FY 2022 AGENCY FINANCIAL REPORT 36 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

Forward-Looking Information

This section summarizes information pertinent to the 

Department’s future progress and success.

DIRECT LOAN PROGRAM

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

Federal Direct Loan (Direct Loan) Program, provides 

students and their families with funds to help pay for their 

postsecondary education costs. The following describes 

(1) the steps the Department has taken to help make 

student debt more manageable and (2) the risks inherent in 

estimating the cost of the program.

Managing Student Loan Debt

Each year, federal student loans help millions of Americans 

obtain a college education—an investment that, on average, 

has high returns. While the average return to having a 

college degree remains high,5

 some students leave school 

poorly equipped to manage their debt.

Traditionally, federal student loans had fixed-payment 10-

year repayment schedules, making it difficult for borrowers 

to begin repaying at the start of their career when their 

salaries are low. The recent expansion of income-driven 

repayment (IDR) plans allows students the opportunity for 

greater financial flexibility as it pertains to their monthly 

repayment. For more details on these plans, visit FSA’s How

to Repay Your Loans Portal.

Recent trends in student loan repayment data show that:

• More than 73 percent of the direct loan portfolio is in 

administrative forbearance—the suspended payment 

status provided to students through the extension of the 

student loan repayment deferrals.

• As of June 2022, nearly 8.4 million direct loan 

recipients were enrolled in IDR plans, representing 

a 1 percent increase from June 2021 and a 3 percent 

increase from June 2020. Overall, more than 45 percent 

of direct loan dollars and 33 percent of borrowers in 

repayment are enrolled in an IDR plan.

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

The Department continues to work relentlessly to make 

student loan debt more manageable. Looking to the future, 

the Department will:

• Continue conducting outreach efforts to inform student 

loan borrowers of their repayment options before the 

emergency loan relief measures expire. 

• Work to improve customer service and student aid 

systems and processes by implementing FSA’s Next Gen 

FSA, see page 39.

• Continue to support the development of additional 

tools, such as the College Scorecard and College 

Financing Plan, to increase transparency around 

higher education costs and outcomes that may help 

students and families make informed decisions before 

college enrollment.

Managing Risks and Uncertainty Facing the Direct 

Loan Program’s Cost Estimates

Direct Loan Program costs are estimated consistent with 

the requirements of the Federal Credit Reform Act of 1990. 

Under the act, the future disbursements and collections 

associated with a cohort of loans are estimated for the 

entire life of the loan, up to 40 years in this case. The 

actual performance of a loan cohort tends to deviate from 

the estimated performance during that time, which is not 

unexpected in developing estimates. Estimation of Federal 

credit programs involves inherent risk. The Department 

utilizes the best data available with modeling techniques 

that have been examined over time by several outside 

entities. Management has confidence over the estimates by 

using several different tools to analyze cost estimates. Reestimates on the loan portfolio are performed twice a year 

ensuring that the most up to date data and models are used. 

There are four types of inherent risk, described below, that 

make estimating lifetime program costs a difficult task.

Legislative, Regulatory, and Policy Risk

There are inherent risks to estimating future lifetime 

disbursements and collections for a cohort stemming 

from legislative, regulatory, or administrative actions. For 

instance, the cost structure of the Direct Loan Program may 
FY 2022 AGENCY FINANCIAL REPORT 37 U.S. DEPARTMENT OF EDUCATION

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S ( U N A U D I T E D ) 

be significantly altered if policies around loan forgiveness 

are expanded. In addition, the effects on financial modeling 

and estimation associated with recent legislative, regulatory, 

and policy action is difficult to interpret given the lack of 

actual trend data availability. Some examples of current 

risks include the following:

Extension of Student Loan Payment Relief During the 

COVID-19 Pandemic: The emergency relief measures 

in the Direct Loan Program, including suspending loan 

payments, halting collections on defaulted loans, and 

setting interest rates to 0 percent have been extended. 

These actions have insulated federal student loan 

performance from economic disruption caused by the 

COVID-19 pandemic, while at the same time reducing 

the amount of loan repayments being remitted to the 

Department. As the pandemic is ongoing, there is 

uncertainty regarding cost estimates as future actions to 

support borrowers during the return to repayment in 2023 

could affect those received payments. 

Income-Driven Repayment Plans: Without consideration 

of impacts from the pandemic, IDR plans tend to be more 

costly to the government than non-IDR plans. For the 2022 

loan cohort, it is estimated that the government will recover 

47 percent less for loans in IDR plans as compared to loans 

in standard plans. It is important to be careful in making 

such comparisons, however, as the underlying characteristics 

of borrowers (and the corresponding behavioral dynamics 

driving selection of plans) also impact the overall cost of 

loans under each plan. Also, having more repayment plan 

options complicates repayment plan selection, since the 

tradeoff decisions when selecting the plans vary by borrower 

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

the proliferation of IDR plans has made IDR terms more 

generous and made the plans available to a greater number 

of borrowers; these plans are traditionally more costly to 

the government. Selected comparisons between projected 

originations and borrower repayments under the different 

IDR plans are available on the Department’s website. Future 

commitment to promote these programs, and potential 

increased participation in these plans, are areas of uncertainty. 

Future legislative and/or regulatory activity could also affect 

the underlying cost of IDR plans.

Public Service Loan Forgiveness: Enacted in 2007, the 

Public Service Loan Forgiveness (PSLF) program allows 

a direct loan borrower to have the balance of their direct 

loans forgiven after having made 120 qualifying monthly 

payments under a qualifying repayment plan, while working 

full time for a qualifying public service employer (such as 

government or certain types of nonprofit organizations). In 

general, forgiveness provided via PSLF raises the cost of the 

Direct Loan Program; however, there is still uncertainty as 

to how many borrowers will take advantage of the program. 

Much of this uncertainty arises because borrowers are not 

required to apply for the program or provide any supporting 

documentation on their employment until after having made 

the 120 qualifying monthly payments.

On October 5, 2021, the Department announced a 

temporary change to the PSLF program to allow previously 

ineligible loans to be immediately eligible for forgiveness, 

or additional progress toward forgiveness, with no further 

action from the borrower. The changes included a limited 

PSLF waiver that allows all payments by student borrowers 

to count toward PSLF, regardless of loan program or 

payment plan and a review of denied PSLF applications 

for errors, giving borrowers the ability to have their PSLF 

determinations reconsidered. Borrowers who have not 

previously certified employment have been able to apply for 

the waiver. Two permanent changes to military borrowers 

working toward PSLF were also implemented. This 

opportunity ended on October 31, 2022. 

The Consolidated Appropriations Act, FY 2018, and the 

Department of Education Appropriations Act, FY 2019, each 

provided $350 million toward Temporary Expanded Public 

Service Loan Forgiveness (TEPSLF) for borrowers who 

met eligibility for public service employment but were not 

enrolled in a qualified repayment plan. The Consolidated 

Appropriations Act, FY 2020, and the Consolidated 

Appropriations Act, FY 2021, each provided $50 million 

for TEPSLF. 

Data on approved PSLF applications first became available 

in FY 2018 since borrowers first became eligible for PSLF 

discharges starting October 1, 2017, after having made 

120 qualifying payments. As of July 31, 2022, the total 

number of borrowers who received forgiveness from 

the PSLF waiver exceeded 172,000. The value of this 

forgiveness totaled $10.5 billion. Including TEPSLF and 

PSLF discharges not associated with the waiver, the value of 

forgiveness exceeded $12 billion. 

As of July 31, 2022, the number of borrowers with certified 

employment totaled nearly 1.33 million. The low number 

of approved PSLF applications in relation to employment 

certifications may be partially due to the complicated 

nature of the program, in particular the determination of 

what constitutes a qualifying payment. In addition, many 

borrowers who file employment certification forms early in 

their careers may also move into private sector employment 

before completing the 10 years of qualifying payments and 

thus may (a) never apply for forgiveness or (b) apply for 

forgiveness much later after returning to public service work. 

Any future congressional or regulatory action that may affect 

eligibility for PSLF continues to be an area of uncertainty.
FY 2022 AGENCY FINANCIAL REPORT 38 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

Broad-Based Debt Relief: In August, the administration 

announced its plan to cancel up to $20,000 in student 

debt for eligible borrowers to give working and middleclass families more breathing room as they recover from 

the pandemic. As a result of Student Debt Relief, millions 

of borrowers will no longer have to make repayments on 

their loans and millions more will be able to substantially 

reduce their repayments. The Department estimates that 

the vast majority of eligible borrowers—81%—will take the 

necessary steps to get relief. This assumption is uncertain, as 

other relief programs vary in terms of take-up rates. 

The executive action carrying out the plan for Student 

Debt Relief is based on extensive legal analysis by multiple 

federal offices concluding that the action is within the 

Secretary’s authority and otherwise complies with the 

law. That conclusion is reflected in a memorandum by the 

Office of the General Counsel and an opinion from the 

Department of Justice’s Office of Legal Counsel, which 

were both made available with the action’s announcement 

on August 24. As is the case with many high-profile 

executive actions, the plan is the subject of recent litigation, 

which is pending. The Department cannot predict the 

outcome of litigation, but the conclusions in the legal 

memoranda made available in August have not changed in 

the intervening time. Accordingly, the Department plans to 

vigorously defend the executive action against all existing 

and future challenges. 

Borrower Defense to Repayment: On June 22, 2022, 

the Department and the plaintiffs reached a proposed 

settlement in the case titled Sweet v. Cardona (formerly 

Sweet v. DeVos). If approved by the court, that agreement 

will affect the processing of borrower defense applications 

in FY 2023. In the proposed settlements, if the borrower 

defense application is related to federal student loans 

taken out to pay for attendance at any school on the 

list of schools attached to the settlement agreement, 

the borrower will receive “Full Settlement Relief.” Full 

Settlement Relief means that the federal student loan(s) 

associated with the borrower’s attendance at the school will 

be discharged, the Department will refund any amounts 

paid to it on those loans, and the credit tradeline for those 

loans will be deleted from the borrower’s credit report.

Estimation Risk

Actual student loan outcomes may deviate from estimated 

student loan outcomes, which is not unexpected given 

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

Loan Program is subject to a significantly large number 

of borrower-level events and future economic factors that 

heavily impact the ultimate cost of student loans. For 

example, assumptions that need to be estimated for loans 

originating in FY 2022 include how long students will 

remain in school; what repayment plan will be chosen; 

whether the loan will be consolidated; whether the 

borrower will die prior to completing repayment, become 

disabled, bankrupt, or have another claim for discharge or 

forgiveness (closed school loan discharge, borrower defense 

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

or forbearance; whether the loan will go into default and, if 

so, what collections will be received on the defaulted loan; 

and, if the loan is in an IDR plan, what the borrower’s 

employment (public sector or not) and income and family 

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

generally made based on historical data about borrower 

characteristics and behavior, which are more difficult to 

estimate. Lastly, the direct loan portfolio has grown from 

approximately $356 billion in FY 2011 to more than $1.3 

trillion as of the end of FY 2022. This growth naturally 

results in larger re-estimates, since a re-estimate worth 1 

percent of the portfolio today would be more than three 

times as large as a similar re-estimate in FY 2011.

Macroeconomic Risk

The ultimate amount, timing, and total value of future 

borrower repayments under the Direct Loan Program are 

heavily affected by certain economic factors, especially since 

the introduction of IDR plans.

In 2022, the COVID-19 pandemic continued to cause 

widespread disruption to the American economy. The 

emergency relief measures provided by Congress and the 

President resulted in flexibilities for federal student loan 

borrowers, continuing to prevent spikes in delinquency 

and default rates. Involuntary loan collections from wage 

garnishment, tax refund reductions, and reductions of 

federal benefits such as Social Security are also suspended. 

However, the ultimate impact of the pandemic on longterm Direct Loan Program costs will depend on, among 

other things, short- and long-term unemployment, 

economic growth trends, and potential structural changes 

in the overall economy and job markets. Some types of 

macroeconomic risk are inherent to student loan cost 

estimation, and the Department analyzes them regularly—

though some of these risks have been exacerbated by the 

unprecedented worldwide pandemic. New risks have also 

developed due to the conditions surrounding the pandemic. 

Specific examples of macroeconomic risk include:

Interest Rates: Direct Loan Program cost estimates are very 

sensitive to changes in interest rates. Under the current 

program terms, the fixed borrower rates for direct loans 

are established in advance of the upcoming school year, 
FY 2022 AGENCY FINANCIAL REPORT 39 U.S. DEPARTMENT OF EDUCATION

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S ( U N A U D I T E D ) 

while the Treasury fixed interest rate on the Department’s 

borrowings to fund those loans is not set until after 

those awards are fully disbursed, which can be as much 

as 18 months later. Unexpected changes in interest rates 

during this time can significantly impact Direct Loan 

Program cost.

Unemployment: Unemployment rates have been shown 

to affect both student loan volume and student loan 

repayment decisions and behavior. During periods of 

economic downturn, displaced workers have tended to 

pursue higher education opportunities in high numbers 

to strengthen their credentials, change career paths, or 

improve future employment opportunities. The exact 

impact on the cost estimates from the current period 

remains an area of uncertainty. For instance, higher shortterm unemployment rates could have an impact on future 

collections of already defaulted loans by increasing the risk 

of fewer collections from wage garnishment and tax refund 

reductions. A sensitivity analysis examining the impact 

of a 5 percent reduction in default collections, limited to 

cohorts 2017–21, resulted in a projected increase in the reestimate of $3.4 billion.

Wage Growth: The estimated costs of IDR plans are 

largely dependent on trends in observed wage growth. To 

the extent that future wage growth deviates significantly 

from prior wage growth, actual costs of IDR plans may 

deviate from estimated costs. The Department will closely 

monitor impacts to wage growth because of the pandemic. 

The estimates are sensitive to slight changes in model 

assumptions. The Department continues to manage risks in 

this area by building its knowledge about its borrower base 

and remaining informed of labor market statistics.

Operational Risk

Unforeseen issues in administering and servicing student 

loans may impact the cost estimates. For example, in 

December 2019, the President signed the Fostering 

Undergraduate Talent by Unlocking Resources for Education 

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

Internal Revenue Code to allow the IRS to share taxpayer 

data directly with the Department. Once implemented, this 

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

plan by allowing automated data sharing between federal 

agencies and eliminating the need for borrowers to annually 

recertify their income. A timeline for implementation of 

the FUTURE Act is uncertain. Similarly, the Department is 

working to implement the FAFSA Simplification Act, which 

makes significant changes to the need analysis formula that 

will also introduce operational challenges. The Department 

invests significant resources to ensure continuous 

improvements in cybersecurity defenses based on current and 

emerging threats. Despite this investment, security threats to 

operations are ongoing and incidents may happen without 

warning, potentially disrupting student loan administration 

and ultimately borrower cash flows, which can be impacted 

by the timing of when collections or disbursements are 

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

unpredictable disruptions in the administrative status quo 

may impact student loan cost estimates.

Another potentially unforeseen issue that may impact cost 

estimates is when federal loan servicers or private collection 

agencies exit the student loan servicing program, as several 

have over the last year. The Department remains committed 

to ensuring that borrowers receive high-quality service that 

helps them access the benefits granted by law.

NEXT GEN FSA

About FSA

As the nation’s largest provider of financial aid for education 

beyond high school, Federal Student Aid (FSA) delivers 

approximately $112 billion in aid each year to students 

and their families. Through programs authorized under the 

Higher Education Act of 1965, as amended, FSA provides 

grants, loans, and work-study funds for college and career 

school. FSA’s loan portfolio has grown to more than $1.6 

trillion. FSA also provides oversight of approximately 5,600 

postsecondary institutions that participate in the federal 

student aid programs. In every interaction with students 

and their families, FSA strives to be the most trusted and 

reliable source of student financial aid information and 

services in the nation.

The Vision

Through the Next Generation Federal Student Aid 

(Next Gen FSA) initiative, the Department continues to 

modernize FSA’s programs, technology, processes, and 

operations to improve student, parent, and borrower 

experiences and outcomes, as well as those of student 

aid partners. Moreover, through Next Gen FSA, the 

Department continues to strengthen cybersecurity 

protections for students, parents, borrowers, institutions, 

and other financial partners.

Legacy Environment

In the current federal student aid process, students and 

families navigate a complex and fragmented landscape and 

interact with multiple systems, vendors, processes, and 

interfaces across a multitude of brands and user experiences. 

This poor customer experience creates confusion and results 
FY 2022 AGENCY FINANCIAL REPORT 40 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

in customers failing to understand how to apply for and 

maintain their aid eligibility. Because of a confusing current 

state, federal student loan borrowers do not know for 

which loan forgiveness and repayment options they qualify. 

Additionally, operational complexities result in higher 

administrative costs and hinder effective oversight of the 

Department’s vendors.

Next Gen FSA Environment

FSA combined multiple websites, contact centers, and 

other customer interfaces into a simplified, consistent, and 

engaging customer experience, which has been enhanced 

by standardized training and tools. FSA’s website—

StudentAid.gov—continues to be customers’ single front 

door on the web. FSA continues to enhance its modern selfservice and consumer information tools that help customers 

understand the aid they have received, their remaining 

eligibility, for what loan forgiveness programs they may be 

eligible, and how they can manage loan repayment in a way 

that meets their goals.

Some of FSA’s Digital and Customer Care (DCC) 

tools include the Federal Student Aid Estimator, Loan 

Simulator, Aidan Virtual Assistant, and a Public Service 

Loan Forgiveness (PSLF) help tool. In FY 2022, FSA 

launched Medallia, a new survey tool, that allows FSA to 

use customers’ feedback to better serve them, and FSA 

retired the myStudentAid mobile app due to low usage. In 

FY 2022, FSA also enhanced the PSLF Help Tool to reflect 

program changes as a result of the limited PSLF waiver 

the Department announced. FSA enhanced resources and 

tools to help borrowers prepare for student loan payments 

to restart after the COVID-19 payment pause ends. FSA 

also updated the income-driven repayment (IDR) plan 

application to allow borrowers to self-certify income 

and better streamline the application process, as well as 

updated its virtual assistant to answer more IDR planrelated questions.

Customers now are getting questions answered through 

contact centers staffed by Next Gen Business Process 

Operations (BPO) vendors, which the Department brought 

online in FY 2022 under enhanced cybersecurity standards. 

BPO is the personnel component of the Next Gen vision. 

These vendors manage millions of customer interactions, 

have been trained in a uniform way, and operate on a 

single contact center platform that will improve operational 

consistency, efficiency, and oversight. While managing 

customer and partner relations, BPO vendors:

• Deliver efficient and effective customer and 

partner experiences.

• Improve customer outcomes.

• Ensure compliance with consumer 

protections standards.

• Establish greater operational flexibility.

• Reduce operational complexity.

In FY 2022, FSA required customers who create a new 

account on StudentAid.gov to set up and use two-step 

verification, a commonly-used process where students, 

parents, and borrowers must provide two or more pieces 

of information to verify their identity to gain access to an 

application or digital resource. Two-step verification helps 

prevent cybercriminals from illegally obtaining student aid 

account information and credentials used to access online 

tools, such as the Free Application for Federal Student Aid

(FAFSA®), PSLF Help Tool, and Loan Simulator. The 

Department’s actions meet the requirements—in Executive 

Order 14028 - Improving the Nation’s Cybersecurity—to 

implement multi-factor authentication.

Next Gen remains deeply committed to improving the FSA 

experience for partners as well as customers. In FY 2022, 

FSA introduced an enhanced, modernized National Student 

Loan Data System (NSLDS®) Professional Access website 

for the institutions and other partners that administer the 

federal student aid programs. The updated site is more 

secure and easier to navigate. The site also improves the user 

experience, eliminates the need for users to toggle between 

systems to see students’ grant information, and simplifies 

the process to download most reports.

The FSA Partner Connect website, fsapartners.ed.gov, 

consolidates the tools that partners use regularly onto 

a single digital platform that streamlines operational 

information by award year, provides notifications related to 

a partner’s specific school activities, tracks scheduled system 

outages, and more. FSA Partner Connect also reduces the 

administrative burden on financial aid professionals at 

more than 5,600 postsecondary schools around the globe, 

allowing them more time to serve students. FSA’s future 

plans for the Partner Connect site include replacing the 

legacy Postsecondary Education Participants System (PEPS) 

and redesigning the Application for Approval to Participate 

in the Federal Student Financial Aid Programs (E-App).

In FY 2022, FSA posted the solicitation for its long-term 

loan servicing solution, the Unified Servicing and Data 

Solution (USDS). Currently, six federal loan servicers (i.e., 

legacy loan servicers) support borrowers first while they are 
FY 2022 AGENCY FINANCIAL REPORT 41 U.S. DEPARTMENT OF EDUCATION

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S ( U N A U D I T E D ) 

in school and in loan repayment. Each legacy loan servicer 

operates under its own brand and has its own website and 

self-service tools for customers. This disjointed servicing 

system is often confusing for borrowers, and they are 

understandably frustrated when they receive inconsistent 

information about something as important as their student 

loans. The overarching goals of the USDS are to:

• Provide all federally managed borrowers with complete 

account management capabilities on StudentAid.gov.

• Increase servicer accountability to reduce loan 

delinquencies and defaults and other customer service 

benchmarks through clear, measurable service-level 

agreements and performance incentives.

• Allow FSA to collect more and better data from legacy 

loan servicers to improve account transfers, borrowers’ 

access to information, and FSA’s ability to monitor 

servicer performance.

• Bring legacy loan servicers up to enhanced 

cybersecurity standards.

To maintain the stability of the loan servicing environment, 

FSA expects to award new loan servicing contracts through 

the USDS and ensure that USDS vendors are compliant 

with modern cybersecurity standards before the legacy loan 

servicing contracts expire in December 2023. Through the 

USDS solicitation, FSA will award contracts to multiple 

loan servicers who will help guide more than 35 million 

student loan borrowers with federally managed loans 

through successful repayment.

LEVER AGING DATA AS A 

STRATEGIC ASSET

The Department continues to focus on leveraging its data 

as a strategic asset by further implementing requirements 

in the Foundations for Evidence-Based Policymaking Act 

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

Strategy. The Department has implemented efforts 

to strengthen data governance while overseeing the 

unprecedented investment in students and schools through 

the Education Stabilization Fund, created and subsequently 

augmented through the triad of COVID relief laws. This 

section highlights five areas guiding the Department 

towards realizing the power of data in daily operations and 

national policy: (1) the ED Data Strategy; (2) Open Data; 

(3) the Education Stabilization Fund Transparency Portal; 

(4) Data Quality; and (5) the ED Learning Agenda.

The Department’s Data Strategy

The FY 2020 Action Plan for the Federal Data Strategy called 

for agencies to “put in place a data strategy or road map,” 

and in December 2020, the Department completed and 

published its inaugural Data Strategy. The Department’s 

Data Governance Board (DGB) guided the development 

of four goals—to strengthen agency-wide data governance, 

build human capacity to leverage data, advance the strategic 

use of data, and to improve data access, transparency, and 

privacy. The Office of the Chief Data Officer (OCDO) led 

agency-wide working groups composed of representatives 

of each principal office to develop 19 objectives and a 

multi-year action plan to guide implementation throughout 

FY 2021 and FY 2022. 

December 2021 marked the completion of the first year 

implementing the Department’s Data Strategy and 

executing its priority goals and objectives designed to realize 

the full potential of data to drive decision-making and 

support our nation’s students. Building on progress made in 

FY 2021, the DGB and OCDO coordinated across principal 

offices of the Department in FY 2022 to implement data 

governance policies, strengthen data management functions, 

launch an agency data literacy program, conduct research for 

a data privacy playbook, improve our data quality approach, 

and more. 

More specifically, in FY 2022, OCDO recommended 

improvements to the management of data-related 

investments through the Department’s capital planning 

process, to support Goal 1 of the Data Strategy, 

documenting the current state and target state, with an 

implementation plan for Quarter Four of FY 2022. The 

agency also continued exemplary progress in Goal 2 

with the implementation of a suite of new curricular 

opportunities for Department staff to enhance their data 

competencies and skills, continued internal outreach 

and advocacy through weekly and monthly data skill 

engagements and principal office-specific sessions, 

and a focus on cross-agency engagement to share the 

Department’s leading-edge work in this space. 

As evidence of the impact and effectiveness of these efforts to 

instill a data centric culture throughout the Department, in 

early FY 2022, the DGB completed a review of the FY 2021 

Agency Data Maturity Assessment (DMA), in which 93% 

of ED’s principal offices improved their data maturity from 

FY 2020. This analysis of the DMA further informed the 

DGB’s priorities for FY 2022, which include a focus on data 

management strategies and oversight as well as data quality. 

ED’s pioneering work in the Data Maturity arena was 

highlighted in a Partnership for Public Service issue brief as an 

example for other federal agencies to emulate. 
FY 2022 AGENCY FINANCIAL REPORT 42 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

Finally, OCDO and the DGB have commenced an analysis 

to gauge the progress and accomplishments rendered through 

ED’s inaugural Data Strategy with the goal of publishing by 

early FY 2023 the agency’s Data Strategy version 2.0 to guide 

and inform efforts throughout FYs 2023, 2024, and 2025. 

Open Data

Improving access to Department data, while maintaining its 

quality and confidentiality, is key to expanding the agency’s 

ability to generate evidence to inform policy and program 

decisions. Increasing access to data for Department staff, 

federal, state, and local lawmakers, and researchers can 

help the Department to make new connections and foster 

evidence-based decision making. 

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

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

initial population of public data profiles. A central repository 

for Department data assets, ODP is a fully featured, 

robust, and highly scalable data repository that maintains 

all data assets in a fully searchable catalog. As required 

by the Evidence Act and guided by Data Strategy Goal 4, 

throughout FY 2022, the Department continued to advance 

towards a comprehensive data inventory by further expanding 

on the ODP; increasing its catalogued data assets for both 

externally available open data and internal sources subject to 

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

growing the number of Department open data assets listed in 

the Federal Data Catalogue. 

The ODP significantly improves the Department’s ability to 

grow and operationalize its comprehensive data inventory 

while progressing on open data requirements. In FY 2022, 

OCDO and the National Center for Education Statistics 

(NCES) worked to catalogue and consolidate NCES 

data sets to the comprehensive data inventory. The data 

inventory will become significantly more comprehensive 

when that consolidation has been completed later in 

FY 2022. Additionally, the Open Data Platform has been 

enhanced to provide principal office data stewards with 

login.gov access as well as improved upload and meta data 

entry interface that will simplify growing and maintaining 

the comprehensive data inventory. 

Finally, while guidance related to the consistent 

implementation of Title II of the Evidence Act remains 

unpublished by OMB and the 2022 Federal Data Strategy 

Action Plan has yet to be released to agencies, the Department 

remains committed to publishing and executing the Act’s 

required open data plan by the end of FY 2022. Collectively, 

the Department remains at the forefront of federal agencies 

in realizing the requirements of the Open, Public, Electronic 

and Necessary Government Data Act (OPEN) (Title II of the 

Evidence Act), and the ODP is leading example of how the 

Department is making its data open by default. 

Education Stabilization Fund Public 

Transparency Portal

Launched publicly in the first quarter of FY 2021, 

the Education Stabilization Fund (ESF) Transparency 

Portal (Portal), located at covid-relief-data.ed.gov, is 

the Department’s website dedicated to collecting and 

disseminating data and information about the ESF programs 

managed by the Department and authorized through the 

Coronavirus Aid, Relief, and Economic Security (CARES) Act, 

Coronavirus Response and Relief Supplemental Appropriations 

(CRRSA) Act, and the American Rescue Plan (ARP) Act. 

The Portal provides decision-makers, parents, students, 

teachers, education leaders, and taxpayers with information 

about ESF programs and discloses how states, districts, 

and institutions of higher education (IHEs) spent COVID 

relief funds. The funding data is from public data sources 

and reflects data collected by the Department and data 

released or shared by other federal agencies, including the 

General Services Administration, and the Department of 

the Treasury. The Portal enables state and IHE grantees to 

submit annual performance reports on funding authorized 

through the ESSER, GEER, EANS, and HEER Funds, 

providing the public and decision makers fuller insight into 

the expenditures and usage of ESF program funds. 

Throughout FY 2022, the Department executed several 

enhancements to the Portal which improved transparency 

and increased accountability. For example, in FY 2022, the 

Office of Elementary and Secondary Education (OESE) 

collaborated with OCDO to include state level award and 

expenditure data for the Emergency Assistance to NonPublic Schools (EANS) program authorized through the 

ARP Act. This feature was in addition to a cyclical monthly 

refresh of award and expenditure data for all ESF programs 

as disclosed on USAspending.gov and subsequently 

published to the Portal. 

OCDO, in coordination with OESE and the Office of 

Postsecondary Education, also developed and published 

the Year 2 Annual Performance Report (APR) forms for 

the ESSER, GEER, and HEER Fund programs and Year 1 

APR form for the EANS program. This involved the review 

and adjudication of hundreds of public comments and the 

training on the APR form requirements via webinars for 

grantees of each of the four main ESF programs featured on 

the Portal. ESSER and GEER grantees were also afforded 

the opportunity to submit corrections to improve the 

quality of their now final Year 1 APR data submissions 

documenting usage of CARES Act funds. Collectively, the 

enhanced level of technical assistance provided to ESF grant 
FY 2022 AGENCY FINANCIAL REPORT 43 U.S. DEPARTMENT OF EDUCATION

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S ( U N A U D I T E D ) 

recipients in FY 2022 supports the Department’s efforts 

to improve the quality and accuracy of the data it receives 

from ESF grantees on the expenditure and use of funding 

under CARES, CRRSA, and ARP Acts. 

Beginning in quarter three of FY 2022, the Department 

commenced collection of Year 2 APR data for the ESSER, 

GEER, and HEER Fund grantees and Year 1 data for 

EANS prime grantees through the Portal. The Department 

anticipates publishing the near 5,000 APRs collectively 

received across the four main ESF programs represented on 

the Portal in the first quarter of FY 2023. An exemplar of 

open, transparent data, the Portal is fully responsive to the 

mandate in the OPEN Government Data Act (Title II of 

the Evidence Act) to make public data open and accessible. 

Data Quality

The Department, states, and schools must have effective 

controls to ensure that reported data are accurate, reliable, 

and accessible to improve the use of that data at the 

Department and in the education community. However, 

the Department’s program offices have historically 

had varying levels of data quality control among their 

data sets, and findings from the 2023 Office of Inspector 

General’s Management Challenges Report citing a lack 

of overall integrity and persistent weaknesses in the data 

quality and reporting it receives from grantees provide 

further evidence that a comprehensive strategy is warranted.

The ED Data Strategy Objective 1.5 calls for the 

Department to “Implement a cohesive data quality 

approach for the agency, leveraging best practices, technical 

assistance, and controls.” Building on efforts launched 

in previous fiscal years, the Department has continued 

to refine and execute components of a multi-pronged 

approach to address root causes and improve data quality. 

Executing initially with grantees participating in ESF 

programs, such actions throughout FY 2022 have included 

ensuring grantees are aware of their data responsibilities 

under the conditions of their grants and of the credible 

consequences for noncompliance, ranging from additional 

informal monitoring through termination of the grant. 

Resources and technical assistance have also been levied to 

improve the varying capacity of grantees in reporting data 

and varying capacity among Department staff in reviewing 

grantee-reported data. 

As monitoring program performance remains a key motive 

for improving data quality, improving the development, 

reporting, and use of the agency’s programs’ performance 

and accountability measures remains a focus for the 

Department as well (Data Strategy Objective 3.4). The 

focus throughout FY 2021 and into FY 2022 has been 

the review of the Government Performance and Results 

Act (GPRA) lifecycle with agency stakeholders. The 

Department’s work has included drafting a framework for 

review of performance measures that support evidencebased decisions, incorporating budget guidance for 

programs, the development of a data quality review 

checklist for performance measures, and identifying 

opportunities to review the work during the Information 

Collection Request process. 

The Department has continued to work on developing 

data quality controls for each stage of the data lifecycle, 

including mechanisms for evaluating, preventing, and 

remediating data irregularities to assure higher quality data 

for the agency to use in meeting its mission and strategic 

objectives. To help further this goal, in FY 2022, the 

Department completed and published in October 2023, 

a Data Quality Playbook, outlining authorities, tools, and 

resources for grant program managers. The playbook helps 

grant program managers assess and improve data quality 

before submission, proposes meaningful incentives for data 

submitters, strengthens communication strategies, and 

proposes ways to reduce the burden on both Department 

staff and grantees. The playbook provides guidance for 

strengthening the agency’s data quality standards to help 

reduce data quality issues and improve data interoperability. 

It also builds common language for discussing data quality 

with internal and external stakeholders and provides 

recommendations for handling common irregularities. 

Other critical initiatives planned for implementation 

in FY 2022 and start of FY 2023 include updating the 

Department’s Information Quality Act (IQA) Guidelines and 

the establishment of data quality plans as a component in 

early stages of the data collection (and investment lifecycle). 

To better align with updated expectations from the Office of 

Management and Budget (OMB M-19-15), the Evidence Act, 

as well as organizational need, the Department plans to revise 

its IQA Guidelines to provide clearer guidance to the public 

(and Department staff) about data quality requirements, 

processes, and appeals. The Department will also be placing a 

stronger emphasis on the establishment and transparency of 

data quality plans in advance of data collection or creation, to 

ensure appropriate levels of resourcing are provided to ensure 

data are fit for purpose. 

The Department’s Learning Agenda 

The Department’s FY 2022–FY 2026 Learning Agenda was 

published in July 2022, in conjunction with the release of 

the Department’s Strategic Plan. The Learning Agenda is 

aligned to the Department’s goals and strategic objectives, 

reflecting the Secretary’s priorities for the Department over 
FY 2022 AGENCY FINANCIAL REPORT 44 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

the next four years. The Learning Agenda is complemented 

by an Annual Evaluation Plan. The Annual Evaluation 

Plan includes a listing of the Department’s most significant 

evaluation activities in a given fiscal year. All Evidence Act 

deliverables are located at https://www.ed.gov/data. 

The Learning Agenda was developed in consultation with 

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

ELG is co-chaired by the Department’s Evaluation Officer 

and the Director of the Department’s Grants Policy Office 

(GPO) and includes members from the Department’s 

primary grant-making offices as well as mission-support 

units, such as the Department’s Budget Service, and Office 

of General Counsel, and ex-officio representatives from the 

Office of the Chief Data Officer, the Statistical Official, 

and the Performance Improvement Officer. Feedback 

from OMB and consultation with stakeholders across 

government, education, and the general public, was also 

used to inform the Department’s Learning Agenda. 

In addition to advising the Evaluation Officer on the 

development of the Learning Agenda, the ELG advises 

Department leaders on how to support the capacity of 

Department staff to make better use of data and evidence. 

The GPO, led by the ELG co-chair, continues to spearhead 

a range of internal training opportunities for Department 

staff to bolster the use of the Secretary’s policy priorities, 

including the use of evidence in program design, and to 

consider how the Department’s grantmaking activities can 

build evidence for improvement in the future. 

CONTINUOUS IMPROVEMENT

Improving critical infrastructure, systems and overall 

capacity, and ensuring sound strategic decision-making 

regarding allocation of resources are essential to the 

Department’s future progress and success. Implementing 

the new G6 modernization is one of the Department’s 

key initiatives.

G5 Modernization/G6 

The G5 modernization project is an initiative that started 

in 2019 to develop a new grants management system that 

will support the Department’s grant programs and the 

broader grants community. G6 is the modernized system 

that will replace G5, allowing users to apply, track, and 

manage all grants through an improved user experience. It 

will modernize and consolidate existing business processes 

and manual workarounds into one platform and streamline 

the grants management lifecycle, improving oversight 

and monitoring. 

Project Objectives 

The Department’s Grants Management System, G5, is 

a custom-built, full life cycle grants management and 

payment system that has reached the end of life. Despite 

years of ongoing G5 maintenance, stakeholders continue to 

identify concerns regarding the system’s functionality and/

or ease of use. The Department’s current grant processes 

rely on multiple systems utilizing various technologies. 

Much of the data is duplicated, there is a lack of visibility, 

and there are ad-hoc workarounds. 

To effectively address the needs of all users, the Business 

Systems Support Division within the Office of Finance 

and Operations initiated the G5 Modernization Initiative 

to replace G5 and implement a state-of-the-art grants 

management system. The objective of this program is to 

implement an enterprise-wide grants management platform 

that achieves the following objectives: 

1. Improved effectiveness of grant programs by 

streamlining grant processes, tools, and 

technology agency-wide.

2. Enhanced and modularized grants platform

with superior customer experience using industry 

best practices. 

3. Reduced cost by minimizing disjointed grants 

systems, lowering maintenance, and reducing 

paper. 

4. More informed decision-making by Program 

Offices by utilizing advanced analytics and 

collaboration tools. 

5. An evergreen platform capable of easily 

incorporating future technology advancements 

and compliance requirements.

System Components 

The “system” consists of two main components. 

• Education Grants Platform (EGP). The EGP 

will serve as the foundation for the entire Grants 

Segment Portfolio of Systems. The EGP, implemented 

as a “Platform of Platforms,” will house Grants 

Management functionality and capabilities needed 

across the Department. The EGP, depicted below, is 

a grants platform that incorporates Infrastructure as a 

Service provided by Amazon Web Services, Platform 

as a Service provided by Red Hat OpenShift, and a 

host of Software as a Service and traditionally deployed 
FY 2022 AGENCY FINANCIAL REPORT 45 U.S. DEPARTMENT OF EDUCATION

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tools that establish a framework for advanced analytics, technology development, and data integration for improved grant 

operations. Over time, the EGP will be used to both develop and host the Department’s grants ecosystem (technology and 

services). G6 is considered the nucleus of the EGP. 

• G6. The Department’s grants modernization initiative will implement an incremental modern, modular, and secure 

application that segments the grants process into granular modules using microservices that are interdependent, yet 

autonomous enough to be maintained separately. Managing the end-to-end grants process, G6 will combine state-ofthe-art Interactive Experience and Customer Experience frameworks to provide users with a cognitive grants experience 

powered by Artificial Intelligence, Natural Language Processing, and advanced analytics.

Agile Development 

The Grants Modernization Initiative is developing G6 

through a user-centered and incremental approach 

using the Agile methodology over multiple years. The 

subsequent years will be used to roll out G6 capabilities 

in an incremental manner to production and retire the 

corresponding capabilities from the legacy G5 system. 

As functionality is built, groups of grant users will test 

and validate what is built prior to it being released in the 

system. OFO has facilitated multiple working groups, user 

research interviews, and outreach sessions that all keep 

stakeholders informed and include them in the planning 

efforts around development. 

G6 Capabilities 

G6 is being developed to execute the G5 business processes 

and functionality across the grant lifecycle. The G6 

system will: 

• Include all the Department’s core requirements. 

• Maintain an advanced security posture for the data 

and infrastructure.

• Utilize Advanced Business Intelligence and 

Collaboration features to allow Program Officers 

to make more informed decisions with increased 

communication and visibility into data.

• Provide an intuitive user experience. 

The G6 system will have the following characteristics:

• Modular with the ability to turn off or restrict a module 

or sub-module as needed. 

• Based on an open architecture and OMB approved 

grant standards. 

• Built to ensure flexibility, adaptability, interoperability, 

and configurability. 

• Built using a modern technology stack that ensures the 

underlying technology components do not become 

outdated before reaching their end of life. 

• Mobile-enabled. 
FY 2022 AGENCY FINANCIAL REPORT 46 U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)

• Highly automated.

• Compliant with legislative changes. 

• Roles-based and rules-driven. 

Timeline 

In Year 1 (FY 2022), the modernization program is 

implementing the EGP. 

Looking to Year 2 (FY 2023), the program will begin its 

first phase of the G5 modernization to G6. The team will 

implement the Pre-award phase of the grants’ lifecycle, 

including Planning and Scheduling, Applications, 

Application Packages (Grants.gov, Impact Aid, Fellowship), 

Discretionary Grants, Formula Grants, Loans, Application 

Technical Review Plan, and Review Process. These 

capabilities are identified based on what is available in the 

current G5; however, the Department expects that the 

implementation team shall design the G6 system with 

a much superior user experience using the industry best 

practices, human-centered design, and federal guidelines. 

The Department is planning for the development effort for 

the remaining years and capabilities. FY 2023 to FY 2025 

will be dedicated to Phases 2, 3 and 4 where we will migrate 

different modules to the new platform and decommission 

the corresponding modules from the legacy system, 

therefore stabilizing the G6. In FY 2026, we envision 

decommissioning the legacy G5 and moving into steady 

state G6.