provided adequate 

information to student loan counseling and default management providers 

impacted by new third-party servicer requirements. Last year, the Department 

released a Dear Colleague Letter (Gen-15-01) expanding the definition of 

‘third-party servicer’ and the reporting requirements for those institutions and 

providers that manage parts of the financial aid system and provide 

specialized support services to students. To date, the Department has not 

issued any guidance, such as an audit guide, that would explain who is a 

third-party servicer and what is expected of them. The Committee directs the 

Department to develop and submit to the Committee a plan for how it intends 

to implement the third-party servicer requirements, including who is a thirdparty service provider, how the regulations will seek to minimize compliance 

costs, and how the regulations will refrain from creating unnecessary barriers 

to helping student and parent borrowers.

Response The guidance issued by Federal Student Aid is consistent with the regulations. 

The purpose of GEN 15-01 was to clarify the existing regulations. A thirdparty servicer is defined as, “An individual or a State, or a private, profit or 

nonprofit organization that enters into a contract with an eligible institution to 

administer, through either manual or automated processing, any aspect of the 

institution’s participation in any Title IV, HEA program.” While the definition 

goes on to outline a number of functions that the Department considers as 

administration of an aspect of the institution’s participation in the Title IV 

programs, the regulation clearly indicates that the list is not exhaustive and 

does not exclude functions or services (such as counseling, delinquency, and 

default aversion) implemented by an institution to lower or maintain loan 

cohort default rates or other functions or services necessary to ensure 

compliance with the Higher Education Act. See 34 C.F.R. § 668.2(b).

Institutions are required to notify the Department within 10 days of the date it 

enters into, modifies, or terminates a contract with a servicer to administer any 

aspect of its participation in the Title IV programs. If an entity or individual 

performs a Title IV service or function that is necessary for the institution to 

remain eligible to participate in the Title IV programs, to determine a student’s

Title IV eligibility, to account for Title IV funds, to deliver Title IV funds to 

students, or to perform any other aspect of the administration of the Title IV 

programs, the entity is considered a third-party servicer and the institution is 

required to notify the Department that the institution has entered into a 

contract with that entity.

The Department determined through data analysis, research, program 

reviews, and audits that a significant number of higher education institutions 
STUDENT AID ADMINISTRATION

Y-13

failed to report, update, and/or incorrectly reported third party servicer 

information on its E-App and that contracts with third-party service providers 

did not include required regulatory language and/or safeguards for protecting 

student information.

The purpose of GEN 15-01 was to remind institutions of their responsibilities 

as they pertain to outsourcing any aspect of the administration of the Title IV 

programs. The list of Title IV activities outlined in GEN 15-01 included those 

functions or services that are frequently performed by third-party service 

providers. In making a determination as to whether or not an entity or 

individual is considered a third-party servicer, the Department looks at each 

contract individually and focuses on the services or functions that are being 

performed at an institution as opposed to a title that the entity may be using or 

a generic description of the types of services provided by the service 

provider. In a number of instances, the Department determined that online 

providers are performing Title IV functions from remote locations on behalf of 

one or more institutions and/or are responsible for maintaining all, or some, of 

an institution’s Title IV records.

An institution’s continued participation in the Title IV programs is contingent 

on, among other things, its compliance with the standards of administrative 

capability (34 C.F.R. § 668.16). One of these standards requires institutions 

to maintain loan cohort default rates below specified thresholds (34 C.F.R. § 

668.16(m)). In addition, institutions that are over these thresholds for one 

year must develop and implement a default reduction plan (34 C.F.R. § 

668.217). Consequently, part of an institution’s administration of the Title IV 

programs includes default prevention and reduction and any individual or 

entity that contracts with an institution to perform default prevention or 

aversion activities on behalf of the institution is considered a third party 

servicer. An institution’s continued participation is also contingent upon 

providing adequate financial aid counseling to eligible students who apply for 

Title IV program assistance (34 C.F.R. § 668.16(h)). Any entity that contracts 

with an institution to provide financial aid counseling (such as call centers, live 

chat, instant messaging, etc.) is considered a third-party servicer. Regulations 

also require institutions to perform entrance and exit loan counseling for all 

borrowers participating under the Federal Loan programs, see (34 C.F.R. § 

685.304). Any entity that contracts with an institution to conduct or provide 

entrance and/or exit loan counseling (face to face or online) is considered a 

third-party servicer.

The Department supports adding default management services to the OIG 

audit guide on the next revision.
STUDENT AID ADMINISTRATION

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Nonprofit Organizations

House With respect to the upcoming procurement for servicing of student loans 

owned by the Department, the Committee directs the Department to develop 

and submit to the Committees on Appropriations of the House of 

Representatives and the Senate a plan under which it will give credit for 

subcontracting with small business, including State-based nonprofit 

organizations with expertise in assisting borrowers in the repayment of their 

student loans that provide value-added services but do not meet the formal 

definition of a “small business” because they are State or nonprofit entities.

Response The Department believes that it currently lacks the authority to comply with 

this directive. Congress previously defined a small business as one that is 

organized for profit, but subsequently altered the definition at 10 USC 2410d 

such that Department of Defense prime contractors were authorized to receive 

small business goal credit for subcontracts awarded to qualified nonprofit 

agencies for the blind and other severely disabled. The Department believes

that similar legislation would be required to authorize the Department of 

Education to “give credit for subcontracting with small business, including 

State-based nonprofit organizations with expertise in assisting borrowers in 

the repayment of their student loans that provide value-added services but do 

not meet the formal definition of a “small business” because they are State or 

nonprofit entities.”
Y-15

Y-15

Click here for accessible version

Summary of Request
STUDENT AID ADMINISTRATION

Y-16

Activit y

STUDENT AID ADMINISTRATION

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

(dollars in thousands)

FY 2018 Authorization: To be determined1

Budget Authority:

Categories 2017

Annualized CR

2017

Appropriation 2018

Change from 

Annualized CR

Personnel costs $229,314 $229,314 $227,362 -$1,952

Non-personnel costs,

excluding loan servicing 

costs

439,148 467,098 453,349 +14,201

Subtotal, salaries and 

expenses

668,462 696,412 680,711 +12,249

Loan servicing costs 880,4422 880,4422 1,017,0003 +136,558

Total, student aid 

administration 1,548,904 1,576,854 1,697,711 +148,807

FTE 1,555 1,555 1,524 -31

 1

The GEPA extension expired September 30, 2015; reauthorizing legislation is sought for fiscal year 

2018. 

2 Includes servicing costs of $790,534 thousand for loan servicer contracts, $83,678 thousand for Debt 

Management Collection System (DMCS) servicing costs, $3,733 thousand for Department-held Perkins 

Loans servicing, $833 thousand for loan servicer development costs, $1,261 thousand for Health 

Education Assistance Loan (HEAL) program administration costs, and $403 thousand for loan servicer 

lockbox services.

3 Includes $857,673 thousand for loan servicer contracts, $100,445 thousand for DMCS servicing costs, 

$37,900 thousand for loan servicer development costs, $17,513 thousand for Department-held Perkins 

Loans servicing, $1,252 thousand for a customer satisfaction survey required for loan servicer volume 

allocation, $1,717 thousand for HEAL program administration costs, and $500 thousand for loan servicer 

lockbox services.
STUDENT AID ADMINISTRATION

Y-17

PROGRAM DESCRIPTION

Student Aid Administration (SAA) provides funds to administer the Federal student financial 

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

amended.

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

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

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

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

student loans; processing approximately 18.9 million student financial aid applications; 

disbursing nearly $153 billion in Direct Loans and $29 billion in Pell grants; administering a loan 

portfolio of approximately $1.3 trillion; and protecting students and taxpayers by ensuring that 

Federal resources are used appropriately.

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

Federal Government’s first performance-based organization to improve service for students, 

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

increase the accountability of the officials responsible for administering program operations; and 

to integrate the student aid processing and delivery systems.

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

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

student financial assistance programs and administers other Federal postsecondary education 

programs. In addition, other Department offices—Office of the Chief Financial Officer; Office of 

the Chief Information Officer; Office of the Deputy Secretary; Office of the General Counsel; 

Office of Management; and Office of Planning, Evaluation, and Policy Development—contribute 

to the policy formulation, administration and oversight of the student aid programs.

The Federal Pell Grant Program is the foundation of a low-or moderate-income student’s 

financial aid package. The program provides financial assistance to students attending 

postsecondary education programs disbursing, approximately $26.9 billion to 7.2 million low-and 

middle-income undergraduate students during the 2016–2017 award year, with an average 

award of $3,720. The maximum Pell Grant award has grown from $5,550 for the 2010–2011 

award year to $5,920 for the 2017–2018 award year.

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

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

participating schools. In FY 2018, the Department will originate $105 billion in new Direct 

Loans, excluding Consolidation Loans. See the Student Loans Overview and Student Aid 

Overview for details on Student Loan programs in the FY 2018 Budget. The Federal Family 

Education Loan (FFEL) Program is similar to the DL Program except private lenders provided 

those funds, which are insured by loan guaranty agencies and then reinsured by the 

Government. 

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

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

Y-18

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

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

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

portfolio. FSA services the government-held FFEL program loans and DL program loans 

through the use of private contractors. From passage of SAFRA through December 26, 2013, 

servicing activities were funded both by discretionary funds and mandatory funds as provided by 

SAFRA for eligible Not-For-Profit (NFP) servicers. However, the Bipartisan Budget Act of 2013 

eliminated mandatory funding for NFP servicing costs, instead requiring all servicing costs from 

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

Funding levels for the past 5 fiscal years were:

Fiscal Year (dollars in thousands)

footnote

2013.................................................................................. $978,024

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

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

2016................................................................................. 1,551,854

2017................................................................................. 1,576,854

FY 2018 BUDGET REQUEST

The Administration requests $1.7 billion to administer the Federal student aid programs in fiscal 

year (FY) 2018, a $148.8 million, or 10 percent, increase above the FY 2017 Annualized CR

level. A full-year 2017 appropriation was not enacted at the time of the FY 2018 Budget was 

prepared; therefore, the Budget is built off the Further Continuing Appropriations Act, 2017 (P.L. 

114-254). The amounts included for 2017 reflect the annualized level provided by the 

continuing resolution. The Department of Education Appropriations Act, 2017, provides 

$1,577 million, $25 million more than the FY 2016 level. The requested funds are necessary to 

manage and service the student loan portfolio, including: anticipated increases in loan volume; 

maintaining operations for student aid application processing, origination, disbursement 

functions, and student aid information technology (IT) system hosting; and enhancing security 

across applications.
STUDENT AID ADMINISTRATION

Y-19

Highlights of the FY 2018 request include: 

1) Loan servicing activities—Increase of $136.6 million.

These increased costs, reflecting more than 90 percent of the total requested SAA 

increase, are directly tied to expected increases in loan volume; shifts of existing 

borrowers from in-school to more expensive, in-repayment, statuses; and improvements to 

loan servicing that will be implemented as part of the recompete. More detail is provided 

on Y-20–21.

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

and disbursement functions, and IT system hosting—Decrease of $7.9 million.

These costs are necessary for maintaining core operations of the student aid life cycle. . 

More detail is provided on Y-21–23.

3) IT security and the Department’s financial systems—Increase of $20.1 million. 

The net increased costs are crucial to protecting borrowers’ personal information and 

enhance cybersecurity initiatives to decrease breaches; and to upgrade the Department’s 

core financial system to protect the Department’s data and reduce security risks. More 

detail is provided on Y-25–27 and Y-29.

FY 2018 Budget Costs by Category

SAA groups investments by category and the following chart provides the funding level for each 

cost category and the percentage share of the FY 2018 Budget request. Eighty-eight percent of 

the proposed SAA budget supports 2018 Federal Student Aid operational activities and 

personnel compensation and benefits. Federal Student Aid’s major operational activities

include: effectively servicing the growing student loan portfolio and operations for student aid 

application processing, origination and disbursement functions, and IT system hosting. The 

budget request includes $227.4 million to cover the personnel compensation and benefits costs 

of 1,524 Full-Time Equivalent (FTE) employment; 1,392 FTE in Federal Student Aid and 132 

FTE in the non-Federal Student Aid offices, as shown on page Y-29.

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

system), matching agreements (e.g., Social Security Administration), and IT security initiatives 

including FSA’s increased cybersecurity efforts account for 4 percent of the request. The 

remaining 8 percent includes overhead for central support (e.g., rent, background 

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

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

and other activities to carry out FSA’s mission.
STUDENT AID ADMINISTRATION

Y-20

The following sections highlight the budget categories specific investments for FY 2018.

FY 2018 Federal Student Aid Budget Priorities: $1,268.6 million

Effectively servicing the student loan portfolio: $1,017.0 million (an overall increase of 

$136.6 million from FY 2017 Annualized CR level)

The budget requests $1,017.0 million for loan servicing costs ($977.3 million for operations and

maintenance for loan servicers: $37.9 million for system development costs; $1.3 million for 

customer service satisfaction surveys of service used to allocate borrower accounts across 

servicers; and $.500 million for lockbox services). The servicing costs are based on the overall 

loan volume, the combination of repayment statuses in the loan portfolio, and the timing of loan 

delivery. 

Currently, the Department contracts with 9 servicers to provide borrower services for the 

Federal Direct Loan and TEACH Grant programs, as well as for federally held loans originated 

under the Federal Family Education Loan program. Two additional servicers provide services 

for the Perkins Loan program and default management. All servicers are funded entirely with 

discretionary budget authority. In addition, the costs necessary to service the Health Education 

Assistance Loan (HEAL) program are included in the total servicing request for FY 2018. 

Servicing cost estimates are very sensitive to changes in the total number of borrowers being 

serviced and the distribution of accounts across loan statuses. Loan servicers are paid a unit 

cost per borrower account that they service. Unit costs are structured to incentivize servicers to 

2018 Priorities 

(including servicing 

loans and continuing 

operations for core 

FSA systems), 

$1,268.6, 75%

Personnel 

Compensation & 

Benefits, $227.4, 13%

Other Core Student 

Aid Systems, $41.3, 

2%

IT Security Initiatives, 

$27.2, 2%

Overhead , $112.6, 

7%

Other, $20.6, 1%

FY 2018 Costs by Category and as Percent of Request 

 (dollars in millions)
STUDENT AID ADMINISTRATION

Y-21

keep borrower accounts in repayment current. Servicers are compensated more for accounts 

that are actively repaying. Conversely, servicers are paid less for accounts that are not actively 

repaying (in-school, deferment, and forbearance status) and incrementally paid even less as 

accounts shift further into non-payment (i.e., delinquency status). As the total number of 

borrower accounts being serviced increases and as more borrowers move into active 

repayment (current status), servicing costs will increase accordingly. FSA closely analyzes 

performance and costs of the servicing contractors to ensure that its estimates are as accurate 

as possible and to evaluate whether its servicing contracts are appropriately incentivizing 

servicers to keep borrowers in good standing. The current loan servicing contracts are set to 

expire in 2019 and the Department is working on a transition effort that will provide improved 

customer service to students and parents. The Department is in the middle of the procurement 

process and expects to award a new contract for federal student loan servicing later this year.

The Administration proposes to address student debt by simplifying student loan repayment and 

redirecting inefficiencies in the student loan program to prioritize expedited debt relief for 

undergraduate borrowers. For more information on the Administration’s proposal, please see 

the Student Aid Overview.

Quarterly Performance Data

To allocate loan servicing volume based on performance, the Department measures servicer 

performance quarterly on customer satisfaction, delinquency avoidance, and default prevention. 

The Quarterly Performance Data from May 2016 are displayed on pages Y-38–45. Quarterly 

Performance Data can also be found at the “Data Center” section on the Student Aid Web site 

(http://studentaid.ed.gov). Updates to this data will be released by electronic announcement in 

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

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

Maintaining continual operations for student aid application processing, origination and 

disbursement functions, and IT system hosting: $251.6 million (an overall decrease of 

$7.9 million from FY 2017 Annualized CR level)

The budget request includes $251.6 million for student aid application processing, origination, 

and disbursement functions, and information technology (IT) system infrastructure, a net 

decrease of $7.9 million from FY 2017. Included in this request are key FSA operational costs:

• Title IV Origination and Disbursement System (TIVODS) ($118.0 million);

• Application and Eligibility Determination System (AEDS) ($65.3 million) including operations

and maintenance of the development and processing of FAFSA ($27.9 million), customer

call center operations ($33.4 million), FSA Feedback and Ombudsman System ($2.5 million)

and reengineering efforts ($1.5 million);

• IT system costs ($66.5 million), including the operation and maintenance of the data center, 

software licenses, and the technical architecture and system support for FSA applications; 

and
STUDENT AID ADMINISTRATION

Y-22

• eCampus-Based system ($1.8 million).

Title IV Origination and Disbursement System (TIVODS): $118.0 million (an overall decrease of 

$5.0 million from FY 2017 Annualized CR level)

Federal Student Aid will originate and disburse over $181 billion in Pell Grants (HEA, Title IV, 

Part A, Subpart 1) and Direct Loans (HEA, Title IV, Part D) including loan consolidations in fiscal 

year 2018. TIVODS is responsible for originating and disbursing this aid to over 6,000 schools 

and millions of student recipients of federal student aid. The system also supports interfaces to 

other systems to verify borrower eligibility, enable funding, loan consolidation, borrower 

counseling, financial reporting, and program oversight. FSA has restructured contract activities 

to reduce overall costs in FY 2018 from FY 2017 while maintaining all essential services. 

Application and Eligibility Determination System (AEDS): $65.3 million; (an overall increase of 

$5.9 million from FY 2017 Annualized CR level)

AEDS operations and maintenance (O&M) provides funding for daily operations of systems and 

services related to FAFSA filing (online and paper), application processing, determination of aid 

eligibility, and development of the upcoming annual application. In addition to these contracted 

services, AEDS O&M provides funds for increased hardware and software support during 

FAFSA peak processing months which are a result of the implementation of prior-prior and early 

application availability.

In addition, the FSA Call Center ensures that customers, both student applicants and schools, 

have accessible, accurate, timely, and professional responses to their inquiries via their 

preferred method of communication. Funding also supports call center operational support for 

the Ombudsmans Group; including call intake, case work, and customer response services for 

new and existing contacts to the Federal Student Aid/Ombudsman Group. 

The FY 2018 budget request will support operations and maintenance costs for the FSA 

Feedback and Ombudsman System, which registers feedback and complaints by public users. 

After the compliant is registered, the complaint is then sent to the Ombudsman for the 

Ombudsman to reach out to the submitter for resolution. Lastly, funding will also support 

reengineering efforts, which will include contact award and transition costs. 

Next Generation Data Center (NGDC): $42.5 million (an overall decrease of $9.2 million from 

FY 2017 Annualized CR level)

The transition from the VDC to the NGDC is expected to be complete in FY 2017. The NGDC is 

a single computing environment for data and transaction processing, network communication 

services, infrastructure, and tools required to deliver financial aid. 

The NGDC hosts 56 system applications and has a security posture that incorporates best 

practices utilizing a hybrid cloud solution. The FY 2018 request will support the operation and 

maintenance of the NGDC and funding will also be utilized to provide the telecommunication 

foundation to FSA systems and call centers for the NGDC.
STUDENT AID ADMINISTRATION

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Enterprise Software Licenses: $18 million (no change from FY 2017 Annualized CR level)

Enterprise Software Licenses supports maintenance renewal agreements for all FSA and 

NGDC supported software. This program consolidates similar software licenses with different 

renewal dates under one agreement and reduces licensing duplication for FSA. Centralizing 

procurements and renewals of software licenses promotes cost savings through quantity 

discounts and reduction of contracts used for maintenance renewals.

Enterprise Architecture & Engineering (EAE): $6.0 million (an overall increase of $749 thousand

from FY 2017 Annualized CR level)

EAE provides a full range of technical architecture and engineering functions that provide FSA 

with the necessary services and support needed to plan, maintain, and develop its enterprise 

architecture. Engineering services include Enterprise IT Architecture (EITA) middleware 

architecture services and Enterprise Performance Testing (EPT) services.

EITA provides critical technology platform and technical support services, including integrated 

technical architecture and middleware architecture. EITA provides product support services,

including root cause analysis and resolution of middleware-related production issues for FSA's 

mission-critical applications. Middleware services reduce security vulnerabilities within the FSA 

system architecture. EPT provides performance testing analysis services that ensure FSA's 

applications are configured appropriately. It also makes sure that sufficient capacity is deployed 

during production for each mission critical application within the NGDC. 

eCampus-Based: $1.8 million (an overall decrease of $391 thousand from FY 2017 Annualized 

CR level)

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

Federal Work-Study. The system determines institutional funding needs and allocation levels 

based on data from the Fiscal Operations Report and Application to Participate; collects funding 

data to inform subsequent reallocations; maintains cumulative Perkins Loan funding histories; 

calculates institutional cohort default rates; catalogs low-income elementary and secondary 

schools for use in determining eligibility for teacher cancellation benefits; and identifies 

delinquent or defaulted Perkins loan borrowers. The FY 2018 request will support the operation 

and maintenance of the system.

Other Core Student Aid Administration Systems: $41.3 million

National Student Loan Data System (NSLDS): $15.7 million

NSLDS maintains detailed administrative data on the provision of Title IV aid, such as the 

number of loans and grants made, and provides for the electronic exchange of data between 

program participants and the system. NSLDS collects and stores data from borrowers, schools, 

lenders, and guaranty agencies and integrates data on student aid applicants and recipients.

The Department uses this comprehensive data to effectively administer the student loan and 

grant programs by preventing fraud and abuse through pre-screening and post-screening for 
STUDENT AID ADMINISTRATION

Y-24

Title IV aid eligibility, calculating statutory guaranty agency payments, and calculating higher 

education accountability measures. NSLDS data is now integrated into the Enterprise Data 

Warehouse and Analytics project, which improves the Department’s portfolio management, 

policy analysis, and budget formulation capabilities. The FY 2018 request supports the 

operations, maintenance, and enhancements of the system.

Integrated Partner Management (IPM): $8.7 million

In FY 2018, IPM will be fully operational and will simplify and reduce duplicate and conflicting 

data storage, complex system architectures, and excessive file exchange activities. IPM will 

provide a centralized view to all customers and employees of current institutional eligibility and 

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

of access, and help enforcement efforts. The FY 2018 request supports the operations and 

maintenance of the system.

Financial Management System (FMS): $8.6 million

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

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

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

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

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

payments. The FY 2018 request supports the operations and maintenance of the system. 

Federal Student Aid Administration Interagency Agreements: $4.5 million

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

verifying Federal student aid eligibility and accessibility and providing services to simplify the aid 

process. Currently the Department has agreements with Department of Treasury, Internal 

Revenue Service, Social Security Administration, Department of Homeland Security, Health 

Resources and Services Administration, and Department of Commerce. 

Participation Management (PM): $2.1 million

Participation Management is FSA's central system for managing partner organization enrollment 

in FSA data exchange services. Virtually all schools, third-party servicers, guaranty agencies, 

Federal loan servicers, FSA External Partners, State Agencies, and other organizations must 

use PM to enroll in services provided by FSA systems such as NSLDS, TIVODS, FMS, SAIG, 

AIMS, CPS, FAA Access, TPD and DMCS. Without PM, enrollment in FSA data services would 

be severely impaired as FSA's process for managing that access would become fragmented.

The FY 2018 request supports ongoing operations, maintenance, and customer support to 

manage collecting and integrating service enrollment information, and sharing that information 

in a timely manner across FSA systems.
STUDENT AID ADMINISTRATION

Y-25

OIG Fraud Referral: $1.0 million

The OIG Fraud Referral process streamlines FSA's intake procedures to determine if fraudulent 

activities occurred and the appropriate resolution. This effort is fully responsive to OIG requests 

for coordination on these referrals.

In FY 2018, funds will continue to provide annual contract support to maintain sustainable 

operations and will continue to advance data-driven analysis, outreach, and coordination of 

enhancements to FSA's control framework.

EDExpress (EDE): $660 thousand

Funding for this project is for the continued operation and maintenance of the EDE Suite 

(EDExpress and DL Tools) software tool provided by FSA to schools.

EDE Suite is a "school product" software suite provided to schools at no cost for their use in 

originating, disbursing, and packaging direct loans and grants for students. EDE Suite 

significantly eases the school's process of interacting with TIVODS to submit awards by 

automating most of the tasks involved in building the XML Common Record file that TIVODS 

requires for origination and disbursement of student aid.

The EDE Suite also provides valuable reconciliation functionality to participating Title IV 

schools, allowing them to compare their internal organizational award databases against the 

TIVODS database for direct loan and grant awards, and identify discrepancies that require 

further attention. Without FSA's continued support for this product, schools would be forced to 

seek technical support from private market software products at additional cost, develop their 

own products, or be unable to participate in Title IV programs due to inability to submit records 

to TIVODS. The FY 2018 request will support operations and maintenance of the system.

IT Security Initiatives: $27.2 million

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

compromising borrowers’ personal information. In addition to verifying that specific security 

requirements are being met in individual system and service contracts, FSA has specific 

initiatives to mitigate security risks.

Cybersecurity (CS) initiatives: $8.7 million

Cybersecurity (CS) initiatives mitigate current critical, high, and moderate vulnerabilities that 

affect FSA on an enterprise-wide scale. Instead of a single point solution or application-specific 

problems, CS initiatives cost-effectively fund remediation activities and enterprise solutions as 

indicated by industry best practices, DHS, and OIG audit findings. CS initiatives include 

implementing foundational security technologies that are seen as best practices that augment or 

add new capabilities to protect business functions such as loan servicing and delivery of grants 

and loans to students and institutes of higher education. These broad initiatives include 

reducing the types and numbers of insecure Internet connections from student to FSA systems, 

thus protecting the privacy and integrity of student financial and personal information.
STUDENT AID ADMINISTRATION

Y-26

Enterprise Identity Management System (EIMS): $8.1 million

Enterprise Identity Management Service (EIMS) enables authentication of FSA system users 

and provides access to FSA systems. EIMS is an umbrella initiative focused on improving the 

overall security posture of FSA systems, making identity management, permission and access 

management more efficient and secure for FSA systems, the 80,000 privileged users (ED, FSA 

and partners) and 76 million non-privileged users (students/borrowers). EIMS supports efforts 

to improve system security and meet dynamic changes to the Federal IT Security 

Requirements. Without EIMS, users (both privileged and non-privileged) would not be able to 

access systems securely. FSA continues to improve the handling and security of users’ 

PII. Most recently FSA decommissioned the use of the FSA PIN, a combination of a user’s last 

name, social security number, and date of birth, used to access to FSA websites and 

applications and electronically sign the FAFSA. The FAFSA ID, is a user created username and 

password, allows the user to electronically sign the FAFSA and access personal information on 

Federal Student Aid Web sites without having to enter their social security number at each login.

The EIMS initiative includes Person Authentication Service (PAS), Access and Identity 

Management System (AIMS), and Two-Factor Authentication (TFA). EIMS meets the FSA's 

business and technical requirements through these three main projects.

Person Authentication Service (PAS): $6.7 million

PAS provides a secure identity and access management system for non-privileged users, who 

have access to only their own PII (i.e., parents, borrowers). PAS centralizes access, identity 

management functions, and permissions for non-privileged users and also provides a secure 

system that is integrated with the FSA security architecture.

Access and Identity Management System (AIMS): $ 906 thousand

AIMS provides the FSA enterprise with enhanced sign-on capability and access control for web 

applications to privileged users, who have access to PII. AIMS allows for simplified logon and 

an integrated horizontal sign-on to multiple FSA applications. Thereby, enforcing standardized 

security requirements such as identity, password complexity, and multi-factor authentication. 

Currently, there are 25 major and minor applications behind AIMS serving a population of 

approximately 80,000 users including FSA employees, postsecondary schools’ financial aid 

administrators, and call center staff. The FY 2018 request supports ongoing operations and 

maintenance.

Two-Factor Authentication: $ 500 thousand

Homeland Security Presidential Directive 12 requires agencies to control access to their 

systems and data through the use of two-factor authentication (TFA). To meet this requirement, 

the Department of Education has implemented the TFA security protocol through which all 

authorized privileged users are required to use TFA to access Federal Student Aid systems via 

the Internet. TFA protects FSA systems that service a population of approximately 

80,000 users including FSA employees, postsecondary schools’ financial aid administrators, 

and call center staff. The FY 2018 request supports ongoing operations and maintenance.
STUDENT AID ADMINISTRATION

Y-27

System Security Authorizations (SSA): $6.7 million

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

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

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

performed before new systems are launched or system upgrades are implemented. Continuous 

testing must be completed to maintain system security authorization. In addition, an official 

re-authorization is required every 3 years for 61 FSA systems.

The FY 2018 request will continue to support ongoing operations and external support to protect 

our infrastructure and applications to ward off new threats and continue to defend against 

previous known threats.

Security Operations Center: $3.7 million

The Security Operations Center provides independent monitoring and analysis needed to 

protect the NGDC infrastructure, systems, and data from vulnerabilities. The Security Operation 

Center will automate the security sensors on approximately 1,500 servers housed at the NGDC

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

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

In FY 2018, FSA will continue to link external systems into the Security Operation Center to 

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

Other: $20.6 million

The "Other" category includes projects aimed at supporting FSA's mission and projects 

administered by FSA. Costs in the "Other" category include conference management,

compliance activities, Web site interfaces, human capital support, contract specialist support, 

travel, training and other administrative expenses. Below are some descriptions of key activities 

in this category.

Enterprise Data Warehouse and Analytics (EDW&A): $7.1 million

The EDW&A project centralizes FSA lifecycle data. EDW&A allows the Department to access 

timely, accurate, consistent, and repeatable data for improved analytics, insights, budgeting,

and reporting; and allows FSA to responsibly expand data available for research without 

compromising the administration of the Federal student aid programs. In particular, EDW&A 

data are central to the Department’s efforts to improve the cost estimation of the federal student 

loan programs. The system is a critical tool that will allow the Department to respond to recent 

recommendations on how to improve the IDR plan modeling from Congressional staff, the 

Government Accountability Office, the Office of the Inspector General, and external 

policymakers. EDW&A offers the opportunity for significant return on investment via data-driven 

insights to improve program management, retire redundant systems, and alleviate strain 

currently placed on NSLDS and other operational systems. The FY 2018 request includes $5.6

million to support continual operations and maintenance and $1.5 million for development work.
STUDENT AID ADMINISTRATION

Y-28

Conference Management: $2.7 million

Conference management supports the annual Federal Student Aid Fall Conference and Federal 

Student Aid’s participation in national financial aid related conferences (e.g., National 

Association of Student Financial Aid Administrators). Federal Student Aid uses these 

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

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

increases the integrity of the Federal student aid programs while ensuring appropriate 

stewardship of taxpayer resources. Some conference sessions specifically train against waste, 

fraud, abuse, and mismanagement of Title IV funds.

A-123 Requirements: $1.1 million

This project ensures that Federal Student Aid has sufficient internal controls to achieve its 

objectives and is in compliance with Federal Manager's Financial Integrity Act (FMFIA) and 

OMB Circular A-123. It supports management's annual assurance on the effectiveness of these 

controls and includes coordination of Improper Payment Act related requirements. 

Integrated Student Experience: $929 thousand

Integrated Student Experience is a multi-year effort to create a simpler and single portal for 

students, parents, and borrowers regarding information related to financial aid, applying for 

federal student aid, repaying student loans, and navigating through the college decisionmaking 

process. 
STUDENT AID ADMINISTRATION

Y-29

Non-Federal Student Aid Support Activities

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

$135.5 million ($112.6 million in Overhead and $22.9 million in non-Federal Student Aid 

personnel compensation and benefits) of the fiscal year 2018 request, an increase from the FY 

2017 Annualized CR level, $124.8 million, is allocated to departmental offices for central support 

activities, such as central computer services and financial management systems operations, 

rent and other overhead, and legal and policy expertise. Funding for Departmentwide financial 

management systems funded by this account will total $21.8 million in FY 2018, an increase of 

$8.0 million from the FY 2017 Annualized CR level; the increase is necessary to upgrade the 

core financial system to reduce security risks as explained in the Program Administration 

account request.

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

$19.7 million for FY 2018, an increase of $0.2 million from the FY 2017 Annualized CR level.

Combined funding for central computer services and telecommunications will total $36.6 million 

in FY 2018, an increase of $3.5 million for these activities from the FY 2017 Annualized CR 

level. The increase is necessary for enhanced security initiatives as explained in more detail in 

the Program Administration account request.

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

$26.2 million in FY 2018, a decrease of $0.2 million from $26.4 million, the FY 2017 Annualized 

CR level.

In addition to 1,392 FSA full-time staff, the FY 2018 request also provides $22.8 million, for the 

salaries and benefits of 132 FTE outside FSA who perform student-aid related activities and are 

located in the Office of the Chief Financial Officer; Office of the Chief Information Officer; Office 

of the Deputy Secretary; Office of the General Counsel; Office of Management; Office of 

Postsecondary Education; Office of Planning, Evaluation, and Policy Development, and Office 

of the Under Secretary.
STUDENT AID ADMINISTRATION

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System Application Matrix

The two system matrixes, shown in the charts below, illustrate the interdependencies between 

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

first chart shows each system application, its projected costs for FY 2017 Annualized CR level

and FY 2018, and core business functions supported by each system application. The second 

chart shows the interdependencies between all system applications and the four end users: 

schools, students, financial partners, and the Department of Education.

System Applications and Core Business Functions Interdependencies

System Application

2017

Annualized 

CR Cost 

(dollars in 

millions) footnote

2018 Cost 

(dollars in 

millions) footnote

Student Aid 

Application 

Processing

Origination 

and 

Disbursement

Student 

Loan 

Servicing

Loan Servicing $880.4 $1,017.0 No X X

Title IV Origination and 

Disbursement System 123.0 118.0 X X X

Application and Eligibility 

Determination System 57.1 65.31 X X No

Next Generation Data Center 51.7 42.5 X X X

Enterprise Software Licenses 18.0 18.0 X X X

National Student Loan Data 

System 11.1 15.7 X X X

Financial Management System 7.9 8.6 No X

Integrated Partner Management 1.8 8.7 No X X

Total Discretionary Costs 1,151.0 1,293.8 No No No

 1 Amount includes reengineering efforts.
STUDENT AID ADMINISTRATION

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Systems Applications and End Users

System Application School Student

Financial 

Partners 

Department 

of Education

Loan Servicing X X X X

Title IV Origination and Disbursement 

System X X No X

Application and Eligibility 

Determination System X X No X

Next Generation Data Center No No No X

Enterprise Software Licenses No No xo X

National Student Loan Data System X X X X

Financial Management System No X X

Integrated Partner Management X No X X

Note: Financial Partners include lenders and guaranty agencies.
STUDENT AID ADMINISTRATION

Y-32

Major SAA Contracts

The following tables provide a list of Student Aid Administration contracts estimated to exceed 

$5 million in fiscal years 2017 and 2018:

Contract: Loan Servicing

Description: Servicing and consolidation of direct student loans, Perkins 

loans, TEACH grants, servicing FFEL loans, and defaulted 

loans

FY 17 Annualized CR Level: $ 880.4million

FY 18 Funding: $ 1,017.0 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

PHEAA Harrisburg, PA*

Chester, PA

Mechanicsburg, PA

Pittsburgh, PA

State College, PA

Great Lakes Education Loan Services 

Inc.

Madison, WI*

Eagan, MN

Aberdeen, SD

Plano, TX

Boscobel, WI

Eau Claire, WI

Stevens, Point, WI

Rocky Hill, CT

Nelnet Servicing LLC Lincoln, NE*

Aurora, CO

Highlands Ranch, CO

Omaha, NE

Houston, TX

Boise, ID

Navient Wilmington, DE*

Reston, VA

Fishers, IN

Muncie, IN

Newark, DE

Wiles-Barre, PA

Missouri Higher Education Loan 

Authority

Chesterfield, MO*

Columbia, MO

Washington, DC

HESC/EdFinancial Knoxville, TN*

Chattanooga, TN

North Charleston, SC
STUDENT AID ADMINISTRATION

Y-33

Vendor Vendor Locations

Mansfield, OH

Mechanicsburg, PA

Cornerstone Salt Lake City, UT*

New Hampshire Higher Education 

Corporation

Concord, NH*

Oklahoma Student Loan Authority Oklahoma City, OK*

Maximus Federal Services, Inc. Frederick, MD*

Lawrence, KS

Educational Computer Systems Warrendale, PA*

Coraopolis, PA

Pittsburg, PA

Contract: Title IV Origination and Disbursement System (TIVODS)

Description: Disbursement of Pell Grants and Direct Loans

FY 17 Annualized CR Level: $ 123.0 million

FY 18 Funding: $ 118.0 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Accenture LLP Arlington, VA* 

Columbus, GA 

Monticello, KY

Niagara Falls, NY 

Piscataway, NJ

San Antonio, TX

Washington, DC
STUDENT AID ADMINISTRATION

Y-34

Contract: Application and Eligibility Determination System (AEDS)

Description: Integration of application processing, aid awareness, and 

eligibility determination

FY 17 Annualized CR Level: $ 57.1 million

FY 18 Funding: $ 65.3 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

General Dynamics One Source Fairfax, VA*

Coralville, IA

Lawrence, KS

Washington, DC

Montgomery, AL

Wetumpka, AL

Herndon, VA

Louisville, KY

Plano, TX

Dallas, TX

Roseville, CA

Raleigh, NC

Boise, ID

Senture London, KY*

Monticello, KY

HP Enterprise Services Palo Alto, CA*

Montgomery, AL

El Paso, TX

Monticello, KY

Orlando, FL

Phoenix Programming Services Rockville, MD*
STUDENT AID ADMINISTRATION

Y-35

Contract: Next Generation Data Center

Description: Data center for student financial aid systems

FY 17 Annualized CR Level: $ 51.7 million

FY 18 Funding: $ 42.5 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Hewlett Packard Enterprise Services Herndon, VA*

Alpharetta, GA

Boise, ID

Clarksville, VA

Colorado Springs, CO

Orlando, FL

Washington, DC

Contract: Enterprise Software Licensing

Description: Maintenance for software licenses for Financial 

Management System and database operations

FY 17 Annualized CR Level: $ 18.0 million

FY 18 Funding: $ 18.0 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Various Various
STUDENT AID ADMINISTRATION

Y-36

Contract: National Student Loan Data System

Description: Loan-level database to verify student eligibility, calculate 

institutional default rates, pay guaranty agency fees, track 

enrollment for loan servicing, and support credit reform 

accounting

FY 17 Annualized CR Level: $ 11.1 million

FY 18 Funding: $ 15.7 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Briefcase Systems Development, Inc. Arlington, VA*

Coralville, IA

Venice, FL

Lawrence, KS

Contract: Financial Management System

Description: Accounting system for transactions

FY 17 Annualized CR Level: $ 7.9 million

FY 18 Funding: $ 8.6 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Avineon, Inc. McLean, VA*

Washington, DC

Contract: System Security Authorization

Description: Basic security for all FSA applications and general support 

systems

FY 17 Annualized CR Level: $ 6.6 million

FY 18 Funding: $ 6.7 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor Vendor Locations

Blue Canopy Reston, VA
STUDENT AID ADMINISTRATION

Y-37

Contract: Integrated Partner Management

Description: Integration of institutional eligibility determination and 

oversight of schools, lenders, guaranty agencies and other 

FSA partners

FY 17 Annualized CR Level: $ 1.8 million

FY 18 Funding: $ 8.7 million

Vendors: *denotes vendor headquarters for loan servicers

Vendor(s) Vendor Locations

Chags Health Information Technology, 

LLC

Columbia, MD*

Herndon, VA

Creative Ideas Simple Solutions, Inc. Clarksville, MD*

Washington, DC

Lumark Technologies Inc. Fairfax, VA*

Washington, DC

Collabralink Technologies, Inc. McLean, VA
STUDENT AID ADMINISTRATION

Y-38

Y-38

Quarterly Performance Results

Quarter Ending May 31, 2016

Metric Segment Cornerstone

ESA/ 

Edfinancial

FedLoan 

Servicing 

(PHEAA)

Granite StateGSMR

Great Lakes 

Educational 

Loan

% of Borrowers in Current 

Repayment Status

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 88.44% 91.54% 77.38% 85.65% 79.60%

% of Borrowers in Current 

Repayment Status

2. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and an enrollment status code of G 

(graduated) 73.09% 67.11% 77.60% 52.33% 85.29%

% of Borrowers in Current 

Repayment Status

3. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 90.15% 92.50% 78.36% 90.21% 84.22%

% of Borrowers in Current 

Repayment Status

4. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and without an enrollment status code of G 

(graduated) 62.15% 32.49% 46.56% 37.38% 53.14%

% of Borrowers in Current 

Repayment Status

5. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 87.84% 90.70% 64.82% 86.58% 68.95%
STUDENT AID ADMINISTRATION

Y-39

Y-39

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016

Metric Segment MOHELA Navient Nelnet OSLA

VSAC Federal 

Loans

% of Borrowers in Current 

Repayment Status

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 90.14% 75.94% 81.32% 84.27% 87.27%

% of Borrowers in Current 

Repayment Status

2. Borrowers with no Consolidation or 

Parent Plus Loans, separation dates 1094 

days or less from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 66.58% 79.27% 82.10% 58.40% 71.31%

% of Borrowers in Current 

Repayment Status

3. Borrowers with no Consolidation or 

Parent Plus Loans, separation dates 1095 

days or greater from the last day of the 

current quarter, and an enrollment status 

code of G (graduated) 90.17% 75.52% 86.11% 90.50% 92.25%

% of Borrowers in Current 

Repayment Status

4. Borrowers with no Consolidation or 

Parent Plus Loans, separation dates 1094 

days or less from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 32.85% 48.74% 53.12% 37.05% 47.53%

% of Borrowers in Current 

Repayment Status

5. Borrowers with no Consolidation or 

Parent Plus Loans, separation dates 1095 

days or greater from the last day of the 

current quarter, and without an enrollment 

status code of G (graduated) 88.71% 62.18% 72.31% 84.52% 87.51%

Note: The Department no longer contracts directly with VSAC Federal Loans.
STUDENT AID ADMINISTRATION

Y-40

Y-40

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016 

Metric Segment Cornerstone

ESA/ 

Edfinancial

FedLoan 

Servicing 

(PHEAA)

Granite StateGSMR

Great Lakes 

Educational 

Loan

% of Borrowers 91-270 

Days Delinquent

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 2.48% 2.19% 6.99% 3.11% 6.47%

% of Borrowers 91-270 

Days Delinquent

2. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and an enrollment status code of G 

(graduated) 4.67% 5.70% 7.51% 8.64% 4.85%

% of Borrowers 91-270 

Days Delinquent

3. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 2.21% 2.12% 6.93% 2.10% 4.93%

% of Borrowers 91-270 

Days Delinquent

4. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and without an enrollment status code of G 

(graduated) 12.68% 30.20% 22.34% 21.92% 19.19%

% of Borrowers 91-270 

Days Delinquent

5. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 2.23% 2.36% 12.98% 2.92% 10.82%
STUDENT AID ADMINISTRATION

Y-41

Y-41

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016 

Metric Segment MOHELA Navient Nelnet OSLA

VSAC Federal 

Loans

% of Borrowers 91-270 

Days Delinquent

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 1.97% 5.55% 5.94% 3.40% 3.47%

% of Borrowers 91-270 

Days Delinquent

2. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and an enrollment status code of G 

(graduated) 4.26% 5.06% 5.86% 8.81% 6.56%

% of Borrowers 91-270 

Days Delinquent

3. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 1.82% 5.85% 4.17% 1.90% 2.46%

% of Borrowers 91-270 

Days Delinquent

4. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and without an enrollment status code of G 

(graduated) 27.88% 16.84% 19.15% 23.13% 12.58%

% of Borrowers 91-270 

Days Delinquent

5. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 2.86% 10.05% 9.48% 3.38% 3.95%

Note: The Department no longer contracts directly with VSAC Federal Loans.
STUDENT AID ADMINISTRATION

Y-42

Y-42

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016

Metric Segment Cornerstone

ESA/ 

Edfinancial

FedLoan 

Servicing 

(PHEAA)

Granite StateGSMR

Great Lakes 

Educational 

Loan

% of Borrowers 271-360 

Days Delinquent

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 0.63% 0.51% 1.47% 0.49% 1.79%

% of Borrowers 271-360 

Days Delinquent

2. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and an enrollment status code of G 

(graduated) 0.00% 0.22% 1.49% 0.00% 1.05%

% of Borrowers 271-360 

Days Delinquent

3. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 0.59% 0.50% 1.91% 0.46% 1.74%

% of Borrowers 271-360 

Days Delinquent

4. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or

less from the last day of the current quarter, 

and without an enrollment status code of G 

(graduated) 0.00% 0.41% 6.16% 0.42% 6.45%

% of Borrowers 271-360 

Days Delinquent

5. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 3.47% 0.61% 3.81% 0.63% 4.44%
STUDENT AID ADMINISTRATION

Y-43

Y-43

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016

Metric Segment MOHELA Navient Nelnet OSLA

VSAC Federal 

Loans

% of Borrowers 271-360 

Days Delinquent

1: Borrowers with at least one Consolidation 

or Parent Plus Loan 0.33% 1.17% 1.62% 0.67% 0.36%

% of Borrowers 271-360 

Days Delinquent

2. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and an enrollment status code of G 

(graduated) 0.04% 0.93% 1.22% 0.20% 0.20 %

% of Borrowers 271-360 

Days Delinquent

3. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and an enrollment status code of G 

(graduated) 0.29% 1.25% 1.35% 0.46% 0.24%

% of Borrowers 271-360 

Days Delinquent

4. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1094 days or 

less from the last day of the current quarter, 

and without an enrollment status code of G 

(graduated) 0.64% 4.47% 6.49% 0.35% 0.55%

% of Borrowers 271-360 

Days Delinquent

5. Borrowers with no Consolidation or Parent 

Plus Loans, separation dates 1095 days or 

greater from the last day of the current 

quarter, and without an enrollment status 

code of G (graduated) 0.48% 2.43% 3.51% 0.71% 0.51%

Note: The Department no longer contracts directly with VSAC Federal Loans.
STUDENT AID ADMINISTRATION

Y-44

Y-44

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016

Metric Cornerstone ESA/ Edfinancial

FedLoan Servicing 

(PHEAA)

Granite StateGSMRGreat Lakes 

Educational Loan

Borrower Survey 63.25% 65.50% 65.00% 69.50% 70.50%

Metric MOHELA Navient Nelnet OSLA

VSAC Federal 

Loans

Borrower Survey 69.75% 62.00% 68.25% 65.75% 69.00%

Notes: The Department no longer contracts directly with VSAC Federal Loans.

American Customer Satisfaction Index (ACSI) scale is 0 to 100.
STUDENT AID ADMINISTRATION

Y-45

Y-45

Quarterly Performance Results (continued)

Quarter Ending May 31, 2016

Metric Cornerstone ESA/ Edfinancial

FedLoan Servicing 

(PHEAA)

Granite StateGSMRGreat Lakes 

Educational Loan

Federal Personnel Survey 81.00% 79.00% 76.00% 80.00% 83.00%

Metric MOHELA Navient Nelnet OSLA

VSAC Federal 

Loans

Federal Personnel Survey 79.00% 78.00% 80.00% 78.00% 79.00%

Notes: The Department no longer contracts directly with VSAC Federal Loans.

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

.
STUDENT AID ADMINISTRATION

Y-46

PROGRAM PERFORMANCE INFORMATION

Performance Measures

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

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

progress made toward achieving program results. In November 2015, Federal Student Aid 

(FSA) released an updated strategic plan, Federal Student Aid: Strategic Plan, Fiscal Years 

2015–19 which described the organization’s current goals and objectives. FSA’s performance 

indicators were updated this year to account for improvements in data collection and analysis 

that allowed for more accurate and better-aligned metrics. 

Strategic Goal A: Improve quality of service for customers across the entire student aid 

life cycle.

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

Year Target Actual

2013 52.0%–54.0% 52.2

2014 58.8%–60.8% 60.1

2015 59.1%–61.1% 60.5

2016 59.5%–61.5% 57.557.

2017 56.5%–61.5% TBD

2018 TBD

Additional information: FSA did not meet its target for this metric with a result of 57.5 percent.

In the calculation of this performance metric, the numerator is the number of applications during 

the first nine months of the application cycle that are—as of September 30 of the first year of the 

application cycle—complete (not rejected). The denominator is the number of graduating 

seniors according to the most recent projection by the National Center for Education Statistics 

(NCES); this estimate often is made two to three years in advance. Before FSA calculated this 

FY16 performance metric, NCES significantly increased its estimated number of graduating 

seniors. FSA’s methodology for setting this target relies on the most current (at the time) NCES 

projection, but the methodology does not allow the denominator to be adjusted if NCES revises 

its estimates.

FSA conducted an unprecedented awareness and outreach campaign and partnered effectively 

with college access organizations across the nation. Instead of seeing the number of high 

school seniors who filed a FAFSA for the first time decline—which was expected with improving 

economic conditions and shrinking college enrollment—the number of seniors who filed a 

FAFSA for the first time increased by approximately 6,000. FSA will continue to analyze the 

increasing number of graduating high school seniors to determine how it might more effectively 

target the outreach and awareness efforts to grow the number of first-time FAFSA filers at the 

same pace as the growing number of high school graduates.
STUDENT AID ADMINISTRATION

Y-47

Measure: Persistence among first-time filing aid recipients.

Year Target Actual

2013 Metric not established

2014 77.5–79.5% 79.6

2015 78.6–80.6% 79.5

2016 78.5–80.5% 79.7

2017 78.7–80.7%

2018 TBD

Additional information: FSA met its target for this metric with a result of 79.7 percent. FSA 

has continued the expansion of outreach initiatives to improve persistence levels among aid 

filers. The increased efforts, including outreach and digital engagement campaigns, have 

resulted in FSA exceeding its target for a third consecutive year.

Measure: Customer visits to StudentAid.gov.

Year Target Actual

2013 Metric not established

2014 > =30.7 million 32.7 million

2015 > =32.7 million 43.3 million

2016 > =43.3 million 47.2 million

2017 > =43.3 million

2018 TBD

Additional information: FSA met its target with a result of 47.2 million. FSA continued to 

exceed its target for this metric again in FY 2016 with a result of 47.2 million customer visits. 

This represents a more than nine percent increase in visits compared to the previous year. 

FSA’s performance for this metric is a testament to the success of its effort to consolidate 

disparate sites and systems into a single integrated student experience. Since its launch in 

2012, StudentAid.gov has evolved into FSA’s premier information interface for student aid tools, 

resources, and service.
STUDENT AID ADMINISTRATION

Y-48

Measure: Social media channel subscribership.

Year Target Actual

2013 Metric not established

2014 >= 296,000 subscribers 368,042

2015 >=368,000 subscribers 454,066

2016 >= 454,000 subscribers 528,251

2017 >= 500,000 subscribers

2018 TBD

Additional information: FSA met its target with a result of 528,251. FSA greatly exceeded its 

target on this metric for the third year in a row, with more than 528,000 subscribers on 

Facebook, Twitter, and YouTube. FY 2016 results represent a 16 percent increase from FY 

2015.

In today’s information age, digital media techniques are becoming increasingly critical for

effective customer engagement. Over the past several years, FSA has aggressively leveraged 

social media tools to drive awareness, uncover insights, engage and interact with students and 

borrowers, and drive traffic to FSA’s websites. This metric helps track FSA’s progress in this 

domain.

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

lifecycle (1–100 Scale).

Year Target Actual

2013 78.0 78.4

2014 77.4–79.4 78.4

2015 77.4–79.4 77.27.2

2016 74 70.47

2017 69.4–71.4

2018 TBD

Note: Customer satisfaction scores for the entire life cycle are based upon ACSI scores from the application, inschool, and servicing experiences of students and borrowers; scores are based on a zero-to-100-point scale. Data 

are weighted based on the intensity of the experience to the overall life cycle and the number of students within each 

category of the life cycle.

Additional information: FSA did not meet its target for this metric with a result of 70.4. FSA 

has seen a shift in scores following changes in FY 2016 to the method used to conduct

customer satisfaction surveys. The change from live interviewers to an online survey has 

produced lower satisfaction levels than past years. This is in-line with longstanding findings in 

survey research regarding “social desirability bias,” the tendency of respondents to want to give 

live interviewers answers that are less conflictual, more like the ones they are “supposed” to 

give, in order to seem appealing to the interviewer. In the context of satisfaction research, this 

typically means that respondents will give higher ratings to live interviewers than they will 

provide on online forms. In FSA’s experience with the methodology used, scores tend to run 

three to five points lower on the 0 to 100 point scale that FSA uses; in some cases, the effect is 

more extreme (e.g., 10-point declines or more).
STUDENT AID ADMINISTRATION

Y-49

Strategic Goal B: Proactively manage the student aid portfolio to mitigate risk.

Measure: Improper Payment Rate.

Year Target Actual

2013 Prior to revised metric

2014 Prior to revised metric

2015 1.65% 2.38%

2016 N/A 4.85

2017 4.85

2018 TBD

Note: The FY 2015 improper payment target and actual rates reported in the table above reflect the corrected 

improper payment rates for FY 2015 as determined by the FY 2015 IPERA Compliance Audit Report published by the 

Office of Inspector General (OIG) May 10, 2016. The corrected improper payment rates are prepared in accordance 

with the alternative sampling and estimation methodology approved by OMB as of October 20, 2015. The rate 

reported in FSA’s FY 2015 Annual Report was 1.44 percent

The OMB-approved FY 2016 improper payment estimation methodology is an alternative, as opposed to statistical 

methodology. Accordingly, these estimates may lack the precision of other estimates developed using random, 

statistical methodologies. The alternative methodology is based on an analysis of data obtained from program 

reviews conducted at schools identified through a risk-based (i.e., non-random) selection process. The FY 2016 

alternative methodology includes improvements over the prior year incorporating risks and sources previously not 

incorporated. These changes help improve the accuracy and completeness of the estimates.

Additional information: The Improper Payment Rate metric is a single ‘blended’ rate that 

divides aggregated estimated improper payments for all programs identified as risk-susceptible 

for that year by aggregated estimated program outlays. In FY 2015 and FY 2016, FSA 

identified the Pell Grant and Direct loan programs as risk-susceptible. FSA convened a working 

group in 2016 with OIG and OMB participating in an advisory capacity to identify, evaluate, and 

implement improvements to the baseline estimation methodology to address improper payment 

risks not previously incorporated. At the time 2016 targets were set, it was known that the 

estimation methodology would change, but not the impact. Accordingly, no target was set for 

this measure for 2016. The underlying improper payment estimates were calculated using an 

alternative methodology that was modified from the prior year to include new risks and data 

sources. The increase in the improper payment rate over the prior year may be attributable to 

changes to and the imprecision of the alternative methodology, as opposed to a control failure 

or an increase in actual improper payments in the underlying programs. Nevertheless, FSA 

continues to enhance its internal control framework to prevent and detect improper payments. 

For the Title IV risk-susceptible Pell grant and Direct Loan programs, the Department also 

estimates improper payment rates and analyzes the root causes of the improper payments 

detected. The major root causes of improper payments in the Pell Grant and Direct Loan 

programs are incorrect self-reporting of an applicant’s income, which leads to incorrect awards 

based on Expected Family Contribution (EFC), incorrect processing of student data by 

institutions during normal operations, student account data changes not applied or processed 

correctly, ineligibility for a Pell Grant or Direct Loan (e.g., validity of high school attended, history 

of degrees obtained), satisfactory academic progress not achieved, and incorrectly calculated 

return records by institutions returning Title IV student aid funds. To prevent and reduce 
STUDENT AID ADMINISTRATION

Y-50

improper payments, the Department is pursuing several corrective actions, to include adding or 

strengthening relevant controls.

The Department also uses other verification methods to protect against improper payments and 

to confirm specific information reported on the FAFSA by the applicant. Schools are required to 

verify all applicants that are selected by the Department for verification. Annually, the 

Department analyzes FSA’s grant recipients, student loan borrowers, and the verification 

selection system, and informs the financial aid community which FAFSA items are subject to 

verification for the upcoming award year. This annual analysis is intended to enhance 

verification methodology and to meet the goal of selecting applicants who are most likely to 

have incorrect information on their FAFSA.

In addition, FSA works to promote accuracy and accountability in the administration of Title IV 

student financial aid through institutional oversight, guidance, technical assistance, and 

enforcement. As part of its ongoing activities, the Program Compliance office conducts periodic 

recertification of all schools’ eligibility, issues loss of eligibility determinations to schools, 

assesses millions of dollars in final program review and final audit determinations, and debars 

individuals from receiving assistance or benefits from any Federal Agency as a result of 

financial aid fraud or other criminal convictions.

Measure: Percent of borrowers >90 days delinquent.

Year Target Actual

2013 Prior to revised metric

2014 Prior to revised metric

2015 10.4% 9.8%

2016 9.9 8.8

2017 7.3

2018 TBD

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

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

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

Additional information: FSA met its target with a result of 8.8 percent. Reducing the percent 

of borrowers with loans in a delinquent status has been a major goal of FSA, and success in this 

metric reflects FSA’s accomplishments in this area. Increased utilization of income-driven 

repayment plans and borrower awareness campaigns have helped FSA build on the 

improvements in FY 2015 and continue to reduce delinquency. The number of accounts 

between 90 and 270 days delinquent was 10 percent lower than anticipated, while the number 

of accounts in repayment was about one percent higher than expected.
STUDENT AID ADMINISTRATION

Y-51

Strategic Goal C: Improve operational efficiency and flexibility.

Measure: Aid Delivery Cost per Application.

Year Target Actual

2013 11.23 11.16

2014 11.94 11.43

2015 12.28 10.73

2016 13.11 11.53

2017 11.54

2018 TBD

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

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

Specifically, the measure is defined as the total direct cost to process FAFSAs and originate aid in the year ending 

June 30, divided by the number of original FAFSAs processed in the year. 

Additional information: FSA met its target with a result of $11.53. Actual costs were 11 

percent lower than projected due to a delay in incurring costs associated with newly negotiated 

call center services. The number of applications was essentially the same as forecasted. It is 

anticipated that the FY 2017 results will be significantly higher due to increased call center 

resources needed to address higher call volumes due to confusion about the implementation of 

the FSA ID.

Measure: Outstanding Direct Loan Portfolio in Current Repayment Status.

Year Target Actual

2013 Prior to revised metric

2014 Prior to revised metric

2015 Prior to revised metric

2016 85.3% 85.35

2017 84.9%–85.9%

2018 TBD

This new metric is calculated using the Direct Loan Portfolio by Delinquency Status Report published on the FSA 

Data Center using data provided by NSLDS. 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 active 

repayment status at the non-default servicers. The metric result is computed as a four-quarter moving average as of 

September 30 of the current fiscal year. This allows FSA to account for changes relating to seasonality and indirect 

factors that could be false indicators of change. However, since the data center report for 4Q FY 2016 was not 

available as of the date of this report, portfolio values were estimated from alternative sources.

Additional information: FSA met its target for this metric with a result of 85.35 percent.

The continued improvement in portfolio dollars current is a direct result of an increased effort to 

enroll borrowers in income-driven repayment plans and the expanded efforts to provide 

information about affordable repayment options. Greater resources for borrowers help mitigate 

the risk of delinquency and default as is evidenced by the results shown this year.
STUDENT AID ADMINISTRATION

Y-52

Strategic Goal D: Foster trust and collaboration among stakeholders.

Measure: Ease of Doing Business with FSA (1–100 Scale).

Year Target Actual

2013 74.0 74.0

2014 73.0–75.0 77.0

2015 75.9–77.9 75.8

2016 74.3–77.3 72.3.

2017 71.3–73.3

2018 TBD

Additional information: FSA did not meet its target with a result of 72.3. The lower score for 

this metric is the result of a number of high-profile changes to FSA programs and the 

implementation of new regulations in FY 2016. FSA implemented the early FAFSA and the use 

of “prior-prior” tax year information. These changes have and will continue to greatly benefit 

borrowers, but also are a massive shift in the traditional student loan landscape; postsecondary 

institutions have had to make adjustments to their typical processes and procedures. The 

implementation of these new regulations and programmatic changes will have positive longterm impacts on borrowers, and FSA expects to see a notable increase in the partner 

experience into FY 2017.

Measure: Percentage of contract dollars competed by FSA.

Year Target Actual

2013 Metric not established

2014 85.3–87.3% 88.7%

2015 87.7–89.7% 90.3

2016 89.3–91.3% 92.9

2017 89.3–91.3%

2018 TBD

Additional information: FSA exceeded this metric with a final score of 92.9 percent. FSA 

continues to improve the percent of contract dollars competed in each fiscal year and continues 

to develop and maintain the highest quality standards among enterprise contractors.
STUDENT AID ADMINISTRATION

Y-53

Measure: Collection Rate (non-default and default).

Year Target Actual

2013 $34.31 41.57

2014 45.65 35.90

2015 36.56 51.58

2016 51.79 53.07

2017 51.57

2018 TBD

Collections are defined as the total amount of principal collected on both current and defaulted debt during the 12-

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

debt collections for the same period using FSA’s Activity Based Costing process. The cost data are derived from 

FSA’s Activity-Based Costing model (Default Collections and Loan Servicing) and Private Collection Agency 

spending. Servicing costs are paid out of the Student Aid Administration discretionary account and costs related to 

collecting on defaulted loans are paid through the respective program financing accounts.

Additional information: FSA met its target for this metric, which is calculated by dividing the 

total collections on receivables from loan servicing and default collections by the combined cost 

of loan servicing and default collections, with a result of $53.07. The actual result exceeded the 

forecast due to lower costs from the implementation of a flat fee for loan rehabilitations. 

Contract collection costs were approximately $74 million (or eight percent) less than anticipated, 

while loan servicing costs and total collections were at anticipated levels. The Department is in 

the middle of the procurement process and expects to award a new contract for federal student 

loan servicing later this year. That effort will inform the FY 2018 estimate.

Strategic Goal E: Strengthen Federal Student Aid’s performance culture and become 

one of the best places to work in the Federal Government.

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

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

Year Target Actual

2013 Baseline 64.2%

2014 >=64.2% 67.7

2015 66.7–68.7 67.9

2016 66.9–68.9 67.4

2017 65.4–69.4

2018 TBD

Additional information: FSA met its target with a result of 67.4 percent. The FY 2016 target 

for FSA’s Employee Engagement Index was 66.9–68.9 percent. This target provided a one 

percent plus or minus variance from the actual percentage (67.9 percent) achieved in FY 2015. 

FSA was able to exceed its target for the third consecutive year and saw positive gains in the 

employee engagement elements “Leaders Lead” and “Supervisors.” FSA also saw a 5.5-

percent increase in the FEVS response rate, which builds on FY 2015 improvements and the 

overall 16.2 percent increase from FY 2014. More information about the FEVS and the 

questions included on the survey can be found at fedview.opm.gov.
STUDENT AID ADMINISTRATION

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Organization Chart