United States Department of Education

Miguel A. Cardona, Ed.D. 

Secretary

Federal Student Aid

Richard Cordray

Chief Operating Officer

Finance Directorate

Richard Lucas

Chief Financial Officer

November 19, 2021

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

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

U.S. Department of Education, Federal Student Aid, Federal Student Aid: Fiscal Year 2021 

Annual Report, Washington, D.C., 2021.

This publication is available under Performance Reports located on the Federal Student Aid 

website at StudentAid.gov/strategic-planning-reporting. 

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

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

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

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

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

submit all questions and comments to AFRComments@ed.gov.
Fiscal Year 2021 Annual Report | Federal Student Aid i

Contents

Contents

Introduction ......................................................................iii

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

About This Report................................................................................................. viii

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

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

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

Fiscal Year 2021 Organizational Highlights........................................................... 4

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

Federal Student Aid by the Numbers ................................................................. 7

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

Mission ......................................................................................................... 9

Organizational Structure ................................................................................10

Mission, Vision, and Core Values .....................................................................11

Federal Student Financial Aid Programs ............................................................14

Performance Management.................................................................................... 19

Performance Management Processes at Federal Student Aid................................21

Agency Priority Goals.....................................................................................25

Quality of Performance Data ...........................................................................26

Analysis of Financial Statements......................................................................... 27

Introduction ................................................................................................. 27

Balance Sheet ..............................................................................................29

Statement of Net Cost ...................................................................................41

Statement of Changes in Net Position...............................................................42

Statement of Budgetary Resources ..................................................................42

Financial Management Highlights.....................................................................43

Analysis of Systems, Controls, and Legal Compliance ..................................... 44

Annual Performance Report (Unaudited) .........................47

Overview of the Annual Performance Report...................................................... 49

Introduction to the Annual Performance Report................................................. 50

Strategic Goals, Objectives, Performance Metrics, and Results....................... 51

Understanding the Performance Section ...........................................................56

Strategic Goal 1: Empower a High-Performing Organization ................................57

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

Parents, and Borrowers We Serve....................................................................65

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness .........85

Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards ..........94

Strategic Goal 5: Enhance the Management and Transparency of the Portfolio .....105

Fiscal Year 2021 Accomplishments of Federal Student Aid ............................ 121
ii Fiscal Year 2021 Annual Report | Federal Student Aid

Contents

Additional Required Reporting (Unaudited) ...................125

Overview of Additional Required Reporting...................................................... 127

Legislative and Regulatory Recommendations ................................................ 128

Annual Bonus Awards......................................................................................... 129

Report of the Federal Student Aid Ombudsman............................................... 130

Summary of All Cases Received in Fiscal Year 2021..........................................130

Activities of the Ombudsman ........................................................................141

Ombudsman Recommendations ....................................................................144

Financial Section............................................................147

Overview of the Financial Section...................................................................... 149

Financial Statements ........................................................................................... 150

Consolidated Balance Sheets ........................................................................151

Consolidated Statements of Net Cost .............................................................152

Consolidated Statements of Changes in Net Position.........................................153

Combined Statements of Budgetary Resources ................................................154

Notes to the Financial Statements ..................................................................... 155

Required Supplementary Information (Unaudited)........................................... 192

Independent Auditors’ Report ............................................................................ 199

Office of Inspector General Audit Transmittal ..................................................199

Independent Auditors’ Report .......................................................................201

Other Information (Unaudited)......................................213

Other Information................................................................................................. 215

Summary of Financial Statement Audit and Management Assurances..................215

Management Challenges ..............................................................................215

Payment Integrity .......................................................................................215

Appendices ....................................................................217

Appendix A: Performance Metrics and Target Changes .................................. 219

Appendix B: Data Validation and Verification Matrix........................................ 227

Appendix C: Glossary of Acronyms and Terms................................................ 243

Appendix D: Availability of the FSA Report ...................................................... 249
Fiscal Year 2021 Annual Report | Federal Student Aid iii

Introduction

Introduction
iv Fiscal Year 2021 Annual Report | Federal Student Aid

Introduction

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Fiscal Year 2021 Annual Report | Federal Student Aid v

Introduction 

Letter from the Chief Operating Officer of Federal 

Student Aid 

Dear Federal Student Aid Community: 

As the new Chief Operating Officer of Federal Student Aid 

(FSA), I am glad to present the Federal Student Aid Fiscal 

Year (FY) 2021 Annual Report that showcases FSA’s work. 

Our core mission is to enable the American dream for 

millions of Americans. This report details our efforts to 

enhance customer service, stimulate collaboration among 

stakeholders, advance operational efficiency, and invest in 

our internal and expanded workforce capability. 

For nearly six decades, the principles embodied in the 

Higher Education Act of 1965, have steered the United 

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

enable broader access to higher education. We have 

absorbed that objective in the spirit of the work we do every 

day at FSA. Notably, our motto is Keeping the Promise: 

Funding America’s Future, One Student at a Time. As a 

principal office of the Department, FSA ensures that all 

eligible students and families can access federal financial 

aid so they can gain the benefits of education and training beyond high school. 

I joined FSA in May 2021 with a background of six years as the director of the new Consumer 

Financial Protection Bureau, where I worked on many issues involving higher education policy 

and financing. It is now my great privilege to lead FSA, with all its important responsibilities to 

serve America’s students, parents, borrowers, and partners. Inevitably, I bring to this work my 

own focus and perspective on how government can perform better for the people we serve. 

Everyone who works at FSA shares the same goal to deliver the kind of high-quality customer 

experience that today’s students, families, and borrowers need, expect, and deserve. We will 

demand accountability and performance from ourselves and our partners, and we will bolster 

our oversight and enforcement of the law to deliver on these commitments. And we will do so, 

even as we continue to work through emergency conditions produced by Coronavirus Disease 

2019 (COVID-19). 

During FY 2021, FSA set its sights on improving Free Application for Federal Student Aid 

(FAFSA®) filing rates by high-school seniors, which has been an acute challenge in the face of 

the pandemic. For the past year, FSA has pressed for more high-school seniors and their 

families to complete the 2021–22 FAFSA form. Our efforts include outreach to individual states, 

counselors, mentors, and college access professionals on initiatives to improve FAFSA 

completion rates. Groups, such as our Digital Engagement and External Communication teams, 

helped raise public awareness about the importance of completing the FAFSA form. 

Richard Cordray 

Chief Operating Officer 
vi Fiscal Year 2021 Annual Report | Federal Student Aid

Introduction

The COVID-19 emergency persists today. Throughout this period, FSA has maintained its 

organizational productivity by shifting more resources and assistance online to serve students, 

families, and partner institutions. In FY 2021, FSA provided approximately $112.0 billion in

federal grants, loans, and work-study funds to more than 10.1 million students at approximately

5,600 participating postsecondary schools. FSA transformed challenges into opportunities, 

particularly as more than 1,400 FSA employees normally stationed in 11 offices around the 

country instead functioned entirely in a virtual work posture. 

While expanding access to higher education is fundamental to our mission, we also focus on the 

size and complexities of the federal student loan portfolio, which now surpasses $1.6 trillion.

This accumulated debt weighs heavily on many Americans and their families, and the decisions 

we make and execute in managing this portfolio will have lasting effects on their lives. We 

recognize the need to enhance our stewardship of the various programs, products, services, 

and operations that address the nation’s accumulated student loan debt. Just as access to 

higher education itself shapes people’s futures, so do the decisions we must make about the 

accumulated costs they bear from pursuing their educational programs.

FSA has also worked diligently to ensure that student loan servicers comply with the 

Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provisions for student loan 

relief and subsequent extensions. These provisions suspended loan payments, temporarily set 

the interest rate on all Department-held loans at 0%, and stopped collections on defaulted 

loans. In late FY 2021, the Department announced a final extension of the student loan payment 

pause through Jan. 31, 2022. At that point, the payment, interest, and collections pause will 

end, and the period of student loan repayment for millions of borrowers begins. FSA is currently 

engaged in an intensive readiness campaign to ensure borrowers and the public are aware of 

the coming changes, as well as preparing for the heavy service demands that are expected to 

accompany the resumption of payments.

In FY 2021, FSA worked to improve customer service with an enhanced user experience, 

proactive partner engagement, and streamlined organizational capabilities. These efforts require 

innovative planning, including implementation of the ongoing Next Gen Federal Student Aid 

(Next Gen FSA) initiative that is designed to deliver intuitive, self-service tools for students, 

parents, and borrowers, including a new primary website for customers at StudentAid.gov. 

Among the new and improved customer tools that we rolled out are:

• expanded access to FSA’s virtual assistant, Aidan®;

• an update to Loan Simulator that incorporates CARES Act flexibilities for borrowers;

• a redesigned entrance and exit counseling, and Borrower Defense to Repayment

Application, in Spanish;

• a redesigned Annual Student Loan Acknowledgment (Acknowledgment) tool featuring

easy-to-understand learning modules and a tailored experience for students and

parents; and

• improvements to the myStudentAid mobile app with a variety of new features.

FSA seeks to be the most trusted source of information about federal student aid. We do that by 

promoting transparency, accountability, and proactive assistance. For instance, in FY 2021, 
Fiscal Year 2021 Annual Report | Federal Student Aid vii

Introduction

FSA adjudicated approximately 65,500 borrower defense applications and closed 91% of 

outstanding Freedom of Information Act requests. 

FSA conducts oversight, enforcement, and compliance of the postsecondary schools that 

participate in the federal student aid programs, but also recognizes the importance of finding 

ways to help schools successfully administer the federal student aid programs. In FY 2021, we 

fulfilled our oversight responsibilities by resolving more than 1,700 deficient audits and flagged 

financial statements, and processing more than 5,000 eligibility-related actions, including 

recertification applications. Additionally, FSA has reduced the number of outstanding Program 

Reviews. In FY 2021, we issued more than 320 Program Review Reports and Final Program 

Review Determinations to institutions and third-party servicers subjected to a program review. 

Through Project Success, FSA worked to improve student retention, graduation, and cohort 

default rates at more than 247 minority-serving institutions. These services, which are provided 

by guaranty agencies without additional charge to participating schools, include tools, programs, 

and other resources that seek to help students increase their financial literacy and achieve their 

higher education goals. FSA is also committed to continuing its work beyond Project Success to 

provide robust regulatory training and technical assistance to minority-serving institutions.

During FY 2021, FSA continued to implement the Federal Student Aid: Strategic Plan, Fiscal 

Years 2020–24, which is our road map for improving our programs, products, services, and 

operations. The plan fully reflects our commitment to serve our customers and partners even 

better while also meeting all new and existing requirements.

I invite you to review the entire report to appreciate what FSA achieved in FY 2021, and to gain 

a better sense of what lies ahead for our students, our borrowers, and their families. 

Sincerely,

Richard Cordray

Chief Operating Officer

Federal Student Aid

United States Department of Education

November 19, 2021
viii Fiscal Year 2021 Annual Report | Federal Student Aid

Introduction

About This Report

FSA, a principal office of the U.S. Department of Education (the Department), is required by 

legislation to produce an annual report, which details the organization’s fiscal year financial and 

program performance. The Federal Student Aid FY 2021 Annual Report (Annual Report) is a 

comprehensive document that provides an analysis of FSA’s financial and program 

performance results for FY 2021 and exhibits the organization’s effectiveness in accomplishing 

its mission. The Annual Report enables the President of the United States, the U.S. Congress

(Congress), and the public to assess the organization’s performance relative to its mission and 

determine whether FSA has demonstrated accountability for the resources entrusted to it.

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

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

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

Execution of the Budget, Part 6, Section 260 (OMB Circular A-11), and Circular A-136, Financial 

Reporting Requirements (OMB Circular A-136). The report also satisfies the requirements 

included in the following federal statutes:

• Higher Education Act of 1965, as amended

• Federal Managers’ Financial Integrity Act of 1982

• Chief Financial Officers Act of 1990

• Federal Credit Reform Act of 1990

• Government Performance and Results Act of 1993

• Government Management Reform Act of 1994

• Federal Financial Management Improvement Act of 1996

• Reports Consolidation Act of 2000

• Improper Payments Information Act of 2002, amended

• Government Performance and Results Modernization Act of 2010

• Improper Payments Elimination and Recovery Act of 2010

• Improper Payments Elimination and Recovery Improvement Act of 2012

• Payment Integrity Information Act of 2019

The Department produces the U.S. Department of Education FY 2021 Agency Financial 

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

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

The Annual Report is available at StudentAid.gov/strategic-planning-reporting.
Fiscal Year 2021 Annual Report | Federal Student Aid ix

Introduction

Overview of the Federal Student Aid Annual Report 

The Annual Report is organized into the following sections: 

Management’s Discussion and Analysis

This section provides an overview of the Annual Report and includes 

forward-looking information, the mission and organizational structure, 

performance management details, financial management highlights, 

and a discussion of FSA’s systems, controls, and compliance with 

laws and regulations. 

Annual Performance Report

This section discusses the strategic goals included in the Federal 

Student Aid: Strategic Plan, Fiscal Years 2020–24 (FY 2020–24 

Strategic Plan), its strategic objectives, performance metric results, 

and fiscal year accomplishments. 

Additional Required Reporting

This section includes the additional reports specifically required by the 

Higher Education Act of 1965, as amended (HEA). 

Financial Section

This section includes the audited financial statements and

accompanying notes, required supplementary information, and the 

Independent Auditors’ Report. 

Other Information

This section includes a summary of the financial statement audit, links 

to the summary of management assurances and FSA’s Management 

Challenges in the AFR and Payment Integrity Information Act reporting 

details. 

Appendices

This section includes the discontinued or revised items of the 

FY 2020–24 Strategic Plan, the data validation and verification of 

performance information, the glossary of acronyms and terms, and the 

availability of the Annual Report. 
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Introduction

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Fiscal Year 2021 Annual Report | Federal Student Aid 1

Management’s Discussion and Analysis

Management’s Discussion and Analysis

(Unaudited)
2 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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Fiscal Year 2021 Annual Report | Federal Student Aid 3

Management’s Discussion and Analysis

Overview of Management’s Discussion and Analysis

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

the following subsections: 

• Fiscal Year 2021 Organizational Highlights: Fiscal Year 2021 Organizational

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

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

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

presentation of Federal Student Aid by the Numbers.

• Mission and Organizational Structure: Mission and Organizational Structure provides

the history of FSA; its mission, organizational structure, vision, and core values. The

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

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

strategic planning and performance management framework. This subsection includes

an overview of the FY 2020–24 Strategic Plan, a discussion of the agency priority goals

and the quality of FSA’s performance data.

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

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

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

and the limitations of financial statements.

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

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

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

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

regulations related to the compliance of financial systems with federal requirements.
4 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Fiscal Year 2021 Organizational Highlights

Looking Forward at Federal Student Aid

In FY 2021, FSA adapted to major shifts in administrative priorities while simultaneously 

managing the impact of the COVID-19 national emergency on the Title IV of the Higher 

Education Act of 1965, as amended (Title IV) Programs. All FSA stakeholders, from students to 

institutions, have required a heightened level of federal engagement to assist them with the 

challenges of the present moment. In response to this unprecedented time, FSA advanced its 

capabilities to meet the needs of an evolving digital environment while working to provide better 

service to students and borrowers, including improving the performance framework associated 

with loan servicing. In FY 2022, it will be essential for FSA to continue to focus on the major 

goals in customer service, institutional oversight, cybersecurity, and portfolio management 

within the FY 2020–24 Strategic Plan. 

The FSA strategic plan is guided by the most important aspect of FSA’s mission—the student. 

The costs and complexity associated with attending a postsecondary institution can make it 

difficult for students and families to navigate the financial aid programs, thereby underscoring

the need for proactive assistance and guidance. For this reason, FSA will place an emphasis on 

increasing customer knowledge about the Free Application for Federal Student Aid (FAFSA®) 

and the associated application periods. By providing timely information and technical assistance 

on the FAFSA form to students, parents, school counselors, college access professionals, and 

others, FSA will support FAFSA form completion for this academic year and beyond. Consistent 

with the Administration’s overall effort, the FAFSA form will continue to serve as FSA’s primary 

vehicle to increase access to postsecondary education for current and future students in 

America. 

In conjunction with communication efforts regarding the FAFSA form, the StudentAid.gov

website and myStudentAid mobile app have been enhanced to further support customers. The 

updates released in FY 2021 improved FSA’s digital engagement by expanding the features 

and capabilities of the technology that allowed students, parents, and borrowers to gain insight 

into its program and take action throughout the student aid lifecycle. The significance of the 

enhancements to the digital products is that they were driven by customer feedback. During the 

year, FSA conducted a series of customer listening sessions to gather data reflective of

customer issues and behavior. This information was utilized to inform operational changes and 

improve customer satisfaction. 

The customer-centric approach will extend to FSA’s work in FY 2022 and beyond. Prior to the 

close of the fiscal year, FSA procured a customer feedback management tool that will allow it to 

deploy numerous surveys across its digital contact center and communications channels 

beginning in the first quarter of FY 2022. FSA’s team will have the ability to review open-ended 

feedback, including survey comments, social media mentions, and complaints to identify trends 

and insights. This tool will be an important addition to the communication and operational 

strategy FSA must execute to effectively manage the successful return to repayment for the 

millions of borrowers it serves.

The final extension to the CARES Act benefits occurred in August 2021 and will end on 

Jan. 31, 2022. With the fiduciary responsibility for the entire federal student loan portfolio, FSA 
Fiscal Year 2021 Annual Report | Federal Student Aid 5

Management’s Discussion and Analysis

fully understands the necessity for a transition that minimizes errors and negative impacts to 

borrowers due to confusion, lack of awareness, and insufficient servicing capacity. To 

accomplish this goal, FSA has established a comprehensive return to repayment plan that 

includes borrower communications, programs to reduce delinquency, operational improvements 

to meet customer service expectations, and robust monitoring and oversight. 

To raise awareness about FSA resources, information, and repayment options, FSA has 

initiated communication with borrowers about the upcoming return to repayment. The 

organization has also developed a secondary email campaign, Targeted Early Delinquency 

Intervention (TEDI), to mitigate delinquency. Through TEDI, FSA will communicate with 

borrowers when they miss payments and will send positive feedback to high-risk borrowers 

when they make payments. In FY 2022, FSA will continue to refine its analytics and models in 

TEDI to enhance the effectiveness of its communications to borrowers.

FSA’s loan servicing partners are integral to the success of the return to repayment plan, but the 

world of servicing federal student loans is changing rapidly. As FSA collaborates with its

servicers in the development of detailed outreach strategies to mitigate risks relating to the end 

of the administrative forbearance period, it must also support the transition of borrowers to new 

servicers. FSA and borrowers both expect loan servicers to provide exceptional customer 

service, which includes prompt answering of incoming calls, support to manage different 

payment options, and expedited resolution of borrower questions. In this transition process, FSA 

will impose new levels of oversight and accountability for the long-term benefit of its borrowers. 

Many loan servicers improved their capability in FY 2021, adding features such as integrated 

voice response, automated call back, and chat bots to handle inbound contacts. These features 

were accompanied by the development of performance benchmarks to be executed as part of 

student loan servicer agreements in FY 2022. These agreements will improve loan servicer 

quality, accuracy, and speed. Upon the resumption of payments, FSA will monitor loan servicer 

systems and offer adjustments and improvements as needed. This effort will positively impact 

the servicer’s ability to handle the expected increase in incoming calls and customer service 

needs. The following are the outcomes the organization hopes to achieve over the course of the 

fiscal year:

• Stand up Business Process Operations (BPO) for non-servicing contact center and 

default collections work. 

• Secure servicer contract extensions and maintain capacity while incorporating new 

performance and accountability metrics. 

• Transition customer accounts to new servicers with low volumes of complaints and 

errors. 

• Establish and execute a long-term approach to servicing the federal student loan 

portfolio. 

• Provide easy access to Auto-Debit and Income-Driven Repayment options and increase 

borrower participation in both programs. 

FSA’s responsibility for both collaboration and oversight are not limited to loan servicing 

partners, as it engages Institutions of Higher Education (IHEs) and other financial aid 

stakeholders on behalf of students, parents, and borrowers. In FY 2022, FSA plans to reimagine
6 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

supervision and program reviews of schools to focus on heightened vulnerabilities and bolster 

the effectiveness of oversight, enforcement, and collections. The organization will work diligently 

to mitigate risks that institutions pose to students and taxpayers through the management of 

regulations including Borrower Defense to Repayment (Borrower Defense), Closed School 

Discharge, False Certification Discharge, and Jeanne Clery Disclosure of Campus Security 

Policy and Campus Crime Statistics Act (Clery Act) compliance. FSA will share information 

publicly about its school oversight activities to increase transparency in its efforts, provide 

guidance regarding acceptable conduct, and deter misconduct by schools participating in Title 

IV programs.

In FY 2021, FSA launched the FSA Partner Connect (Partner Connect) website at 

fsapartners.ed.gov to further advance oversight and compliance. This online portal is being 

used by financial aid professionals at approximately 5,600 postsecondary schools around the 

globe, as well as by other partners, such as guaranty agencies, federal loan servicers, and 

school third-party servicers. The new interface will consolidate the tools that partners use 

regularly onto a single digital platform. The FSA legacy systems that support institutional 

oversight are also being upgraded within the Partner Connect platform in FY 2022. 

Institutional oversight is aligned with FSA’s obligation to protect borrowers and their families 

from beginning to end. Throughout the fiscal year, FSA has engaged with schools to ensure 

these institutions took the actions needed to protect Title IV data. This engagement has led to 

positive outcomes in the development of cybersecurity safeguards to reduce risk to student 

data. FSA will continue working with institutions in FY 2022 on implementing the President's 

Executive Order 14028 on Improving the Nation's Cybersecurity issued on May 12, 2021, to 

advance the cybersecurity posture of institutions through the establishment of information 

security standards.

FSA must also ease the burden associated with applying for and receiving aid. The Student Aid 

& Borrower Eligibility Reengineering (SABER) initiative is the coordinated effort to consolidate 

and align the implementation of two important pieces of legislation: the Fostering Undergraduate 

Talent by Unlocking Resources in Education (FUTURE) Act and the Free Application for 

Federal Student Aid (FAFSA) Simplification Act. The implementation of both the FUTURE Act

and FAFSA Simplification Act will dramatically change the way students and families engage 

with FSA’s financial aid program. As FSA assists customers in transitioning back into a positive 

repayment posture at the close of the administrative forbearance period, it will be imperative 

that the provisions associated with these Acts become fully implemented. Through these efforts, 

loan servicing will be further enhanced as customers experience a highly secure system that

allows them to automatically share their federal tax information in a direct and more efficient 

way. 

Implementation of the legislation under the SABER initiative will not only ease the process of 

applying for student aid but also better enable borrowers to access affordable, income-driven 

repayment options. In addition, the strengthened income verification process will assist FSA in 

facilitating high-quality customer outcomes for the more than 43 million student loan borrowers 

within the loan servicing program. The SABER initiative will also protect the personally 

identifiable information (PII) of approximately 75 million students and parents who have utilized 

financial aid for postsecondary education. When coupling the SABER initiative with the strides 

FSA is making in digital communication via the tools offered on StudentAid.gov, FSA will be 

able to provide an improved level of customer service at all points throughout the student aid 

lifecycle during this most critical period in FSA’s history.
Fiscal Year 2021 Annual Report | Federal Student Aid 7

Management’s Discussion and Analysis

Federal Student Aid by the Numbers

Figure 1: FSA Net Outlays1

FY 2017–21 

Figure 2: FSA Administrative Budget

FY 2017–21

Figure 3: FSA Student Loan Portfolio2

FY 2017–21

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

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

2 The amounts in Figure 3 include both lender-held FFEL loans and School-held Perkins loans.
8 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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

FY 2017–21

Figure 5: Total Federal Student Aid Delivered

FY 2017–21

Figure 6: FSA Federal Employees3

FY 2017–21

3 Number of employees listed is as of September 30 of each fiscal year.
Fiscal Year 2021 Annual Report | Federal Student Aid 9

Management’s Discussion and Analysis

Mission and Organizational Structure

Mission

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

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

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

federal student financial assistance programs authorized under the HEA. Specifically, Title IV of 

the HEA authorizes the federal student assistance programs for which FSA is responsible. 

These programs provide grants, loans, and work-study funds to students attending colleges or 

career and technical schools.

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

aid lifecycle, which include: 

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

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

• Processing millions of FAFSA forms,

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

student aid funds delivered to students annually,

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

federal student loan borrowers,

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

financial aid process, and

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

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

governing the federal student aid programs.

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

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

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

and systems that support its mission.
10 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Organizational Structure

FSA currently operates under a functional organizational structure that aligns the key business 

areas with its strategic goals, business objectives, and vision. A Chief Operating Officer (COO), 

who is appointed for a three to five year term by the Secretary of the Department of Education

(Secretary) leads FSA, with five Deputy COOs as leaders over distinct operational areas. In 

May 2021, the Secretary appointed Richard Cordray as the FSA COO. The figure below

illustrates the functional organizations within FSA.

Figure 7: FSA Organizational Chart

During FY 2021, FSA operated on an annual administrative budget of approximately $1.9 billion.

As of Sept. 30, 2021, FSA was staffed by 1,416 full-time employees and augmented by 

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

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

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

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

Figure 8: FSA Regional Map

Chief Operating 

Officer

Office of Partner 

Participation and 

Oversight

Office of Student Aid 

and Experience 

Delivery

Office of Strategic 

Measures and 

Outcomes

Office of Strategy 

Innovation and 

Transformation

Principal Deputy 

Chief Operating 

Officer
Fiscal Year 2021 Annual Report | Federal Student Aid 11

Management’s Discussion and Analysis

Mission, Vision, and Core Values

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

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

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

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

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

components in building a high-performing organization.

Table 1: FSA Mission, Vision, and Core Values

MISSION

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

Student at a Time. 

VISION

Vision To be the most trusted and reliable source of student 

financial aid, information, and services in the nation.

CORE VALUES

Integrity Do the right thing above other interests and hold everyone 

accountable.

Customer Service Provide accurate and timely information to customers 

throughout the student aid lifecycle. 

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

culture of continuous improvement.

Respect Value individuals by acknowledging the diversity of their 

contributions, ideas, and beliefs.

Stewardship Uphold the sacred trust of taxpayers as we work to 

support the goals of Congress and the Administration.

Teamwork Work in collaboration with our colleagues and partners to 

produce the best possible results.

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

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

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

enable the organization to accomplish its mission successfully.
12 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Significant Legislation that Directs the FSA Mission

Several legislative acts guide FSA’s mission. The HEA established FSA as a PBO to administer 

the Title IV programs. The following table, while not all-inclusive, identifies additional significant 

enactments of legislation that have influenced FSA’s mission.

Table 2: Overview of Legislative Authority

Legislation Purpose

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

programs known as Title IV programs.

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

William D. Ford Federal Direct Loan Program. 

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

Parent Loan for Undergraduate Studies Loan 

Program. 

College Cost Reduction and Access Act of 2007 Authorized the Teacher Education Assistance for 

College and Higher Education Grant Program, created 

the Public Service Loan Forgiveness Program, and 

established Income Based Repayment plans.

Ensuring Continued Access to Student Loans Act of 

2008

Provided the Department with the authority to 

implement programs to ensure eligible students and 

parents were not denied access to federal student 

loans during the credit market disruptions of 2008.

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

would be originated under the Federal Family 

Education Loan Program.

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

be tied to financial markets and that each loan will 

have a fixed interest rate for the life of the loan.

Consolidated Appropriations Act, 2014 Transferred all Health Education Assistance Loan 

Program loans as of July 1, 2014, from the U.S. 

Department of Health and Human Services to the 

Department.

Coronavirus Response and Relief Supplemental 

Appropriations Act, 2021

Free Application for Federal Student Aid (FAFSA) 

simplification and expanded Federal Pell Grant 

Program eligibility. 

FSA Stakeholders

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

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

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

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

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

statutory framework established by Congress and regulatory framework established by the 

Department. The following table displays the role of FSA and the participants in the FSA 

system.
Fiscal Year 2021 Annual Report | Federal Student Aid 13

Management’s Discussion and Analysis

Table 3: Role of FSA and Participants in the FSA System 

Participants Participants’ Role FSA’s Engagement with Participants

Students • Receive aid to finance postsecondary 

education and repay loans following 

completion or exit from school. 

• Explaining federal student aid 

opportunities and requirements, 

• Providing products, services, and tools to 

help students pay for postsecondary 

education, 

• Identifying students who are eligible for 

aid, and

• Protecting students and borrowers from 

unfair, deceptive, or fraudulent practices 

in the student aid marketplace. 

Guaranty Agencies • Insure Federal Family Education 

Loan Program loans and service their 

defaulted loan portfolios. 

• Monitoring compliance, 

• Assisting them in meeting regulatory 

requirements, 

• Providing technical assistance, and 

• Paying default claims.

Loan Holders • Hold and service outstanding Federal 

Family Education Loan Program

loans to students.

• Monitoring compliance, 

• Assisting them in meeting requirements, 

• Providing interest subsidies and Special 

Allowance Payments, and 

• Educating them regarding policy.

FSA-Contracted Loan 

Servicers

• Service William D. Ford Federal 

Direct Loan Program portfolio and 

portions of Federal Family Education 

Loan Program portfolio, 

• Provide systems and services to 

support FSA’s core operations (e.g., 

applications, disbursements), and

• Recover funds from defaulted loans. 

• Entering contractual agreements, 

• Setting performance standards, and

• Overseeing operations.

Postsecondary 

Institutions

• Determine students’ aid packages 

and disburse funds.

• Determining eligibility and disbursing aid, 

• Monitoring compliance and regulatory 

requirements, and

• Providing technical assistance.

Congress • Sets statutory requirements for 

student loan programs as well as a 

myriad of borrower benefits and 

budget appropriations. 

• Providing data and information for 

decision making and

• Providing updates on operational 

performance.

The President, the 

Department, and 

others in the Executive 

Branch

• Set regulatory standards and 

establish policy for the distribution of 

aid and collection of loan payments. 

• Providing data that informs policy 

decisions, 

• Providing recommendations for 

implementation of new policies, and

• Sharing information regarding high risk 

compliance concerns. 
14 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Federal Student Financial Aid Programs 

Each year, FSA delivers billions of dollars in financial aid to students through the Title IV

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

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

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

is mainly distributed to students through: 

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

and must be repaid with interest, 

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

and

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

earn money to help pay for school.

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

FY 2021, FSA processed more than 17.6 million FAFSA forms, resulting in the delivery of 

approximately $112.0 billion in Title IV aid to more than 10.1 million postsecondary students and 

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

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

recognized by the Secretary. 

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

by program in FY 2021 and FY 2020. A summary discussion of each Title IV program is 

presented in the paragraphs after the table.
Fiscal Year 2021 Annual Report | Federal Student Aid 15

Management’s Discussion and Analysis

Table 4: Summary of Federal Aid Disbursed to Students by Program4

(Dollars in Millions)

Programs

2021 Aid 

Disbursed to 

Students 

2020 Aid 

Disbursed to 

Students 

Difference Percentage 

Change

Federal Loan Programs

William D. Ford Federal Direct Loan Program $ 83,279.4 $ 86,129.4 $ (2,850.0) (3.3)% 

Federal Grant Programs

Federal Pell Grant Program $ 26,709.8 $ 27,466.5 $ (756.7) (2.8)% 

Federal Supplemental Educational 

Opportunity Grant Program 868.8 820.5 48.3 5.9

The Teacher Education Assistance for 

College and Higher Education Grant 

Program

75.0 78.1 (3.1) (4.0)

Other Grant Programs 0.6 0.5 0.1 20.0

Subtotal Grant Programs $ 27,654.2 $ 28,365.6 $ (731.4) (2.6)% 

Federal Work-Study Program

Federal Work-Study Program $ 1,052.9 $ 1,079.3 $ (26.4) (2.4)% 

Rounding 0.0 0.1 (0.1) 0.0

Grand Total $ 111,986.5 $ 115,574.4 $ (3,607.9) (3.1)% 

Federal Loan Programs

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

more than $1.6 trillion, representing approximately 216.9 million student loans to more than 

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

loan programs described below.

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

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

primarily by borrowings from U.S. Department of the Treasury (Treasury), as well as an 

appropriation for subsidy costs. Four different types of Direct Loans are available for borrowers: 

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

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

amounts derived from amounts from FSA’s and the Department’s financial systems. The number of awards or recipients reported in 

the Management’s Discussion and Analysis is derived from a variety of sources including FSA’s Common Origination and 

Disbursement (COD) System and data used to support the President’s Budget. Recipient counts are based on award year.
16 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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

undergraduate students for which the federal government generally does not charge 

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

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

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

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

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

disbursement and continues throughout the life of the loan.

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

made to graduate or professional students and parents of dependent undergraduate 

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

the loan status.

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

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

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

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

payment. 

As of Sept. 30, 2021, FSA’s portfolio of Direct Loans included $1.1 trillion in credit program 

receivables, net. In FY 2021, the Department made $83.3 billion5 in net loans to 7.2 million 

recipients.

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

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

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

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

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

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

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

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

agencies held a FFEL Program loan portfolio of approximately $105.9 billion as of 

Sept. 30, 2021. Of this portfolio, $58.2 billion represented FSA’s credit program receivables, net, 

comprised of $42.1 billion in loans acquired under the Ensuring Continued Access to Student 

Loans Act of 2008 (ECASLA) authorization and $16.1 billion acquired under the "traditional" 

(Non-ECASLA) guaranteed loan program. In FY 2021, FSA made gross payments of 

approximately $350.2 million to lenders for interest and special allowance subsidies and 

$3.7 billion to guaranty agencies for reinsurance claims and fees paid for account maintenance, 

default aversion, and collection activities.

ECASLA authorized the Department to implement a number of programs to ensure credit 

market disruptions did not deny eligible students and parents access to federal student loans for 

the 2008–09 and 2009–10 academic years. The authority for two ECASLA Programs, the Loan 

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

5 Excludes consolidation loans of $21.5 billion.
Fiscal Year 2021 Annual Report | Federal Student Aid 17

Management’s Discussion and Analysis

after Sept. 30, 2010. The third ECASLA Program, the Asset-Backed Commercial Paper Conduit

(ABCP Conduit) Program, ended in January 2014. 

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

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

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

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

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

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

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

made under this program for the year. The Federal Perkins Loan Program Extension Act of 

2015 eliminated the authorization for schools to make new Federal Perkins loan disbursements 

as of Sept. 30, 2017 and ended all Perkins loan disbursements by June 30, 2018. 

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

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

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

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

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

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

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

outstanding loans obtained through the program.

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

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

approximately $413.0 million for FY 2021. 

Federal Grant Programs

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

approximately $27.7 billion in grants to approximately 6.2 million recipients. The following 

provides a summary for each grant program, including aid disbursed in FY 2021. 

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

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

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

the financial circumstances of students and their families. In FY 2021, the Department disbursed 

$26.7 billion in Pell Grants averaging approximately $4,300 to approximately 6.2 million 

students. The maximum Pell Grant award was $6,345 in the 2020–21 award year and increased 

to $6,495 in the 2021–22 award year. 

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

Funds provided through this program enable eligible institutions to offer grants to students 

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

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

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

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

awards can be made under this program for the year. This form of aid does not require 
18 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

repayment. In FY 2021, approximately $868.8 million were disbursed through approximately 

1.7 million campus-based awards.

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

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

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

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

year, starting July 1, 2008. For any award year 2020–21 or 2021–22 TEACH Grant first 

disbursed on or after Oct. 1, 2020, and before Oct. 1, 2021, the maximum award is $3,772. For 

any award year 2021–22 TEACH Grant first disbursed on or after Oct. 1, 2021, and before Oct. 

1, 2022, the maximum award is $3,772. If students fail to fulfill the service requirements specific 

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

accruing from the time of the award. During FY 2021, there were 3,236 involuntary conversions 

and 2,597 voluntary conversions from TEACH grant status to direct unsubsidized loans. Those 

grantees who are involuntarily converted to loan status have the right to appeal an involuntary 

conversion. During FY 2021 there were approximately 1,125 reinstatements from a loan status 

back to grant status. In FY 2021, the Department disbursed approximately 24,000 grants 

totaling $75.0 million under the TEACH Grant Program. 

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

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

Armed Forces and died in Iraq or Afghanistan because of military service after Sept. 11, 2001. 

These grants are awarded to students who are not eligible for a Pell Grant based on financial 

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

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

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

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

or guardian’s death.

For any award year 2021–22 Iraq and Afghanistan Service Grant first disbursed on or after Oct. 

1, 2020, and before Oct. 1, 2021, the maximum award is approximately $5,983. For any award 

year 2021–22 Iraq and Afghanistan Service Grant first disbursed on or after Oct. 1, 2021, and 

before Oct. 1, 2022, the maximum award is approximately $6,125. The Department disbursed 

approximately $0.6 million to support fewer than 100 awards in FY 2021. 

Federal Work-Study Program

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

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

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

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

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

community service work. The work is often related to the student’s course of study. In FY 2021, 

approximately $1.1 billion were disbursed through more than 651,000 campus-based awards. 
Fiscal Year 2021 Annual Report | Federal Student Aid 19

Management’s Discussion and Analysis

Performance Management

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

performance management processes at FSA. The foundation of performance management 

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

planning process within FSA are listed below. 

Table 5: Key Strategic Drivers Relevant to FSA Strategic Planning

Key Strategic Driver Relevance to FSA’s Strategic Planning Process

The Higher Education Act of 1965 legislation Prescribes Title IV program and PBO requirements (i.e., 

improve service, reduce costs, improve and integrate support 

systems, develop delivery and information systems, and 

enhance staff development and talent). 

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

and products.

Key trends and conditions for the financial aid 

environment

Indicate student aid environment within which FSA must 

operate. Listed below are key trends that may affect the 

financial aid environment.

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

has direct implications for taxpayers.

• Students are making high impact financial decisions

without the benefit of adequate financial knowledge.

• Digital fluency and mobile ubiquity are driving new

service expectations among customers.

• Increased volume of student data has created new

opportunities, obligations, and risks.

The Department’s Five-Year Strategic Plan Require FSA’s support of the Department’s strategic goals 

related to postsecondary education.

Office of Inspector General’s (OIG)

Management and Performance Challenges

Require the Department and FSA senior management’s 

consideration for establishing priorities. OIG’s Management 

Challenges for FY 2021 include:

• Implementing the Coronavirus Aid, Relief, and

Economic Security Act (CARES Act),

• Oversight and Monitoring,

• Data Quality and Reporting,

• Improper Payments, and

• Information Technology Security.

OIG and Government Accountability Office 

(GAO) audits

Require FSA senior management’s consideration for 

establishing priorities to address findings and 

recommendations.

Federal financial management laws and 

regulations

Prescribe financial management requirements.

Federal performance reporting legislation and 

requirements

Prescribe performance and reporting requirements.

Federal budget deficits Require FSA to look for opportunities to reduce operating 

costs through improved efficiency.
20 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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

requirements outlined in the HEA while ensuring future consistency and accountability. In this 

way, the key strategic drivers influence the development and implementation of FSA’s strategic 

plan, as well as the development and tracking of performance metrics. The Performance 

Management section illustrates the outcome of this effort by discussing the following:

• FSA’s performance management processes,

• FSA’s FY 2020–24 strategic goals,

• FSA’s alignment to the Department of Education Strategic Plan for Fiscal Year 2018–22

(FY 2018–22 Strategic Plan), and

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

The strategic process building blocks outlined in this section demonstrate how FSA facilitates 

strategic planning, goal setting, reporting, and monitoring to improve operations and achieve its 

mission. The performance management framework discussed in this section provides the 

foundation for the presentation of both performance achievements and challenges experienced 

in FY 2021. The section also highlights the organizational emphasis to create a more robust 

culture of performance management through collaboration internally and with Department 

officials.

Figure 9: Strategic Process Building Blocks
Fiscal Year 2021 Annual Report | Federal Student Aid 21

Management’s Discussion and Analysis

Performance Management Processes at Federal Student Aid

During FY 2021, FSA used a tiered performance management framework to establish goals and 

communicate, measure, and report performance:

• FSA FY 2020–24 Strategic Plan

• Weekly Organization Briefings 

• Bi-Weekly Performance Accountability Meetings

• Annual Performance Report

• Department’s Quarterly and Annual Performance Reviews

• Agency Priority Goals (APGs)

FSA FY 2020‒24 Strategic Plan

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

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

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

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

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

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

• Appropriate to the mission of the organization,

• Realistic and measurable,

• Achievable in the time frame established, 

• Challenging in their performance targets, and

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

that is adequately defined.

Each strategic goal encompasses objectives and identifies performance metrics to measure 

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

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

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

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

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

FSA is committed to continuous performance improvement and conducts frequent reviews of its 

strategic plan. During FY 2021, FSA reviewed its FY 2020–24 Strategic Plan and identified 

changes that would improve delivery of its mission and enhance its performance reporting. As a 

result of its strategic review, FSA refined its performance measurements to reflect better 

strategies in driving progress towards achieving strategic objectives and present a more 

accurate measure of FSA’s performance in meeting the goals. During the annual update effort 

in FY 2021, 6 performance metrics were discontinued from 44 metrics, resulting in a total of 38 

metrics to reflect shifts in strategies or objectives derived from the analysis of outcomes, 

success criteria, and other evidence. To read more about performance measurement and metric 
22 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

target changes, refer to the Annual Performance Report and Appendices sections included in

this report.

Strategic Framework

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

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

abbreviated view of the current strategic plan.

Table 6: Strategic Goals and Strategic Objectives for FY 2020‒24

Strategic Goal 1 Strategic Objectives

Empower a High Performing Organization

1.1: Improve employee engagement and workplace inclusion to 

develop and retain talent, improve employee satisfaction, and 

engage in effective succession planning.

1.2: Expand employee skills and capabilities to support Next Gen 

FSA. 

Strategic Goal 2 Strategic Objectives

Provide World-Class Customer 

Experience to the Students, Parents, and 

Borrowers We Serve

2.1: Ensure that all students can easily access information on 

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

information on repayment options.

2.2: Provide seamless, easy, personalized digital interactions equal 

with top financial institutions in the delivery of financial aid 

products and services.

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

our customers’ integrated experience.

2.4: Simplify the communication and processes associated with 

borrower repayment plans.

Strategic Goal 3 Strategic Objectives

Increase Partner Engagement and 

Oversight Effectiveness

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

comprehensive suite of monitoring tools.

3.2: Strengthen partner engagement and provide effective outreach 

and assistance. 

Strategic Goal 4 Strategic Objectives

Strengthen Data Protection and 

Cybersecurity Safeguards

4.1: Implement business partner and vendor systems that house, 

manage, and provide systems supporting FSA business 

processes, outreach and awareness focused on oversight, 

enforcement, infrastructure, systems, and data.

4.2: Improve student privacy data and cybersecurity controls of 

Institutions of Higher Education (IHEs) through outreach and 

communication, to mitigate future cyber-incidents and breaches. 

4.3: Build an effective cybersecurity culture through employee 

awareness, training and accountability focused on protecting 

systems and data.

Strategic Goal 5 Strategic Objectives

Enhance the Management and 

Transparency of the Portfolio

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

loan portfolio performance.

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

5.3: Leverage portfolio analytics to drive improved outcomes for 

customers and taxpayers.

5.4: Increase vendor performance through quality management 

activities centered on customer service and product delivery.
Fiscal Year 2021 Annual Report | Federal Student Aid 23

Management’s Discussion and Analysis

Weekly Organization Briefings

The Organization Briefings in FY 2021 have enhanced the strategic alignment within FSA in 

operations, products, and accountability in achieving results. Discussions in the briefings 

enabled attendees to make strategic connections between the work that is performed 

throughout FSA and its impact on its stakeholders. Information discussed in the briefings also 

contributed to developing the FY 2021 Annual Report. These briefings evolved from the Daily 

Standup meetings which began in FY 2020 for senior leaders to discuss hot topics. The 

transformation from hot topic discussions to Organization Briefings in the second quarter of 

FY 2021 enabled FSA to perform strategic reviews of its performance metrics and other 

performance related topics. It also expanded the leadership discussions to a broader audience 

of FSA leaders, managers, supervisors, and subject matter experts across headquarters and 

ten regional offices. Offering the briefings to a broader audience helped increase the attendees’ 

access to information across FSA and enabled the organization to gain a diverse perspective on 

strategic planning and performance management efforts. 

During FY 2021, participants were surveyed to gain insight into the strengths and benefits of the 

briefings, as well as the opportunities for improving performance discussions. Approximately 

70% of the survey respondents found the briefings effective in providing information that would 

help FSA to achieve its performance goals as an organization. In following the OMB’s guidance 

for strategic planning and performance reporting, FSA developed helpful guides, processes, and 

tools to strengthen its performance discussions and methodologies in data collection and 

reporting. To further advance FSA’s strategic framework, the Organization Briefings established 

various themes that illustrated the efforts of specific business areas in advancing the goals and 

objectives of the FY 2020–24 Strategic Plan. 

Over the course of seven months, FSA developed an extensive catalog of presentations from 

the Organization Briefings, including a mid-year strategic performance review series highlighting 

performance progress, risk management, accomplishments, and opportunities in business

areas. The frequent data-driven and results-oriented analyses offered greater transparency and 

accountability in managing FSA’s strategies to achieve its goals and objectives while 

strengthening partnerships across FSA, the Department, and with external stakeholders. In 

addition, the briefing themes and structure benefitted the attendees with tools and knowledge to 

develop their competencies to drive for results, serve customers, and build successful teams 

and coalitions within and outside the organization. These competencies are executive core 

qualifications identified by the Office of Personnel Management (OPM) to assess executive 

experience and potential.

Bi-Weekly Performance Accountability Meetings

Throughout FY 2021, FSA measured and analyzed performance based upon performance 

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

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

the organization, executed through weekly performance reports and bi-weekly accountability 

meetings with the FSA leadership and management team.

Detailed analyses of specified performance metrics are developed and provided to the FSA 

leadership and management team in the form of dashboards. The organization updates 27 

dashboards, with approximately 90 metrics on a weekly basis. Areas of focus and metrics are 

added as FSA identifies potential concerns or opportunities for improvement.
24 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Progress on designated performance metrics, both negative and positive, is discussed in an 

open forum during the bi-weekly meetings. For any performance metrics not on track, the 

analysis must include identification of the root cause of the unexpected result and a 

recommendation of the appropriate corrective actions necessary to improve performance. 

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

associated with the Department’s Quarterly Performance Review were also maintained 

throughout FY 2021 and utilized to discuss performance metric progress on a quarterly basis.

Annual Performance Report

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

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

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

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

the independent auditors.

Department of Education Quarterly and Annual Performance Reviews

The Department conducts quarterly data-driven performance reviews with principal offices on 

progress towards achieving agency priorities. The Quarterly Performance Review framework 

primarily focuses on process improvements and capacity building, providing principal offices an 

opportunity to establish specific milestones. 

FSA’s FY 2020–24 Strategic Plan supports the Department’s overall strategic goals and 

directions, as defined in the Department’s FY 2018–22 Strategic Plan. Currently, FSA tracks the 

performance of 14 metrics that support the following Department’s strategic goals:

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

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

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

management, increased privacy protections, and transparency.

The Department will publish its Department of Education Strategic Plan for Fiscal Years 2022–

26 in February 2022, and establish updated strategic goals, objectives, and performance 

indicators to assess progress toward the Administration’s priorities of increasing postsecondary 

education access, affordability, completion, and post-enrollment success.
Fiscal Year 2021 Annual Report | Federal Student Aid 25

Management’s Discussion and Analysis

Agency Priority Goals 

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

Modernization Act of 2010 (GPRA Modernization Act) (Pub. L. 111-352) that provide agencies a 

mechanism to focus on leadership priorities, set outcomes, and measure results, bringing focus 

to mission areas where agencies need to drive significant progress and change. APG 

statements are outcome-oriented, ambitious, and measurable with specific targets that reflect a 

near-term result or achievement agency leadership wants to accomplish within approximately 

24 months.

In collaboration with OMB, the Department established five APGs for FY 2020 and FY 2021 that 

align with the Department’s FY 2018–22 Strategic Plan. Quarterly progress reporting to 

Performance.gov is currently paused while the Biden-Harris Administration establishes 

updated goals, priorities, and a management agenda in meeting the intent of GPRA

Modernization Act. The Department will develop FY 2022 and FY 2023 APGs that focus on the 

priorities of the current Administration.
26 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Quality of Performance Data

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

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

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

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

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

performance metric, this matrix is used to document the following: data source, availability, 

security procedures, and known limitations; whether data are subject to FSA’s OMB Circular A123 Internal Control Review process; and procedures for accessing the data, calculating the 

performance metric, and validating and verifying the data gathered.

For a discussion of data validation and verification for each performance metric, please see the 

Data Validation and Verification subsection, located in the Appendices section. 
Fiscal Year 2021 Annual Report | Federal Student Aid 27

Management’s Discussion and Analysis

Analysis of Financial Statements

Introduction

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

FY 2021. This section assists readers in understanding FSA’s financial results, position, and 

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

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

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

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

statements and notes. 

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

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

financial statements are prepared in accordance with established federal accounting standards 

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

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

cost, changes in net position, and budgetary resources. In FY 2021, FSA achieved an 

unmodified audit opinion on its financial statements for the 20th consecutive year.

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

For FY 2021 and FY 2020, the Balance Sheet, Statement of Net Cost, and Statement of 

Changes in Net Position were prepared on a consolidated basis, whereas the Statement of 

Budgetary Resources was prepared on a combined basis. These financial statements, along 

with the Independent Auditors’ Report on these statements, can be found in the Financial 

Section.

FSA has oversight responsibilities for more than $1.6 trillion in federal student loans, of which it 

directly owns and manages approximately $1.5 trillion. The remaining balance represents nondefaulted FFEL Guaranteed loans held by lenders and Federal Perkins loans held by schools, 

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

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

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

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

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

cost to the government of Direct Loans and loan guarantees. Subsidy Expense is recorded in 

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

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

agencies, and net borrowing costs, less any origination or other fees collected. If the net cost to 

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

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

of providing loans to borrowers is less than the value of collections received as interest and 

fees. As of Sept. 30, 2021, FSA reported $1,164.8 billion in Credit Program Receivables, Net 

after deducting an Allowance for Subsidy of approximately $322.0 billion. Credit Program 

Receivables, Net was 0.4% less than the prior-year amount. This decrease was primarily due to 

$63.7 billion increase in the FY 2021 Allowance for Subsidy (24.7%). The reasons for the 

adjustment to the Allowance for Subsidy estimate are explained in Note 5.
28 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

The FY 2021 FSA Financial Highlights tables presented below provide a condensed summary 

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

period, beginning with FY 2017. The tables also show the percentage change between the prior 

and current fiscal years as of Sept. 30, 2020 and 2021, respectively. The figures and tables 

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

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

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

text or presented in other areas of the Annual Report. 

Table 7: Financial Highlights

Condensed Balance Sheets

(Dollars in millions)

Asset FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Percentage 

Change6

Fund Balance with Treasury $ 74,032 $ 73,405 $ 62,567 $ 70,266 $ 79,163 12.7% 

Credit Program Receivables, Net 1,145,406 1,209,495 1,202,092 1,169,614 1,164,800 (0.4) 

Remaining Assets 2,256 2,365 2,217 2,171 2,177 0.3 

Total Assets $1,221,694 $1,285,265 $ 1,266,876 $ 1,242,051 $ 1,246,140 0.3% 

 

Debt $1,178,473 $1,258,481 $ 1,287,494 $ 1,249,807 $ 1,221,116 (2.3)% 

Subsidy due to Treasury General 

Fund 7,013 7,528 10,302 3,283 1,513 (53.9) 

Remaining Liabilities 13,000 10,197 13,971 8,350 15,905 90.5 

Total Liabilities $1,198,486 $1,276,206 $ 1,311,767 $ 1,261,440 $ 1,238,534 (1.8)% 

 

Unexpended Appropriations $28,524 $32,487 $31,400 $ 35,038 $ 36,338 3.7% 

Cumulative Results of Operations (5,316) (23,428) (76,291) (54,427) (28,732) (47.2) 

Net Position $ 23,208 $ 9,059 $ (44,891) $ (19,389) $ 7,606 (139.2) 

Total Liabilities & Net Position $1,221,694 $1,285,265 $ 1,266,876 $ 1,242,051 $ 1,246,140 0.3% 

Table 8: Statements of Net Cost

(Summarized) 

(Dollars in millions)

Asset FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Percentage 

Change7

Gross Cost $ 73,771 $ 71,232 $ 114,865 $ 171,245 $ 177,382 3.6% 

Less: Earned Revenue (35,825) (36,224) (36,820) (39,384) (39,724) 0.9 

Net Cost of Operations $ 37,946 $ 35,008 $ 108,045 $ 131,861 $ 137,658 4.4% 

6 The percentage change is calculated as the difference between FY 2020 and FY 2021, divided by the FY 2020 amount. In some 

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

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

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

7 Refer to Footnote 6.
Fiscal Year 2021 Annual Report | Federal Student Aid 29

Management’s Discussion and Analysis

Balance Sheet

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

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

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

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

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

The consolidated Balance Sheet shows that FSA had total assets of $1,246.1 billion as of 

Sept. 30, 2021, an increase of $4.0 billion, or 0.003% over the Sept. 30, 2020 total assets 

balance of $1,242.1 billion. The difference resulted primarily from a 12.7% increase in Fund 

Balance with Treasury ($8.9 billion), combined with a 0.4% decrease in net Credit Program 

Receivables ($4.8 billion). Together, FSA’s Fund Balance with Treasury and its net Credit 

Program Receivables accounted for approximately 99.8% of Total Assets as of Sept. 30, 2021, 

as illustrated in the Composition of Assets chart (Figure 10). The Comparison of Assets chart 

(Figure 11) presents changes in these two principal Balance Sheet line items over the past five 

fiscal years.

Figure 10: Composition of Assets*

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

Figure 11: Comparison of Assets*

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. 
30 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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

$1,164.8 billion balance as of Sept. 30, 2021, represents FSA’s most important asset category 

and accounted for approximately 93.5% of Total Assets. This balance includes $1,486.8 billion 

in principal, interest, and fees, less an allowance for subsidy cost of approximately $322.0 billion 

that adjusted the loan portfolio to its estimated present value. See Note 5 for more detail. FSA 

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

Other, as illustrated in Figure 12 below and discussed more fully in the following sections.

Figure 12: Total Loan Portfolio*

Net of Allowance for Subsidy

(Dollars in Billions) 

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

Figure 12 also shows that over the five-year period, FY 2017–21, FSA’s portfolio of FSA net 

credit program receivables increased by $19.4 billion or 1.7%. The Direct Loan program 

accounted for most of this change, increasing by $63.3 billion (6.1%), offset by the $44.2 billion 

(43.2%) reduction of the FFEL Portfolio over the same period. However, the overall upward 

trend reversed in FY 2020. Since FY 2019 the $18.6 billion (24.2%) net reduction in FFEL net 

credit program receivables coincided with the $18.8 billion (1.7%) decrease in Direct Loan credit 

program receivables. The overall reduction in FSA’s net credit program receivables portfolio 

since FY 2019 was $37.3 billion or 3.1%. 

The directional changes observed in the Direct Loan and FFEL portfolios are principally related 

to the impact of the SAFRA Act, which as of June 30, 2010, eliminated all new loan originations 

under the FFEL Program in favor of direct lending. Loan consolidation has also played a role. 

Consolidation is the process of combining one or more federal student loans into one loan. For 

more information about which federal loans may be eligible for consolidation and other 

requirements, please visit StudentAid.gov/consolidation. Another significant factor in FY 2021 

was an increase to the allowance for subsidy cost of $63.7 billion (24.7%) as compared to 

FY 2020. The reasons for the adjustment to the subsidy cost estimate are explained in Note 5. 
Fiscal Year 2021 Annual Report | Federal Student Aid 31

Management’s Discussion and Analysis

Direct Loan Credit Program Receivables, Net. Direct Loan Credit Program receivables 

continue to be the major component of FSA’s credit program receivable portfolio in FY 2021. As 

of Sept. 30, the $1,104.9 billion Direct Loan portfolio ending balance comprises 94.9% of FSA's 

total credit program receivables net, compared to the prior year ending balance of 

$1,100.5 billion that represented 94.2%. The FY 2021 Direct Loan ending balance total includes 

$1,378.7 billion in principal, interest, and fees, with an allowance for subsidy cost to the 

government of $273.8 billion. This amount contrasts to the prior year where the subsidy costs 

were projected at $216.4 billion on Direct Loan principal, interest, and fees of $1,316.9 billion. 

The factors that contributed to the variance in subsidy cost at a time when the underlying loan 

balances increased by 5.4% are addressed in Note 5. 

The FY 2021 $61.8 billion increase in Direct Loan Receivables (before subsidy costs) was 

mainly driven by the growth in the outstanding amount owed by borrowers, principally resulting 

from new loan originations ($83.3 billion) and consolidation disbursements ($21.5 billion). This 

increase was offset by a net decrease in accrued interest and fees ($5.6 billion), by reductions 

to principal due to loan payments ($20.7 billion), loan consolidations ($13.1 billion), write-offs 

($8.4 billion), and other adjustments ($4.8 billion). 

The growth in principal outstanding has accounted for virtually all growth of the Direct Loan

portfolio over the past five years in dollar terms, as seen in Figure 13. Table 9 illustrates that 

accrued interest decreased from 8.4% to 7.8% of the net receivable amount and outstanding 

principal increased from 111.3% to 117.0% of the net amount. However, over the same period, 

Table 10 shows that accrued interest increased at a higher average annual rate than 

outstanding principal (10.3% versus 6.7%). See Note 5 for more details.

Figure 13: Components of Direct Loan Receivables, Net8

(Dollars in Billions) 

Figure 13 also includes the number of recipients corresponding to the outstanding loan portfolio

at each fiscal year end. Recipients are students that benefit from the federal student loans. In 

most cases, a recipient is the borrower; but in the PLUS loans, the parent is the borrower, and 

8 Line items may include rounding adjustments to reconcile to the total amount being reported. Recipient numbers come from the 

Data Center or NSLDS database. See Footnote 10. 
32 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

the student is the recipient. The chart shows that Direct Loan recipients grew from 33.0 million 

to 37.0 million over the five-year period, reflecting, as reported in Table 10, an average annual 

increase of 2.9%, well below the rate of increase of principal and interest described earlier. As a 

result, the average debt (principal and interest) balance outstanding per Direct Loan recipient 

increased by 16.2% during this time, from $32,073 to $37,262; the higher debt burden per 

student is likely an indication of increasing postsecondary education costs.

Table 9: Components of Direct Loan Credit Program Receivables, Net by Percentage*

Direct Loan Component FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Principal* 95.9% 97.2% 103.7% 111.3% 117.0% 

Accrued Interest 5.7% 6.5% 7.4% 8.4% 7.8% 

Allowance for Subsidy (1.6)% (3.7)% (11.1)% (19.7)% (24.8)% 

Net Receivable 100.0% 100.0% 100.0% 100.0% 100.0%

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

Table 10: Increase in Principal, Interest and Subsidy Components of Direct Loan Credit 

Program Receivables, Net and Recipient Counts*

Direct Loan Component FY 2017–18 FY 2018–19 FY 2019–20 FY 2020–21

FY 2017–21

Average Year-toYear Change

Principal 8.5% 7.5% 5.1% 5.5% 6.7% 

Accrued Interest 21.0% 15.7% 10.6% (6.1)% 10.3% 

Allowance for Subsidy (143.1)% (206.7)% 73.8% 26.5% (62.4)% 

Net Receivable 7.1% 0.8% (2.1)% 0.4% 1.5% 

Total Recipients 3.6% 2.6% 2.3% 3.1% 2.9% 

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

While the Direct Loan portfolio has grown rapidly in recent years, it has also changed in 

character as an increasing proportion of students begin the repayment phase of their loans. 

Under the Title IV regulations, each loan may pass through several distinct statuses as the 

student progresses through the loan life cycle, from borrowing to repaying.

Repayment on most federal student loans is not required while the student recipient is “In 

School” unless they drop below half-time enrollment. However, repayment of Federal PLUS 

Loans begins within 60 days of full disbursement unless parents request a deferment from their 

loan servicer to delay the start of repayment until the end of the six-month grace period after the 

student graduates or drops below half-time enrollment. Direct PLUS for graduate or professional 

students enter repayment six months after the borrower graduates or drops below half-time 

enrollment. Once the student borrower graduates, leaves school, or drops below half-time 

enrollment, they are frequently entitled to a “Grace” period. During this period, repayment is not 

required to begin on the loan. Not all federal student loans have a grace period and for most 

loans, interest will accrue during the grace period. At the end of the grace period, the borrower

will enter “Repayment” status and regular monthly payments will be required according to an 

agreed upon payment schedule. If the borrower continues to make timely payments such that 

no more than 30 days elapse after the due date without payment, then the loan is classified as 

“Current.” If more than 30 days elapse, then the loan will be reclassified as “Delinquent.” Under 

Title IV, if more than 270 days pass without payment being received to satisfy the oldest 
Fiscal Year 2021 Annual Report | Federal Student Aid 33

Management’s Discussion and Analysis

payment due, Direct Student Loans are technically considered “In Default”.9 The status 

continues to be tracked through the life of the loan until the loan is paid in full or otherwise 

closed out.

On March 20, 2020, FSA began providing the following temporary relief on Department-owned 

federal student loans (including Department-owned FFEL loans): suspension of loan payments, 

stopped collections on defaulted loans, and a 0% interest rate. On March 27, 2020, the CARES 

Act became law, providing for the above relief measures on Department-owned federal student 

loans through Sept. 30, 2020. On Aug. 8, 2020, the COVID-19 emergency relief measures were 

extended through Dec. 31, 2020. On Dec. 4, 2020, the COVID-19 emergency relief measures 

were extended through Jan. 31, 2021. On Jan. 20, 2021, the COVID-19 emergency relief 

measures were extended through Sept. 30, 2021. On March 30, 2021, the COVID-19 

emergency relief measures were expanded to defaulted federal student loans made through the 

FFEL Program managed by guaranty agencies. On Aug. 6, 2021, the COVID-19 emergency 

relief measures were extended until Jan. 31, 2022.

Figure 1410 divides FSA’s portfolio of Direct Loans into two main categories, based on 

repayment status. For the purpose of this discussion,11 loans are classified as “In Repayment” 

if, under the terms of the promissory note, the loan is current, delinquent, defaulted, in nondefaulted bankruptcy, or in a disability status. Alternatively, loans are classified as “Not in 

Repayment” if the borrower is “In School”, “In Grace”, or has been granted a deferment or a 

forbearance. The loan status “Deferment” includes loans for which payments have been 

postponed due to certain circumstances, such as returning to school, military service, or 

economic hardship. Similarly, “Forbearance” includes loans for which payments have been 

temporarily suspended or reduced because of certain types of financial hardships. Figure 14 

reports the portfolio balance as the sum of principal and interest balances (i.e., the gross 

amount) owed by the borrower and excludes any subsidy cost or allowance that would adjust 

the outstanding balance to its net present value.

The temporary relief discussed above and beginning on March 20, 2020, resulted in significant 

and atypical shifts in the “In Repayment” and “Not in Repayment” classifications. As can be 

seen in Figure 14, although both segments grew during the period FY 2017–19, the “In 

Repayment” segment grew to represent 65.7% of the total principal and interest amount 

outstanding, increasing the need for FSA to facilitate the ability of Direct Loan borrowers to meet 

their repayment obligations timely. During the period FY 2020–21, due to COVID-19 and the 

temporary emergency relief measures extended to student loan borrowers, the “In Repayment” 

segment declined to 10.1% of the total principal and interest amount outstanding while the “Not 

in Repayment” segment increased to represent 89.9%.

9

 FSA’s policy is to not transfer such loans to the defaulted debt servicer until more than 360 days pass without payment being 

received, to ensure parity of Direct Loan borrower treatment with that of FFEL borrowers.

10 FY 2017–18 data are based on data published by the FSA Data Center, StudentAid.gov/portfolio. FY 2019 data are taken 

directly from the NSLDS database. Also, the FY 2018 data published in the FY 2018 Annual Report, taken directly from the NSLDS 

database, have been replaced with data subsequently published by the Data Center. 

11 The In Repayment/Not in Repayment classifications used for this discussion are slightly different from the definitions under 

34 CFR §§ 685.207, 685.204, and 685.205 which specify that a borrower first enters repayment before receiving a deferment or 

forbearance. Under 34 CFR § 685.205(a), borrowers in forbearance may still make payments on their loans. In addition, under 

34 CFR Part 668 Subpart N, borrowers in a deferment or forbearance are considered to be in repayment for purposes of calculating 

the cohort default rate for institutions.
34 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

The Sept. 30, 2021 balance of loans in repayment of $138.8 billion (10.1% of the total Direct 

Loan portfolio) is comparable to the $146.6 billion (11.1%) as of Sept. 30, 2020. The dramatic 

decline in this segment from FY 2019 reflects the impact of the COVID-19 emergency and the 

payment pause, which placed most borrowers into administrative forbearance through 

Jan. 31, 2022.

Figure 14: Direct Loan Portfolio by Repayment Status*

Principal and Interest Only 

(Dollars in Billions) 

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. Also, prior data may be 

restated, as explained in Footnote 10.

In the following Figures 15A and 15B, the Direct Loan portfolio of “In Repayment” principal and 

interest has been subdivided into three categories, “Current”, “Delinquent”, and 

“Default/Bankruptcy/Other”, as those terms are defined above.

Figure 15A: Direct Loan Portfolio Segment in Repayment by Status*

Principal and Interest Only

(Dollars in Billions) 

*Note: Refer to the note below Figure 14.
Fiscal Year 2021 Annual Report | Federal Student Aid 35

Management’s Discussion and Analysis

Figure 15B: Direct Loan Portfolio Segment in Repayment by Status*

Principal and Interest Only 

(Percentage of Total)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. Also, prior data may be 

restated, as explained in Footnote 10. 

Regarding the “In Repayment” segment amounts as of Sept. 30, 2021, there was no delinquent 

loan principal as compared to $90.9 billion as of Sept. 30, 2019. Also, regarding the “In 

Repayment” segment amounts as of Sept. 30, 2021, $122.6 billion (88.3%) in loan principal was 

in default/bankruptcy/other status compared to $131.9 billion (90.0%) as of Sept. 30, 2020. The 

dramatic changes in these segments from FY 2019 to FY 2021 were due to the impact of the 

CARES Act and Presidential Directives which suspended borrower payments through 

Jan. 31, 2022.

The portfolio of Direct Loan principal and interest receivables “Not in Repayment” can also be 

further subdivided based on the reason why the debt is not currently subject to repayment.

Figures 16A and 16B12 subdivide this segment into two such categories, “In School, Grace 

Period, and Education Deferments” and “Forbearance/Noneducation Deferments”, as defined 

earlier.

Figure16A shows that the amount of Direct Loan principal and interest categorized as “In 

School, Grace Period, and Education Deferments” has remained relatively consistent, 

$291.7 billion in FY 2017 to $271.9 billion at the end of the current year. This decrease reflects 

a decline in new Direct Loan disbursements over the period, and the aging of the Direct Loan

portfolio of principal and interest receivable, as a greater proportion of debt moved from “In 

School, Grace Period, and Education Deferments” category to the “In Repayment” segment.

Figure 16B indicates that during the three-year period FY 2017–21, the “Forbearance and 

Noneducation Deferments” segment grew from $122.5 billion to $967.8 billion, increasing from 

29.6% to 78.1% of the “Not in Repayment” segment. However, during the FY 2017–21 period, 

the “In School, Grace Period, and Education Deferments” declined from $291.7 billion to 

$271.9 billion. Due to the impact of the CARES Act and Presidential Directives, this segment 

declined from 70.4% to 21.9% of the “Not in Repayment Segment.”

12 Please refer to footnotes 10 and 11. 
36 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Figures 16A and 16B illustrate the dramatic impact of the CARES Act and Presidential 

Directives. “In School, Grace Period, and Education Deferments” amounts decreased from 

$294.8 billion as of Sept. 30, 2019 to $271.9 billion as of Sept. 30, 2021. However, the 

“Forbearance and Noneducation Deferments” amounts increased from $133.2 billion as of 

Sept. 30, 2019 to $967.8 billion as of Sept. 30, 2021.

Figure 16A: Direct Loan Portfolio Segment not in Repayment by Status*

Principal and Interest Only

(Dollars in Billions)

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

Figure 16B: Direct Loan Portfolio Segment not in Repayment by Status*

Principal and Interest Only

(Percentage of Total)

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

FSA FFEL Credit Program Receivables, Net. FSA’s portfolio of FFEL loans includes debt 

acquired under the Conduit, Loan Participation Purchase, and Loan Purchase Commitment 

Programs established through the FY 2008 ECASLA law and referred to collectively as the 

FFEL ECASLA Loan Programs. It also includes debt acquired under the “traditional” (Non-
Fiscal Year 2021 Annual Report | Federal Student Aid 37

Management’s Discussion and Analysis

ECASLA) defaulted guaranteed loan programs, known collectively as the “FFEL Guaranteed” 

portfolio segment. Changes in these FFEL loan portfolio segments over the past five fiscal years 

are shown in Figure 17. 

Figure 17: Total FFEL Loan Portfolio***

(Dollars in Billions)

*FFEL Guaranteed (Non-ECASLA) Program 

**FFEL ECASLA Acquired Loan Program 

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

Figure 17 illustrates that with $42.1 billion outstanding, the FFEL ECASLA portfolio segment 

remains the major component of the FFEL Guaranteed portfolio of net credit program 

receivables as of Sept. 30, 2021 but declined by $31.0 billion (42.4%) during the five-year 

period shown. This decrease was mainly the result of collections of principal and the impact of 

borrowers consolidating their loans under the Direct Loan Program, to take advantage of more 

favorable repayment options available in that program.

The FFEL ECASLA portfolio declined from $46.3 billion as of Sept. 30, 2020 to $42.1 billion as 

of Sept. 30, 2021. Outstanding principal declined $48.1 billion to $45.8 billion and the subsidy 

allowance increased from $11.0 billion to $12.5 billion. Subsidy allowance amounts reduce the 

net receivable balance. The decrease in the interest receivable from $9.2 billion to $8.9 billion 

also reduced the net receivable balance. Despite this decrease, the proportion of FFEL 

ECASLA loans were approximately 72% of the total $58.2 billion of FFEL loans outstanding as 

of the current year-end.

Over the same five-year period, the smaller FFEL Guaranteed portfolio declined from 

$29.3 billion to $16.1 billion. The FFEL Guaranteed portfolio declined from $21.1 billion as of 

Sept. 30, 2020 to $16.1 billion as of Sept. 30, 2021 ($5.0 billion difference). Outstanding 

principal declined $0.4 billion to $36.3 billion and the subsidy allowance increased by $4.6 billion 

to $35.2 billion. Subsidy allowance amounts, which reduce the net receivable balance, were 

slightly offset by an increase in the interest receivable of $0.1 billion to $15.0 billion.
38 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

The overall impact of changes in the principal, accrued interest, and subsidy components of the 

FFEL portfolio are shown below in Figure 18.13 The reduction in FFEL recipients during the 

period FY 2017–21 also demonstrates the impact of debt consolidations and refinancing on the 

outstanding portfolio balance.

Figure 18: Components of FFEL Receivables, Net

(Dollars in Billions)

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

Other Credit Program Receivables, Net. As shown in Figure 19 below, TEACH Grants, 

Perkins Loans, and HEAL Loans make up the third segment of Credit Programs Receivable, net 

that FSA reports on its balance sheet.

Figure 19: Other Loan Portfolio

(Dollars in Millions) 

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

13 Recipients in Millions for FY 2017–18 are based on data published by the FSA Data Center, at StudentAid.gov/portfolio.

FY 2019 data are taken directly from NSLDS database. Also, the FY 2018 data published in the FY 2018 Annual Report, taken 

directly from NSLDS database, have been replaced with data subsequently published by the Data Center. 
Fiscal Year 2021 Annual Report | Federal Student Aid 39

Management’s Discussion and Analysis

This segment, known as Other Credit Program Receivables, Net, increased by 18.1% during the 

past five years, but still accounted for only 0.1% of FSA’s total loan portfolio throughout that 

period. Other Credit Program Receivables, net ended FY 2021 with a balance of $1.7 billion, a 

$12.8 million increase compared to the prior year-end. 

Composition of FSA Liabilities. FSA’s liabilities represent probable and measurable future 

outflows of resources arising from past transactions or events. As of Sept. 30, 2021, FSA had 

total liabilities of nearly $1.2 trillion, a decrease of $0.2 billion or 1.8% less than the 

Sept. 30, 2020 total, in contrast to the 0.3% increase in FSA’s total assets.

Debt. FSA’s debt is the primary component of its liabilities, accounting for 98.6% of the total. 

FSA’s debt balance of approximately $1.2 trillion as of Sept. 30, 2021 is 2.3% less than the 

prior-year amount. As shown in Figure 20, the Direct Loan Program was the principal debt 

component throughout the FY 2017–21 period and ended FY 2021 with a balance of nearly 

$1.1 trillion, 1.5% less than the prior-year amount, representing 93.5% of total debt.

Figure 20: Comparison of Debt

(Dollars in Billions)

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

FSA borrows funds from Treasury to support the disbursement of new loans, and for the 

payment of credit program outlays and related costs. FSA then makes repayments after 

considering its cash position and liability for future cash outflows, as mandated by the Federal 

Credit Reform Act of 1990 (FCRA). The net impact of these activities on the outstanding debt 

portfolio are illustrated for the Direct Loan and FFEL Programs in Figures 21 and 22

respectively.
40 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Figure 21: Direct Loan Program Net Financing Activity

(Dollars in Billions)

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

Direct Loan net financing activity (Figure 21) also accounted for most of the overall increase in 

FSA’s outstanding debt level during the same five years. By comparison, in the absence of any 

borrowing for new loan disbursements (Figure 22), FFEL-related debt decreased consistently 

from FY 2017–21. These changes in net financing activity for Direct Loan and FFEL Programs 

reflect the impact of the SAFRA Act on disbursements, interest rate driven loan consolidations, 

and related changes in estimated subsidy costs.

Figure 22: FFEL Loan Program Net Financing Activity

(Dollars in Billions)

*Note: Line items may include rounding adjustments to reconcile to the total amount being reported. 
Fiscal Year 2021 Annual Report | Federal Student Aid 41

Management’s Discussion and Analysis

Statement of Net Cost

The Statement of Net Cost is the federal financial statement that presents the net cost of 

operations for FSA programs. FSA’s net cost is the gross cost incurred during its operations 

less any exchange (i.e., earned) revenues earned from its activities. Gross cost is composed of 

the cost of credit programs, grant programs, and operating costs. Exchange revenues are 

primarily interest earned on credit program loans.

Figure 23: Composition of Net Cost

(Dollars in Billions) 

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

As shown in Figure 23, FSA’s earned revenues (mainly interest and fee accruals net of subsidy 

amortization) increased from $35.8 billion in FY 2017 to $39.7 billion in FY 2021, an overall 

increase of 10.9% or about 2.7% annually on average. By comparison, FSA’s gross costs 

fluctuated much more widely over the same period, from $73.7 billion in FY 2017 to 

$177.4 billion in FY 2021, mainly as the result of subsidy-related transactions. As a result, net 

costs fluctuated also, most notably increasing 263.3% from $37.9 billion reported in FY 2017 to 

$137.7 billion in FY 2021. FSA’s total costs exceeded its earned revenues in both years, but the 

margin was greater in FY 2021 by $5.9 billion, of which the Direct Loan program decrease of 

$7.0 billion was largely offset by the $11.5 billion increase in FFEL net costs and the $1.3 billion 

increase in Grants net costs.

For the Direct Loan Program, the $6.9 billion decrease in net costs was primarily the result of a 

decrease in gross costs ($6.2 billion). Similarly, the $11.5 billion increase in FFEL Program net 

costs was mostly the result of a $11.5 billion increase in gross costs.

Both the FFEL Program and Direct Loan Program are mandatory programs whose costs are 

largely driven by Federal borrowing costs, prevailing interest rates, in-school interest benefits for 

borrowers, the costs related to borrower defaults, and loan volume demand. The programs are 

funded by mandatory and indefinite budget authority and therefore do not receive annual 

appropriations. For more details regarding the inherent difficulty of estimating the impact of 

these complex factors, please refer to Note 5. 
42 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Statement of Changes in Net Position

The Statement of Changes in Net Position presents those amounts that caused the net position 

section of the Balance Sheet to change from the beginning to the end of the reporting period 

and is affected by changes in its two components, cumulative results of operations and 

unexpended appropriations.

FSA’s net position as of Sept. 30, 2021, was $7.6 billion, an increase of $27.0 billion compared 

to the previous Sept. 30 net position. The difference reflects an increase in the cumulative 

results of operations by the amount of $25.7 billion, from $(54.4) billion in FY 2020 to 

$(28.7) billion in FY 2021, of which $30.0 billion of the increase related to the Direct Loan

Program and $(4.7) billion was attributable to the FFEL Program. In addition, unexpended 

appropriations increased by $1.3 billion, of which $1.4 billion were attributable to the combined 

Perkins Loan and Grants Programs, with the $0.3 billion decrease in Direct Loan Program 

unexpended appropriations accounting for most of the remaining difference.

Statement of Budgetary Resources

The Statement of Budgetary Resources compares the budgetary resources provided with the 

status or execution of those resources. It also details the composition of the resources and 

shows the amount of net outlays. Appropriations are available to cover the subsidy cost of each 

loan program and administrative expenses. Subsidy expense represents the difference between 

the net present value of expected future cash flows and the face value of each loan portfolio. 

Appropriation authority is available as needed on a permanent basis to finance costs resulting 

from loans guaranteed in the years before FY 1992. The Pell Grant Program receives 

appropriations to cover actual grant disbursements.

This statement shows that as of Sept. 30, 2021, FSA had $381.0 billion in combined total 

budgetary resources, of which $39.8 billion remained unobligated and not apportioned. This 

compared to $389.1 billion in budgetary resources twelve months earlier of which $38.9 billion 

were unobligated and not apportioned. Overall budgetary resources decreased by $8.1 billion or 

2.0%, primarily as the net result of increases in budgetary resources for the Direct Loan

Program ($6.6 billion). 

FSA’s Net Outlays after Distributed Offsetting Receipts as of Sept. 30, 2021, were 

$125.5 billion, an increase of $21.1 billion or 20.2% compared to the prior Sept. 30 amount of 

$104.4 billion. The Direct Loan Program accounted for a $19.5 billion increase, with a FFEL 

increase of $1.9 billion and a $0.3 billion decrease attributable to the combined Perkins Loan 

and Grants Programs. FFEL Program activity was mainly due to an increase in net outlays 

$6.6 billion, together with a decrease in distributed offsetting receipts $6.3 billion. Additional 

information is provided in Note 12.

Limitations of Financial Statements 

The principal financial statements are prepared to report the financial position, financial 

condition, and results of operations, pursuant to the requirements of 31 U.S.C. § 3515(b). The 

statements are prepared from records of Federal entities in accordance with Federal generally 

accepted accounting principles (GAAP) and the formats prescribed by OMB. Reports used to 
Fiscal Year 2021 Annual Report | Federal Student Aid 43

Management’s Discussion and Analysis

monitor and control budgetary resources are prepared from the same records. Users of the 

statements are advised that the statements are for a component of the U.S. Government.

Financial Management Highlights

Financial Impact of the Coronavirus Disease 2019 

In response to the COVID-19 emergency, Congress enacted the CARES Act on 

March 27, 2020. As part of the CARES Act, FSA received $40.0 million to support efforts related 

to loan forbearance, default collection wage garnishment assistance for student loan borrowers, 

servicing system modifications, systems support of COVID-19 telework, and hiring of temporary 

employees. In FY 2020, FSA obligated $13.9 million, committed approximately $3.0 million, and 

the remaining balance carried over into FY 2021.

The Coronavirus Response and Relief Supplemental Appropriations Act, 2021, which was part 

of the Consolidated Appropriations Act, 2021, was signed into law December 2020, and 

provided additional relief funding in the amount of $30 million. In FY 2021, FSA obligated 

$24.0 million and carried over $6.0 million into FY 2022. The American Rescue Plan Act of 2021

which was signed into law in March 2021 and provided $91.1 million in relief funding. During 

FY 2021, FSA obligated $42.9 and carried over $48.2 million into FY 2022.

The CARES Act provided emergency relief measures in the Direct Loan program that included 

suspending loan payments, halting collections on defaulted loans, and setting interest rates to 

0% through Sept. 30, 2020. In response, FSA stopped all federal wage garnishments and 

collection actions for borrowers with federally held loans in default, and FSA paid approximately 

2.3 million refunds of Treasury Offset Program and Administrative Wage Garnishments totaling 

$2.5 billion. Emergency relief measures were repeatedly extended and expanded subsequent to 

the CARES Act. On Aug. 6, 2021, the COVID-19 relief measures were extended through 

Jan. 31, 2022.
44 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

Analysis of Systems, Controls, and Legal 

Compliance

FSA adheres to the Government Accountability Office (GAO) published guidance on internal 

control and recognizes that internal control is an integral part of managing an organization. 

Internal control includes the plans, methods, and procedures used to meet the organization’s 

missions, goals, and objectives. In carrying out these components of internal control, FSA 

supports an environment for performance-based management. Internal control also serves as 

the first line of defense in safeguarding assets and preventing and detecting errors and fraud. 

Internal control helps government program managers achieve desired results through effective 

stewardship of public resources.

Internal controls should provide reasonable assurance that the objectives of the agency are 

being achieved in the following categories:

• Effective and efficient operations

• Reliability of reporting for internal and external use

• Compliance with applicable laws and regulations14

FSA is responsible for establishing and maintaining effective internal control over reporting and 

financial management systems that meet the objectives of the Federal Managers’ Financial 

Integrity Act of 1982 and annually assessing the effectiveness and efficiency of its internal 

controls over operations and compliance with applicable laws and regulations in accordance 

with OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and 

Internal Control (OMB Circular A-123). FSA continues to coordinate with the Department and 

internally to execute these requirements.

Based on the results of this year’s assessment, FSA reported to the Department’s management 

that its internal control over operations, including internal controls intended to prevent, detect 

and recover improper payments, and compliance with applicable laws and regulations, as of 

Sept. 30, 2021, was operating effectively, with the exception of the Payment Integrity 

Information Act of 2019 as noted in the Legal Compliance section of the Department’s AFR. 

This section also includes information regarding the Department’s compliance with the Debt 

Collection Improvement Act of 1996, as amended by the Digital Accountability and 

Transparency Act of 2014. 

In addition, FSA, working with the Department, conducted its current year assessment of the 

effectiveness of internal control in accordance with the requirements of OMB Circular A-123, 

Appendix A, Management of Reporting and Data Integrity Risk (OMB Circular A-123, Appendix 

A). OMB Circular A-123, Appendix A provides requirements to agencies for conducting 

management’s assessment of internal control over reporting. The scope of FSA’s assessment 

focuses on new processes and processes with high-risk profiles that are tested every year. 

Processes with lower-risk profiles are reviewed and tested on a 4-year cycle. In FY 2021, FSA 

continued to rely on audits of external service providers conducted by independent public 

14 Government Accountability Office Standards for Internal Control in the Federal Government, GAO-14-704G, Sept. 10, 2014, p.5.
Fiscal Year 2021 Annual Report | Federal Student Aid 45

Management’s Discussion and Analysis

accountants in accordance with Statement on Standards for Attestation Engagements Number 

18, Reporting on Controls at a Service Organization.

FSA’s participation in the Department's implementation of the requirements of OMB Circular 

A-123, including Appendix A, enables it to continue to build upon its internal control framework. 

This framework will be used in continuing efforts to monitor and improve internal control. Please 

refer to the Analysis of Systems, Controls and Legal Compliance section of the 

Department’s AFR for additional information related to management’s assurances and 

disclosures.

Please also refer to the Analysis of Systems, Controls and Legal Compliance section of the 

Department’s AFR for information related to the Department's compliance with the Federal 

Financial Management Improvement Act of 1996. 

FSA’s financial management systems strategy is formulated and managed as part of the 

Department’s strategy. For details on FSA’s financial management systems strategy, please 

refer to the Financial Management Systems Strategy narrative found in the Management’s 

Discussion and Analysis section of the Department’s AFR. 
46 Fiscal Year 2021 Annual Report | Federal Student Aid

Management’s Discussion and Analysis

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Fiscal Year 2021 Annual Report | Federal Student Aid 47

Annual Performance Report 

Annual Performance Report (Unaudited)
48 Fiscal Year 2021 Annual Report | Federal Student Aid

Annual Performance Report 

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Fiscal Year 2021 Annual Report | Federal Student Aid 49

Annual Performance Report

Overview of the Annual Performance Report

The Annual Performance Report section of the FSA FY 2021 Annual Report provides detailed 

performance information on FSA’s progress in achieving the goals and objectives described in 

the FY 2020–24 Strategic Plan. The subsections of the Annual Performance Report are listed 

and briefly discussed below:

• Introduction to the Annual Performance Report: The Introduction to the Annual 

Performance Report provides an overview of the Annual Performance Report and 

includes a high-level summary of the FY 2020–24 Strategic Plan. 

• Performance Results by Strategic Goal: This subsection details the results of each 

overall strategic goal by strategic objective and performance metric. Each strategic 

objective provides an overview and a performance summary and analysis, including 

noteworthy progress and focused improvement. Each performance metric includes a 

table that presents five years of data results, where available, as well as its current 

target and results. The performance metric section also includes a discussion of the 

metric definition, data source, and performance period. 

• Fiscal Year 2021 Accomplishments of Federal Student Aid: This subsection 

describes additional accomplishments that were not measured by the performance 

metrics included in the strategic plan but were the result of initiatives that FSA undertook 

to support the implementation of the strategic plan or legislative changes.
50 Fiscal Year 2021 Annual Report | Federal Student Aid

Annual Performance Report

Introduction to the Annual Performance Report

The FSA strategic plan guides FSA toward achieving its vision “To be the most trusted and 

reliable source of student financial aid, information, and services in the nation.” Through the 

strategic plan, FSA documents the strategic goals, objectives, and performance metrics of the 

organization. The FSA Annual Report provides a detailed view of the past year’s goals, 

challenges, and accomplishments in the context of FSA’s FY 2020–24 Strategic Plan. 

The strategic goals are: 

• Strategic Goal 1: Empower a High-Performing Organization

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

and Borrowers We Serve

• Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness

• Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards

• Strategic Goal 5: Enhance the Management and Transparency of the Portfolio

FSA is committed to continuous performance improvement and conducts frequent reviews of its 

strategic plan. During FY 2021, FSA reviewed the FY 2020–24 Strategic Plan and identified 

changes that would improve delivery of its mission and enhance its performance reporting. As a 

result of its strategic review, FSA refined its performance measurements to reflect better 

strategies in driving progress towards achieving strategic objectives and present a more 

accurate measure of FSA’s performance in meeting the goals. To read more about performance 

measure and metric target changes, refer to the Appendices section. 

FSA supports the Department’s overall strategic goals and objectives, as defined in the 

Department’s FY 2018–22 Strategic Plan. During the COVID-19 emergency and administrative 

forbearance period, the top priority remains engagement and outreach communications with 

students, parents, borrowers, institutions, and loan servicers to inform them about student aid 

information and relief measures for eligible loans. Currently, the Department is drafting a new 

strategic plan and will publish its Department of Education Strategic Plan for Fiscal Years 2022–

26 in February 2022. The Department’s strategic plan will establish updated strategic goals, 

objectives, and performance indicators to assess progress toward the Administration’s priorities 

of increasing postsecondary education access, affordability, completion, and post-enrollment 

success. FSA will review its strategic plan and align future strategies and actions to support the 

Department’s new priorities in FY 2022 to deliver an enhanced customer experience to 

borrowers through effective communication and a manageable return to repayment process.

FSA is required, by the PBO-enabling legislation, to report annually its level of performance and

the associated results. This section, the Annual Performance Report, satisfies this annual

reporting requirement. For additional performance-related information—including a more

complete discussion of FSA’s mission, organization, and performance management—refer to

the Management’s Discussion and Analysis section. To read more about FSA’s strategic 

plans refer to StudentAid.gov/strategic-planning-and-reporting.
Fiscal Year 2021 Annual Report | Federal Student Aid 51

Annual Performance Report

Strategic Goals, Objectives, Performance Metrics, 

and Results 

In FY 2021, FSA had 38 performance metrics. Of these, 22 metrics were met or exceeded, 6 

metrics performed below the target and 3 metrics were baselined or did not have an established 

target. Additionally, 1 metric was not available before publication of this Annual Report, and 6 

metrics were not able to establish a target due to the COVID-19 administrative forbearance 

period.

The following tables present the performance metric results under the applicable FY 2020–24 

Strategic Objective. To read more about performance measurement and metric target changes 

in FY 2021, refer to the Appendices section. 

Table 11: Strategic Goal 1: Empower a High-Performing Organization

Strategic Objective 1.1: Improve employee engagement and workplace inclusion to develop 

and retain talent, improve employee satisfaction, and engage in 

effective succession planning.

Performance Metrics FY 2021

Target

FY 2021

Actual Result

1.1 Improve Federal Employee Viewpoint Survey score: 

Employee Engagement Index. FSA’s scores will improve 

the first year and continue to increase 1–2% annually.

71–72% N/A N/A

Strategic Objective 1.2 Expand employee skills and capabilities to support Next Gen FSA.

Performance Metrics FY 2021

Target

FY 2021 

Actual Result

1.2.A Identification, validation, assessment, and prioritization 

of skill competencies, required grades, and strategic 

alignment in accordance with the workforce 

requirements study results.

50.0% 

completed 

(100% of 

organization 

competed)

100% Met

1.2.B Conduct targeted multi-year training based on identified 

workforce needs. Baseline 62.0% Baseline

1.2.C Perform a training analysis at each performance review 

period within the fiscal period.

85% average 

course 

satisfaction 

assessment 

rating (SAR) 

per year

96.0% average 

course 

satisfaction 

assessment 

rating (SAR) 

per year

Met
52 Fiscal Year 2021 Annual Report | Federal Student Aid

Annual Performance Report

Table 12: Strategic Goal 2: Provide a World-Class Customer Experience to the Students, 

Parents, and Borrowers We Serve

Strategic Objective 2.1: Ensure that all students can easily access information on federal 

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

repayment options.

Performance Metrics FY 2021

Target

FY 2021

Actual Result

2.1.A Number of visits (sessions) demonstrating adoption of 

the updated StudentAid.gov site. 210 million 241 million Met

2.1.B Percentage of high school seniors submitting the 

FAFSA. 66.25% 60.87% Not met

2.1.C Number of customers submitting the FAFSA via a mobile 

platform—the myStudentAid mobile app or fafsa.gov.

2.6 million 

submissions

2.5 million 

submissions Not met

2.1.D Persistence among first-time filing aid recipients. 81.0% 81.1% Met

Strategic Objective 2.2: Provide seamless, easy, personalized digital interactions equal with 

top financial institutions in the delivery of financial aid products and 

services.

Performance Metrics FY 2021

Target

FY 2021

Actual Result

2.2.A Number of customers checking loan balances via the 

myStudentAid mobile app. 1.5 million 1.6 million Met

2.2.B Number of borrowers who view their aid summary 

information on StudentAid.gov. 8.36 million 13.10 million Met

2.2.C Number of users of “Aidan”, the StudentAid.gov virtual 

assistant. 750,000 1,566,488 Met

2.2.D Transactional email volume for outreach and 

communications to customers. 92.8 million 189.7 million Met

2.2.E Recurring campaign email delivery volume for outreach 

and communications to customers. 33.8 million 41.7 million Met

2.2.F American Customer Satisfaction Index (ACSI) Aid 

Lifecycle Survey score. 73–75 71.4 Not met

2.2.G Customer Satisfaction Survey(s) for StudentAid.gov site 

and associated tools.

Survey 

Development 

and 

Implementation

Developed 

survey 

Not met
Fiscal Year 2021 Annual Report | Federal Student Aid 53

Annual Performance Report

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

customers’ integrated experience.

Performance Metrics FY 2021

Target 

FY 2021

Actual Result

2.3.A Quality Standard for Average Speed to Answer (ASA) at 

all Call Centers.

Equal to or less 

than 60

seconds 

24.0 seconds Met

2.3.B Quality Standard for Abandon Rate (AR) for Incoming 

Calls at all Call Centers.

Equal to or less 

than 2% 0.9% Met

Strategic Objective 2.4: Simplify the communication and processes associated with borrower 

repayment plans.

Performance Metrics FY 2021

Target 

FY 2021

Actual Result

2.4.A Number of borrowers using Make a Payment feature to 

pay student loans. N/A 22,366payments N/A

2.4.B Percentage of borrowers using auto-debit. N/A N/A N/A

2.4.C Percentage of users who start and complete the Public 

Service Loan Forgiveness (PSLF) Help Tool by 

generating a PSLF form.

Baseline 34.5% Baseline

Table 13: Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness

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

comprehensive suite of monitoring tools. 

Performance Metrics FY 2021 

Target 

FY 2021

Actual Result

3.1.A FSA will annually conduct an Institutional Review for its 

participating partners including schools, third-party 

servicers, and financial institutions.

60% 62.6% Met

3.1.B Number of Borrower Defense (BD) applications 

adjudicated (subject to existing BD regulations). 65,000 65,500 Met

Strategic Objective 3.2: Strengthen partner engagement and provide effective outreach and 

assistance.

Performance Metrics FY 2021 

Target 

FY 2021

Actual Result

3.2.A FSA will measure institutional participation rates in Title 

IV training and specialized technical assistance 

programs.

Baseline 88.0% Baseline

3.2.B FSA will enhance the self-service training resource and 

informational platform to improve communication with 

participating partners, including schools, third-party 

servicers, and financial institutions.

10% 18.0% Met

3.2.C Ease of doing business with FSA. 75–77% 75.0% Met
54 Fiscal Year 2021 Annual Report | Federal Student Aid

Annual Performance Report

Table 14: Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards

Strategic Objective 4.1: Implement business partner and vendor systems that house, 

manage, and provide systems supporting FSA business processes, 

outreach and awareness focused on oversight, enforcement, 

infrastructure, systems, and data. 

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

4.1 Increase partner/vendor cybersecurity effectiveness by 

reducing the total number of FSA system assessment 

findings by 20% per year.

2,800 3,976 Not met

Strategic Objective 4.2: Improve student privacy data and cybersecurity controls of 

Institutions of Higher Education (IHEs) through outreach and 

communication, to mitigate future cyber-incidents and breaches.

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

4.2.A Increase Institutions of Higher Education cybersecurity 

effectiveness by reducing GLBA cybersecurity noncompliance by 20% per year.

177 126 Met

4.2.B Reduce incident reporting time at Institutions of Higher 

Education. 87.5 days 32.7 days Met

Strategic Objective 4.3: Build an effective cybersecurity culture through employee 

awareness, training and accountability focused on protecting 

systems and data.

Performance Metrics FY 2021 

Target 

FY 2021

Actual Result

4.3 Decrease the number of employee-related cybersecurity 

events associated with inappropriate use, distribution, or 

storage of Personally Identifiable Information (PII) and 

financial information by 20% a year.

1,440 2,642 Not met

Table 15: Strategic Goal 5: Enhance the Management and Transparency of the Portfolio

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

portfolio performance.

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

5.1.A Initiate monthly reporting to the public through the FSA 

data center.

Standardize 

reports and pilot 

self-service module

Reports 

standardized 

and pilot 

completed

Met

5.1.B Outstanding Direct Loan Portfolio in Current 

Repayment Status. N/A 100% N/A
Fiscal Year 2021 Annual Report | Federal Student Aid 55

Annual Performance Report

Strategic Objective 5.2: Provide analytics and operational support for a customer-centric, 

data-driven, performance-based organization.

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

5.2.A Using the Enterprise Risk Management (ERM) 

Maturity Model, move the organization towards a “Risk 

Intelligent” position. The model defines organizational 

progress in the following way: 

• 1 = Initial; 

• 2 = Fragmented; 

• 3 = Integrated; 

• 4 = Risk Intelligent.

2.5 2.5 Met

5.2.B Implementation timeline for FUTURE Act.

Develop data 

sharing procedures 

and technology 

interface. Enable a 

non-production 

proof of concept 

that will inform the 

FAFSA solution.

Developed 

FAFSA and 

TPD 

simulators 

and the FADDX 

interface 

connection 

with the IRS

Met

Strategic Objective 5.3: Leverage portfolio analytics to drive improved outcomes for 

customers and taxpayers.

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

5.3.A Identify and provide intervention actions for 

customers at risk of default.

Implement pilot for 

default prevention 

program

Developed, 

tested, and 

deployed two 

additional 

projects

Met

5.3.B Default rate by borrower count. N/A N/A N/A

5.3.C Percent of borrowers > 90 days delinquent. N/A 0% N/A

5.3.D Percentage of borrowers who did not make the first 

three payments. N/A NA N/A

Strategic Objective 5.4: Increase vendor performance through quality management activities 

centered on customer service and product delivery.

Performance Metrics FY 2021 

Target

FY 2021

Actual Result

5.4 Conduct three vendor examinations annually. 3 6 Met
56 Fiscal Year 2021 Annual Report | Federal Student Aid

Annual Performance Report

Understanding the Performance Section

This section presents detailed performance results, which include a thorough discussion of 

progress made to date in achieving the strategic goal and the data used to assess performance.

How to read the performance data included in this section. This section is organized by the 

five strategic goals. For each strategic goal, this section provides an overview of the goal, lists 

the associated objectives that support the strategic goal, and details the metrics used to 

measure performance.

• Table: Identifies the performance metric associated with the strategic goal and provides 

the historical actual results for the four previous fiscal years (if available); the target and 

actual result for the current fiscal year; and an indicator as to whether FSA met the 

performance metric for each fiscal year reported. The following is the legend for the 

performance result indicator included in the table.

Table 16: Performance Result Indicator Legend

Performance Result Indicator

Performance result met or exceeded the target. Met

Performance result did not meet the target. Not met

Performance result is baselined. Baseline data will provide a historical point of reference to 

inform program planning such as target setting. Baseline

Performance metric is a new or revised metric and prior year results are not available. – 

Performance result is not applicable. N/A

The performance metric results reported are as of fiscal year-end, Sept. 30, 2021, 

unless otherwise noted. If the required data as of fiscal year-end are not available in time 

for inclusion in this report, data as of the most recent period available are used. Data as 

of fiscal year-end may not be available in some instances, where the required data are 

obtained from external sources including state and private nonprofit guaranty agencies, 

lenders and loan servicers, and grant and loan recipients.

• Notes: Identifies trends and data availability.

• Metric Definition: Provides a brief explanation of the metric.

• Data Source: Provides the source of data required to calculate the actual result for the 

performance metric and any calculation required to determine the actual result.

• Period of Performance: Indicates the time period of the data reference.
Fiscal Year 2021 Annual Report | Federal Student Aid 57

Annual Performance Report

Strategic Goal 1: Empower a High-Performing Organization

Goal Leader: Director, Executive Services

Table 17: Goal Objectives

Strategic Goal 1: Empower a High-Performing Organization.

Strategic Objective No. Strategic Objective

Strategic Objective 1.1

Improve employee engagement and workplace inclusion to develop 

and retain talent, improve employee satisfaction, and engage in 

effective succession planning.

Strategic Objective 1.2 Expand employee skills and capabilities to support Next Gen FSA.

Goal Spotlight

For FSA to continue to excel as a high-performing organization and meet the challenges of the 

current environment, it must invest in the knowledge, skills, and abilities of its employees. To 

meet the expectations outlined in the FY 2020–24 Strategic Plan, it is essential that staff are 

trained, aligned, and equipped to provide best-in-class customer service while fulfilling the 

fiduciary responsibilities of the organization.

FSA has assessed its progress in preparing its workforce using four related metrics under

Strategic Goal 1. The first metric is derived from the OPM Federal Employee Viewpoint Survey 

(FEVS). The FEVS, contains questions designed to measure employees' feelings and attitudes 

in topic areas such as talent development, leadership, management/supervision, knowledge 

management, performance culture, employee engagement, and other areas important to 

creating an effective work environment. FSA focuses on key questions centered on employees’ 

intrinsic work experience, and their relationship with supervisors and organizational leaders. 

These questions are specifically in the Employee Engagement Index (EEI) within the FEVS. 

At the onset of the strategic plan, FSA launched an organizational workforce requirements study 

to provide FSA with the ability to better forecast human capital needs and inform planning for 

staff training, transfers, promotions, and talent acquisition. The study has also provided 

important information to illustrate the connectivity between the competencies needed for specific 

positions throughout FSA, and the competencies that are available with the individuals in each 

job. By working to close the competency gaps both identified in the study, and through other 

internal observations, FSA has made an effort to target ways to expand organizational skills and 

capabilities in each business area during FY 2021. FSA have been successful in supporting 

employee growth through a diverse range of development initiatives and training opportunities. 

In this way, FSA has committed to increase employee performance, engagement, and retention 

using various learning modalities.

To ensure that the commitment to training and development has been beneficial to both the 

organization and the employees throughout FY 2021, FSA has measured the effectiveness of 

this work through detailed analysis and evaluation of participants. This analysis has begun to 

assist FSA in measuring organizational capability and performance potential. In addition, the 

extant data has supported internal requests for developmental resources and has allowed 

leadership to evaluate the return on investment these training initiatives have had on the 

organization.
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Strategic Objective 1.1

Improve employee engagement and workplace inclusion to develop and 

retain talent, improve employee satisfaction, and engage in effective 

succession planning.

Overview

FSA remains committed to enabling its organizational success by working towards 

improvements in the provision of resources, staffing, training, and employee work-life balance. 

In conjunction with creating an environment with the appropriate tools and programs for staff, 

FSA is also striving to foster and support a diverse workforce where all employees feel included, 

connected, and engaged in its mission. In FY 2021, FSA focused on improving communication 

throughout the organization, recognizing employee accomplishments, and benchmarking 

employee engagement to promote a workplace conducive to both productivity and belonging. 

The FEVS is a key tool for measuring employee engagement throughout the federal 

government and within FSA. The FY 2020 FEVS results were made available in January 2021 

and FSA Directorates used the data to develop and execute FEVS action plans to engage 

employees.

FSA employees have utilized enhanced telework, since March 2020, due to the COVID-19 

national emergency. In this remote work setting, FSA has focused on strengthening employee 

communication channels that provide information and promoting connections with colleagues 

and leadership. Communication channels provide information and feedback (e.g., The Source

Employee Newsletter, FSA First Class, Management Services Regional Liaison Newsletter, 

FSA Communications emails). The FSA virtual photo share presentation, quarterly recognition 

awards, and the annual FSASSYS (employee-nominated) award ceremony provided 

opportunities for employees across the nation to be recognized and connected. 

As stated, the leadership within FSA believe that workplace diversity, inclusion, and accessibility 

are necessary for any organization to reach its full potential. FSA has implemented 

programming that is aligned with the President's Executive Order 13985 on Advancing Racial 

Equity and Support for Underserved Communities Through the Federal Government, by hosting 

cultural and diversity observances (e.g., Asian Pacific Islander, Pride Month, COO’s Fitness 

Challenge, Wellness events, etc.) and discussing diversity, inclusion, and accessibility 

strategies in The Source employee newsletter. FSA also actively participated in the first ED 

In Action Annual Summit, sponsored by the ED Diversity and Inclusion Council.

FY 2021 Performance Summary and Analysis

There is one performance metric for this strategic objective. The FY 2021 FEVS survey score 

data was not available at the time of publication for this Annual Report. The goal for Strategic 

Objective 1.1 is an increase in the employee engagement score by 1–2% from the previous 

FEVS EEI. The FY 2020 FEVS score data became available in January 2021. In FY 2020, FSA 

exceeded its target with a 9% increase in the EEI from 61% to 70%.
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Key Successes and Opportunities

To achieve this objective, FSA first implemented a communication campaign to increase 

employee participation in the FEVS survey. The participation rate for FY 2020 increased from 

60% to 72%, a 12% increase over the FY 2019 FEVS survey. FSA values the perspectives of 

new employees who were ineligible to participate in the OPM FEVS survey and worked with 

Human Resources and the union (American Federation of Government Employees (AFGE)

Local 252) to survey new employees (hired November 2019 – December 2020) on questions

similar to the FEVS survey. 

FSA also held focus groups to better understand the results of the FEVS surveys and hear 

potential solutions to employee engagement challenges. These focus groups provided notable 

solutions, which led to creation of the Leadership Conversation series, a redesign of the new 

employee Onboarding program, monthly employee communication with The Source newsletter, 

and weekly communication with the “In Case You Missed It” email campaign. 
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Performance Metric 

Performance Metric 1.1. Improve Federal Employee Viewpoint Survey score: Employee 

Engagement Index. FSA’s scores will improve the first year and continue to increase 1–2% 

annually. 

Table 18: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 69.7% 62.0% 61.0% 70.0% 71%–72% N/A

Performance Result Met Not met Met Met N/A

Note: The result for this metric for FY 2021 was unavailable at time of publication of FY 2021 Annual 

Report. The table above reflects the updated result for FY 2020. 

Metric Definition: OPM FEVS measures employees' perceptions of whether, and to what extent, 

conditions and characteristics of successful organizations are present in their agencies. The Engagement 

Index assesses the critical conditions conducive for employee engagement (e.g., effective leadership, 

work which provides meaning to employees, etc.). It is made up of three subfactors: Leaders Lead, 

Supervisors, and Intrinsic Work Experience.

Data Source: FY 2021 FEVS survey.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 1.2

Expand employee skills and capabilities to support Next Gen FSA.

Overview

FSA has progressed in the implementation of its human capital framework by identifying, 

assessing, and validating the required skill competencies to forecast future staffing needs based 

on organizational priorities and current workloads. The workforce study has successfully 

documented staffing needs by occupation and organization.

A highly skilled, engaged, and stable workforce is critical to providing outstanding customer 

service and meeting the agency’s mission. FSA implemented 23 more training and development 

initiatives compared to FY 2020 and trained approximately 62% of the workforce through either 

a virtual instructor-led or hybrid learning environment. In addition, FSA has implemented a 

strategic evaluation program to analyze the quality and benefits of the developmental 

opportunities and refine the Training and Development Plan. FSA’s overall Satisfaction 

Assessment Rating (SAR) exceeded the target by 11%. 

FSA also redesigned its Onboarding program for new employees. In FY 2021, 20 weeklong or 

modified sessions were conducted for employees entering new roles. To support acclimating 

new employees to their new role, a continuous development component to Onboarding was 

added, which includes an enrichment series of remote learning opportunities to enhance 

personal and professional development. 

A new sponsor component was added to the Onboarding program, to provide specific business 

area information, expectations, and acclimate new team members to the performance-based 

culture. Plans to enhance the sponsor component in FY 2022 include training and workshops on 

Individual Development Planning, Career Planning, Change Management, and Team-Building 

initiatives.

FY 2021 Performance Summary and Analysis

There are three performance metrics for this strategic objective. Two metrics met their annual 

targets, while one metric completed a baseline assessment in FY 2021, which will be used to 

set targets for future years.

Key Successes and Opportunities

The Workforce Requirements Study identified and measured more than 1,660 work processes 

and predictive staffing models. A comprehensive database of current and future authorized and 

required human capital positions (e.g., Table of Organization) is currently being updated and 

maintained.

FSA exceeded the training and development initiatives provided to employees as compared to 

FY 2020 by taking advantage of virtual instructor-led and hybrid learning formats and delivery 

methods. This resulted in the successful training of 62% of the workforce while in a telework 

posture for the entirety of the fiscal year. Approximately 18% of those trained were managers. In 

addition, several of the courses or programs delivered provided supervisory training credit to 
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assist FSA managers in meeting the Department’s New and Experienced Supervisory 

Requirement Training as per the Department’s Human Capital Policy 412-1. 

Not only did FSA measure its success by the number and percentage of trainings offered and 

taken by staff, but also by direct feedback from the employees on satisfaction. By also 

exceeding the baseline SAR of attended training, FSA has set a standard for employee 

expectations in FY 2022. To assist with the management of employee feedback, an external 

platform is now utilized to develop, track, administer, and analyze course evaluation data. This 

improvement has been vital in the collection and analysis of course data, particularly for virtual 

trainings, and will support improvements in training delivery going forward. 

FSA held its second annual Employee Learning Week, which is a collaboration with the 

Department’s Talent and Development Division and Plain Language Liaison for the National 

Center for Education Research, to provide developmental opportunities to support the 

professional growth and development of FSA employees. The theme for this year’s initiative 

was “Taking Charge of Your Career”. The initiative was tremendously successful, with over 430 

FSA employees participating, which contributed to 38% of FSA’s second quarter training total.

In FY 2021, FSA launched the Centralized Training Fund initiative, which resulted in the 

consolidation of training funds and a Training Review Team to oversee the allocation and 

distribution of training funds to meet workforce needs.
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Performance Metrics

Performance Metric 1.2.A. Identification, validation, assessment, and prioritization of skill 

competencies, required grades, and strategic alignment in accordance with the workforce 

requirements study results.

Table 19: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 58.2%

50% completed

(100% of 

organization 

completed) 

100%

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: FSA worked with a consultant to conduct a workforce requirements study of the 

process and drivers (input and output measures) that influence organizational staffing needs. Data were 

collected through questionnaires and follow-up interviews with managers and subject matter experts of 

various FSA processes.

Data Source: U.S. Department of Interior Business Center Payroll/Personnel Data, qualitative interview, 

and resource information from internal FSA sources.

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 1.2.B. Conduct targeted multi-year training based on identified workforce 

needs.

Table 20: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 62.0% 

Performance Result – – – – Baseline

Note: Data not available prior to FY 2021. This performance metric was revised in FY 2021.

Metric Definition: The metric measures the outcome of the targeted training initiatives launched in 

FY 2021.

Data Source: FedTalent system and FSA’s internal evaluation database.

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 1.2.C. Perform a training analysis at each performance review period 

within the fiscal period.

Table 21: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – –

85% average 

course 

satisfaction 

assessment 

rating (SAR) 

per year

96.0% average 

course 

satisfaction 

assessment 

rating (SAR) 

per year

Performance Result – – – – Met

Note: Data not available prior to FY 2021. 

Metric Definition: This metric measures average course SAR of attended trainings, to analyze the 

effectiveness of the training or developmental program conducted. 

Data Source: Course evaluations, facilitator observations, FSA’s internal evaluation database, and 

SurveyMonkey.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Goal 2: Provide World-Class Customer Experience to 

the Students, Parents, and Borrowers We 

Serve 

Goal Leader: Deputy Chief Operating Officer, Student Experience and Aid Delivery

Table 22: Goal Objectives

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

and Borrowers We Serve.

Strategic Objective No. Strategic Objective

Strategic Objective 2.1

Ensure that all students can easily access information on federal 

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

repayment options.

Strategic Objective 2.2

Provide seamless, easy, personalized digital interactions equal with 

top financial institutions in the delivery of financial aid products and 

services. 

Strategic Objective 2.3

Streamline contact center and back-office operations to improve our 

customers’ integrated experience.

Strategic Objective 2.4 Simplify the communication and processes associated with borrower 

repayment plans. 

Goal Spotlight

Digital and Customer Care (DCC) is a key initiative to drive performance towards achieving the 

strategic goal. Seven significant releases in FY 2021 expanded and improved the features and 

capabilities of StudentAid.gov. In addition to these planned releases, StudentAid.gov is often 

asked to respond quickly to changing or new priorities. FSA used a highly integrated, 

collaborative approach to lead and manage changes and new priorities with the vision of 

meeting customer and business needs. These efforts have led to a better user experience, 

continued strong ACSI scores, growth/increase in customer use of StudentAid.gov features 

(tools, forms/applications, content) and advancement of a single, digital “door” for customer 

engagement with FSA. Significant improvements to the Digital Platform included:

• Updated myStudentAid mobile app, which included create account, settings, dashboard, 

aid summary and notifications features along with key customer tasks/forms (FAFSA®

form, Master Promissory Note, Acknowledgment), 

• Redesigned loan entrance and exit counseling, 

• Expanded the Aidan virtual assistant’s availability to all StudentAid.gov and 

myStudentAid app users, 

• Updated TEACH products and release of new TEACH Grant Conversion Counseling 

based on new regulations, 

• Integrated the 2021–22 FAFSA form into StudentAid.gov, and

• Released the 2022–23 FAFSA form. 
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FSA onboarded several key communications within the Marketing Communications Platform 

(MCP). These communications enabled the organization to provide important information to its

customers, such as filling out their FAFSA forms and resources within StudentAid.gov. In 

September 2021, FSA kicked off a digital campaign to help FSA communicate with borrowers 

about the upcoming return to repayment. The organization is seeking to raise awareness about 

FSA resources and information for this effort to help plan and prepare for what is expected to be 

a challenging transition.
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Strategic Objective 2.1 

Ensure that all students can easily access information on federal student 

aid, apply for federal student aid, and have information on repayment 

options.

Overview

Prior to the DCC and Digital Platform efforts, customers had to navigate numerous FSA 

websites resulting in a disjointed and siloed experience. Leveraging a collaborative approach 

with a focus on human-centered design, the Digital Platform launched an integrated and 

improved StudentAid.gov website in December 2019, and an updated myStudentAid mobile 

app in December 2020. StudentAid.gov is FSA's primary customer-facing digital front door for 

students, parents, and borrowers who need be informed about, apply for, and manage their 

federal student aid. For this reason, StudentAid.gov plays a critical role in supporting the 

Department’s and FSA’s strategic goals and priorities. There were multiple technology releases 

in FY 2021 that expanded and improved the features and capabilities of StudentAid.gov. While 

delivering on planned releases and maintaining overall site operations, FSA also managed 

evolving administrative priorities which impacted information to be provided to customers while 

delivering on planned releases and maintaining overall site operations.

Getting students, parents, and counselors around the country focused on increasing 

completions of the FAFSA form for the 2021–22 academic year remains FSA’s top priority. 

Whether a student is attending a traditional four-year college or university, enrolling in a 

community college, or opting for a trade or vocational certification, the FAFSA form should be 

the first step forward for every high school senior in America. Since November 2020, FSA 

encouraged high-school seniors and their families to complete the 2021–22 FAFSA form. FSA 

worked with individual states, counselors, mentors, and college access professionals on 

initiatives to improve FAFSA completion rates. The organization posted social media posts 

related to the FAFSA form and published other digital content including helpful articles on 

StudentAid.gov. FSA engaged local media outlets to raise awareness about the importance of 

completing the FAFSA form. It is probable that the outreach efforts made by FSA and by 

colleges and universities to students in their freshman year were more successful due to 

COVID-19, as students were more of a captive audience than in previous years. 

FY 2021 Performance Summary and Analysis

There are four performance metrics for this strategic objective. Two metrics met their annual 

targets, while two metrics did not meet their targets in FY 2021.

The 2.1.B metric target was not met. Although the gap in high school FAFSA filing for the first 

12 months of the 2021–22 FAFSA filing was closed significantly (from 15.9% in November 2020 

to 4.4% in September 2021), the gap was not entirely closed. This decrease is likely caused by 

the COVID-19 national emergency and the resulting impact of many high school seniors not 

attending school in person during the academic school year 2020–21. This led to FSA not 

meeting the goal of having 66.25% of high school seniors file their FAFSA forms during 

FY 2021.
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The target for the 2.1.C metric was not met. Failure to meet this metric target may be 

attributable, in part, to the release of the modernized myStudentAid mobile App. The new and 

improved myStudentAid mobile app was released in early December 2020, just a few months 

after the 2021–22 FAFSA form became available for submission. During this time, customers 

were directed to complete their FAFSA forms via the web which may have contributed to fewer 

forms being submitted via a mobile platform. Conditions are expected to return to normal in 

FY 2022 and therefore provide a more precise measurement moving forward.

Key Successes and Opportunities

Prior to the DCC and Digital Platform, FSA customers had to visit multiple, disconnected 

websites requiring multiple logins to get the information they needed. Inconsistent branding, a 

disjointed user experience, and information siloes made it difficult and confusing for customers 

to find what they were looking for and to take action. To improve customer experience, FSA 

initiated a human-centered focus to understand customer needs through field research, cocreation, and usability testing to inform its Digital Platform launch and continuous improvement. 

This initiative achieved the goal of one holistic DCC Design System with shared components to 

create a consistent user experience across web and mobile applications. As a result, a primary 

customer website for FSA information and services (excludes servicing functions) was 

developed, six websites were consolidated, and over 2,000 pages were consolidated.

StudentAid.gov supports customers and lets them take action throughout the student aid 

lifecycle. Because StudentAid.gov is FSA’s primary customer website, it must frequently be 

adapted to meet changing or new priorities. FSA successfully managed these changes and 

delivered on overall site improvements. The releases in FY 2021 have expanded specific 

capabilities of the website. The following are several highlights offered to assist borrowers:

• Redesign of the Public Service Loan Forgiveness (PSLF) Help Tool, and the 

Acknowledgment based on customer feedback and user experience best practices

• Integration of the borrower defense application

• Addition of the “borrow more” simulation to Loan Simulator

To engage with FAFSA filers effectively, FSA sends out emails each year to FAFSA filers who 

filed an application the year before. This year, 41 million emails were sent out to filers to remind 

them to file a renewal FAFSA form. These strategies enhanced outreach to local media outlets 

and to key states about the importance of FAFSA filing which positively impacted increases in 

the FAFSA filing results in these areas. Social media outreach continued to be a promising 

method for raising awareness as well. For much of this cycle, FAFSA filing by returning filers 

exceeded rates of filing for this population when compared to the previous year. 
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Performance Metrics

Performance Metric 2.1.A. Number of visits (sessions) demonstrating adoption of the updated 

StudentAid.gov site.

Table 23: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 44.3 million 44.5 million 183.7 million 217 million 210 million 241 million

Performance Result Met Met Met Met Met

Metric Definition: StudentAid.gov is FSA's primary customer-facing digital front door for students, 

parents, and borrowers who need be informed about, apply for, and manage their federal student aid. By 

focusing on total customer visits, this performance metric helps gauge the success of FSA’s efforts to 

become the most trusted and reliable source for accurate student aid information for Americans 

nationwide and engage customers in completing critical tasks related to federal student aid. 

Data Source: FSA’s online platform analytics. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.1.B. Percentage of high school seniors submitting the FAFSA.

Table 24: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – 67.4% 65.9% 63.8% 66.25% 60.87% 

Performance Result – Met Not met Not met Not met

Metric Definition: A primary goal of FSA is to encourage FAFSA completion among high school seniors. 

Data Source: FSA’s online platform analytics. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 2.1.C. Number of customers submitting the FAFSA via a mobile 

platform—the myStudentAid mobile app or fafsa.gov.

Table 25: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 2.5 million 

submissions

2.6 million 

submissions

2.5 million 

submissions

Performance Result – – – Met Not Met

Note: Data not available prior to FY 2020. 

Metric Definition: This metric measures FAFSA submissions via a mobile device either through the 

FAFSA website or the mobile app to help determine customer interest and engagement in using mobile 

technology to complete online forms. 

Data Source: FSA’s online platform analytics. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.1.D. Persistence among first-time filing aid recipients.

Table 26: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 82.6% 82.5% 82.8% 81.0% 81.0% 81.1%

Performance Result Met Met Met Met Met

Note: Formerly 5.1.E in FSA FY 2020 Annual Report.

Metric Definition: This metric helps track performance across one of the desired outcomes of federal 

student aid and its impact on program completion. By following first-time filing aid recipients—such as 

college freshmen or non-traditional students, into their second year—it is possible to see whether FSA is 

making improvements in how applicants are translating the aid that they receive into educational 

persistence. 

Data Source: Enterprise Data Warehouse and Analytics (EDWA) and Central Processing System.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 2.2 

Provide seamless, easy, personalized digital interactions equal with top 

financial institutions in the delivery of financial aid products and services.

Overview

FSA has been working to continuously improve its digital interactions with customers since it 

initiated this strategic plan, and FY 2021 was a further step in that direction. For example, the 

myStudentAid mobile app was initially developed to support customers who wanted to complete 

the FAFSA form on their mobile device. With the updated Digital Platform, the mobile app scope 

was expanded to provide key account management functions (create account, settings, 

Dashboard, Aid Summary) and new forms/functions (Master Promissory Note, 

Acknowledgment, Aidan) while aligning to the FSA brand and making user experience 

improvements. FSA is evaluating the mobile app’s role in the Digital Platform strategy based on 

data analytics, user research, best practices, and FSA priorities.

Aidan, the StudentAid.gov virtual assistant, was added to the myStudentAid mobile app in May 

2021. Customers can engage with Aidan within the mobile app in a similar fashion to 

StudentAid.gov, including retrieving account information, getting answers to questions about 

FSA programs, etc. In addition, access to Aidan was expanded in May 2021 to all users on 

StudentAid.gov. This improvement provided anyone on the website to access and use Aidan.

As discussed earlier in this report, FSA onboarded several key communications within the MCP

as part of the DCC initiative. These communications enabled FSA to provide important 

information to its customers, such as filling out their FAFSA forms and resources within 

StudentAid.gov. In FY 2021, FSA communicated with its customers via over 200 million 

transactional, recurring, and non-recurring emails. As a result, FSA believes its customers are 

more informed and engaged with the organization. 

FSA conducted monthly customer listening sessions to gather, analyze and report on customer 

behavior, issues, and feedback, where the organization heard directly from borrowers in real 

time to inform its work. The sessions covered web analytics, complaints, social media, and

customer experience surveys. Attendees from across the organization participated in monthly 

customer listening meetings, which helps to build understanding and facilitate improvements in 

response to findings. As a result of this effort, dozens of improvement tickets were created, and 

business process improvements were made in response to customer listening findings. FSA 

procured a customer feedback management tool during FY 2021, that will enable the Student 

Experience and Aid Delivery team to provide new “always on” and post-interaction surveys to 

customers over all communications channels. The artificial intelligence-driven text analytics 

component will also allow FSA to better analyze customer feedback and information to improve 

processes in expedited timeframes.

FY 2021 Performance Summary and Analysis

There are seven performance metrics for this strategic objective. Five metrics met their annual 

targets, and two metrics did not meet their annual targets in FY 2021.
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The target for the metric 2.2.F was not met. FY 2021 FSA’s weighted ACSI Life Cycle Survey 

Score for performance metric 2.2.F (formerly 2.2.G in 2020) of 71.4 fell short of the goal range 

of 73 through 75 by 1.6 points. This deficit is likely because of a slight change to the borrowers 

surveyed as part of the Multiple Servicer Survey associated with loan servicers. The Multiple 

Servicer Survey accounts for a major part of FSA’s weighted ACSI, so if that score drops, it 

impacts FSA’s ACSI. The FAFSA survey and In-School survey (drawn from federal student aid 

recipients) are also calculated within the ACSI score. The FAFSA survey was nearly as high as 

the FY 2020 score, and the In-School survey had an improved score, but these surveys account 

for less of the total weighted ACSI score.

The metric 2.2.G target was not met. The development of the customer satisfaction surveys for 

StudentAid.gov was completed and received OMB approval; however, the surveys won’t be 

implemented until November 2021 as part of the DCC 5.3 website release. The schedule for 

implementing the customer satisfaction surveys was adjusted to a later date to minimize risk to

a successful FAFSA release in September 2021. The new surveys are expected to launch in 

November 2021, and FY 2022 will serve as a baseline year for customer satisfaction surveys on 

StudentAid.gov. Numerical targets will be incorporated in FY 2023.

Key Successes and Opportunities

In December 2020, the Dashboard and Aid Summary features were added to the myStudentAid 

mobile app. Customers who log in to the mobile app are presented with their personalized 

Dashboard, where they can view their current aid, loan balances, as well as additional details 

about their loans in their Aid Summary. The addition of Dashboard and Aid Summary to the 

myStudentAid mobile app aligned to the overall goal to provide customers with the ability to 

access federal student aid information, and to complete key tasks on the device of their 

choosing.

StudentAid.gov is FSA's primary customer-facing digital front door for students, parents, and 

borrowers who need to be informed about, apply for, and manage their federal student aid. FSA 

has continued to see steady growth in customers viewing their aid information on 

StudentAid.gov. As the administrative forbearance period ends, FSA anticipates an increase in 

customers logging in to view their aid information, and borrower exploration of repayment 

options.

Aidan, the StudentAid.gov virtual assistant, was added to the myStudentAid mobile app and

expanded to all users on StudentAid.gov in May 2021. Previously, the tool was only available 

to logged in users. These improvements provided anyone on the app or website with access to 

and use of Aidan. With the growth in users generating additional data, the strategy to continue 

analyzing customer data to drive improvements with content directly based on customer needs

has strengthened. 

The Acknowledgment provides customers who are planning to accept a federal student loan 

with important information on borrowing, and their responsibility to repay the loan. The 

borrowers’ experience is customized based on whether they are a new borrower or have current 

loans. In May 2021, FSA redesigned the Acknowledgment to improve the customer experience 

based on user feedback and best practices. A new landing page provides customers with three 

options for a more personalized experience: (1) undergraduate student, (2) graduate student, 

and (3) parent of an undergraduate student. It was redesigned to present information in smaller, 
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easy-to-understand learning modules. Additionally, the Acknowledgment was made available on 

the myStudentAid mobile app.

The MCP, as previously discussed, sent over 200 million emails in FY 2021 to students, 

parents, and borrowers. Delivery rates and brand recognition/authority continue to be key pillars 

that FSA looks out for as it continues to scale and deliver more emails via the tool. FSA is

ensuring that data integrations and loading processes, as well as the internet protocol (IP) 

addresses for sending emails, are performing at optimal levels. As part of the DCC initiative, 

FSA onboarded several key communications within the MCP. These communications are critical 

for users as they contain information related to important actions the users need to take on FSA 

products. Communications included the StudentAid.gov site, FAFSA, and the PSLF Help Tool. 

In the last six months, FSA has onboarded FSA ID, PSLF Phase 2 emails for the PSLF Help 

Tool, Entrance and Exit Counseling, and updated TEACH grant communications. FSA has also 

developed recurring campaign emails as part of its proactive communications to its customers, 

including students, parents, and borrowers. 

These communications enabled FSA to provide important information to its customers, such as 

filling out their FAFSA forms and resources within StudentAid.gov. These campaigns included 

FAFSA renewal campaigns (Winter and Fall), as well as upcoming communications that are 

automated based on certain behavioral criteria determined by FSA and resources. The biggest 

challenges were the number of email campaigns FSA was sending during the fiscal year along 

with increasing capacity on the platform. Thus, FSA increased the number of servers available 

for the platform which in turn increased the number of emails it can send out. 

FSA conducted several improvements to include revamping email templates, improving data 

integrations between MCP and systems, as well as testing and optimization efforts to 

continuously improve its email communications for its borrowers. The testing and optimization 

efforts, and revamped template designs, have led to notable improvements to FSA’s 

engagement such as higher open and click rates. The revamped templates allowed the emails 

to match the brand and styling of StudentAid.gov and FSA, which enabled more trust and 

consistency as a trusted source of information. FSA’s priority is to continue onboarded 

communications within the MCP for transactional and recurring campaigns, update data 

integrations within the MCP to ensure faster data loading and execution, and additional data 

analysis to evaluate and improve communications based on past performance and industry 

benchmarks.

FSA recognized that more external communication is preferable so that its customers are up to 

date with clear and actionable next steps. Several processes are in place to ensure that the 

organization is sending all emails in an efficient manner:

• Monitoring of the data files, via internal alerts, within the system to make sure FSA is 

receiving the correct files for its transactional and campaign data loads. 

• A team set up to monitor the IPs to make sure that FSA is aware of them being 

blacklisted to ensure that the organization solves it as soon as possible.

• Ramp-up plans for high volume campaigns in order to warm the IPs up for delivery and 

reduce volume load on the servers. 
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Proactive monitoring of high priority campaigns, as well as the development of a health 

dashboard for the transactional campaigns are some ways of reducing risk from a delivery 

perspective. Continuing to develop and improve emails based on industry best standards and 

design best practices ensure that the organization is reducing the risk on its brand integrity for 

its communications.

The implementation of a customer feedback management software platform, and the 

development of OMB Circular A-11 compliant surveys, are the key organizational initiatives that 

will support this strategic objective. The target for this fiscal year was to complete survey 

development and implementation. The platform includes artificial intelligence-driven text 

analytics that will allow FSA to more easily mine feedback for trends and escalate any feedback 

that warrants action. The procurement of a customer feedback management software platform 

will greatly expand the capacity to both offer surveys across channels, and better analyze 

results in FY 2022. By putting in this work up-front and dedicating resources to improve it over 

time, FSA will be automating the analysis of unstructured feedback to get deeper, more relevant 

insight on customer sentiment, desires, and pain points from their open-ended survey feedback. 
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Performance Metrics

Performance Metric 2.2.A. Number of customers checking loan balances via the myStudentAid 

mobile app.

Table 27: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 133,417 1.5 million 1.6 million

Performance Result – – – Met Met

Note: Data not available prior to FY 2020. 

Metric Definition: This metric gauges customer engagement in using the myStudentAid app to view their 

current aid information. With the improved myStudentAid app, customers can view their loan 

information within the mobile app. 

Data Source: FSA’s online platform analytics. 

FY 2021 Period of Performance: October 2020 through September 2021. 

Performance Metric 2.2.B. Number of borrowers who view their aid summary information on 

StudentAid.gov.

Table 28: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 7.6 million 8.36 million 13.10 million

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020. 

Metric Definition: This metric gauges customer engagement in using StudentAid.gov to view their 

current aid information. In February 2020, the Aid Summary feature was delivered on StudentAid.gov

providing customers with access to summary and detailed aid information such as loan balances or Pell 

Grant dollars received. 

Data Source: FSA’s online platform analytics.

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 2.2.C. Number of users of “Aidan”, the StudentAid.gov virtual assistant.

Table 29: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 545,763 750,000 1,566,488 

Performance 

Result – – – Met Met

Note: Data not available prior to FY 2020. 

Metric Definition: To provide increased self-service options for students, families, and borrowers, this 

metric helps tracks Aidan’s usage. Aidan is a virtual assistant that uses advanced technology—artificial 

intelligence and natural language processing—to answer the most common questions on federal student 

aid. Whether customers want to find out about their current loan account balances, learn more about 

grants, make a payment (pilot), or get help contacting their loan servicer, Aidan is available to help them 

find an answer. 

Data Source: FSA’s online platform analytics. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.2.D. Transactional email volume for outreach and communications to 

customers.

Table 30: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 92.2 million 92.8 million 189.7 million

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020. This performance metric was revised in FY 2021. 

Metric Definition: This metric measures the transactional emails that are delivered through the internal 

communications tool. These emails are vital for students, parents, and borrowers to understand updates 

and notifications regarding their FAFSA application and other important information that needs to be 

acted on. This metric helps to gauge the health of the email communications and platform in terms of 

volume and reach. 

Data Source: Digital Communications Tool & Marketing Communications Platform.

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 2.2.E. Recurring campaign email delivery volume for outreach and 

communications to customers.

Table 31: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 32.2 million 33.8 million 41.7 million

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020. This performance metric was revised in FY 2021. 

Metric Definition: This metric measures the recurring emails that are delivered through the internal 

communications tool. Recurring campaigns are defined as communications that FSA sends on a 

consistent cadence that are not tied to immediate transactional interactions and have a yearly 

precedence, such as the Renewal campaign reminders. This metric helps to gauge the commitment to 

consistent and proactive communications. 

Data Source: Digital Communications Tool & Marketing Communications Platform. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.2.F. American Customer Satisfaction Index (ACSI) Aid Lifecycle Survey 

score.

Table 32: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 69.9 70.6 70.0 73.5 73–75 71.4

Performance Result Met Met Met Met Not Met

Metric Definition: This metric provides a measure of the customer experience across the student aid 

lifecycle, by accessing customer satisfaction scores from FAFSA filers, from persons enrolled in or 

attending a post-secondary educational institution, and from borrowers repaying their loans. 

Data Source: Multiple Servicer Survey, FAFSA.gov (housed on StudentAid.gov), and (federal student 

aid recipients) In-School customer satisfaction survey. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 2.2.G. Customer Satisfaction Survey(s) for StudentAid.gov site and 

associated tools.

Table 33: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – No survey 

developed

Survey 

Development 

and

Implementation

Developed 

Survey 

Performance Result – – – Not Met Not Met

Note: Data not available prior to fiscal year (FY) 2020. 

Metric Definition: This metric intends to measure customer satisfaction with the StudentAid.gov

website, including the applications, tools, and processes available on the site. The measurement of 

customer satisfaction would encompass activities such as completing entrance and exit counseling, or the 

usage of the repayment calculator that assist customers in selecting a repayment plan that best fits their 

needs. Customer satisfaction surveys will assist FSA in developing additional tools and offering website 

improvements based on their feedback. 

Data Source: N/A. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 2.3 

Streamline contact center and back-office operations to improve our 

customers’ integrated experience.

Overview

FSA is focused on supporting students, families, and borrowers as they navigate the financial 

aid process. Optimizing the customer service model throughout the student aid lifecycle is 

critical to this effort and adopting more service-oriented and streamlined approaches at the 

contact and loan servicing centers help improve the customer’s experience. Exceptional 

customer service will increase FSA’s ability to adapt to changing customer needs and ensure 

that customers easily understand the available options to make informed choices. The first step 

towards positive outcomes in this area is for loan servicers to provide prompt responses to 

incoming calls and expedited resolutions of questions. In FY 2021, FSA focused on mitigating 

risks for servicer operations, as it prepares to return millions of borrowers to repayment. This 

planning has led to the development of call center tools, technologies, and training to support 

the efficient management of future call volume. As programmatic and policy decisions are made

and impact on this objective becomes clear, FSA will direct operational measures to 

continuously improve call center performance.

FY 2021 Performance Summary and Analysis

There are two performance metrics for this strategic objective. Both metrics met their annual 

targets in FY 2021.

Key Successes and Opportunities

There are several initiatives supporting these performance metrics including formalizing 

operational oversight, active monitoring of projected call volumes, and daily metric reporting 

from servicers. Since March 2020, inbound call volumes have been significantly lower due to 

the ongoing COVID-19 administrative forbearance. Call volume is expected to increase as FSA 

gets closer to returning to normal operations. During the payment pause, the organization

analyzed existing servicer capabilities and identified areas for improvement. Some loan 

servicers improved capability, adding features such as interactive voice response call back and 

chat bots to handle inbound contacts. In FY 2022, FSA will monitor whether servicer system 

improvements positively impact its ability to handle the expected increase in incoming calls in 

the months after the administrative forbearance ends.
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Performance Metrics

Performance Metric 2.3.A. Quality Standard for Average Speed to Answer (ASA) at all Call 

Centers.

Table 34: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 59.0

Equal to or 

less than 60 

seconds 

24.0

seconds

Performance Result – – – Met Met

Note: Data not available prior to fiscal year (FY) 2020. 

Metric Definition: The goal of this metric is to ensure FSA’s loan servicing vendors (Not-For-Profits 

(NFPs) and Title IV Additional Servicers (TIVAS)) are providing the best customer service to FSA’s 

borrowers. One way that this is measured is through the Average Speed to Answer rate. This is the 

average number of seconds it takes a borrower to speak with a customer service representative from the 

moment a borrower calls to the time a customer service representative answers the call. A higher ASA 

indicates a longer wait time and may result in a higher call abandon rate or increased call frustration. 

Data Source: Federal servicers’ quarterly reports. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.3.B. Quality Standard for Abandon Rate (AR) for Incoming Calls at all 

Call Centers.

Table 35: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 3.6% Equal to or 

less than 2% 0.9%

Performance Result – – – Not Met Met

Note: Data not available prior to fiscal year (FY) 2020.

Metric Definition: The goal of this metric is to ensure the loan servicing vendors (NFPs and TIVAS) are 

providing the best customer service to borrowers. One way that this is measured is through the AR. This 

is the average number of calls in which a borrower hangs up (abandons) the call before they speak with a 

customer service representative. The higher the rate the more borrowers are abandoning a call and likely 

not getting the information/answers they need. 

Data Source: The Federal servicers’ quarterly reports.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 2.4 

Simplify the communication and processes associated with borrower 

repayment plans.

Overview

The DCC initiative is the foundational plan for simplifying communication and processes 

associated with borrower repayment plans and supports the performance metrics utilized for this 

strategic objective. In November 2020, FSA released a re-platformed PSLF Help Tool and 

introduced a new combined form. Additionally, Temporary Expanded Public Service Loan 

Forgiveness (TEPSLF) was added to the PSLF Help Tool. FSA also made adjustments within 

the PSLF Help Tool design and content to improve the borrower engagement with the Employer 

Eligibility Database. One of several priorities for improvement to the PSLF Help Tool is the 

addition of digital signature and submission capabilities. With the addition of the digital signature 

and submission capabilities, borrowers will have an improved experience that does not require 

them to print the form, manually sign, have their employer sign, and then submit the form to the 

servicer. With this improved experience, FSA expects the number of completed forms to 

increase and the risk of borrower complaints on the customer experience to be minimized.

FY 2021 Performance Summary and Analysis

There are three performance metrics for this strategic objective. One metric did not have a 

target due to the administrative forbearance period and a second metric did not have data at the 

time of publication. The third metric under this objective completed a baseline assessment in 

FY 2021. The baseline assessment will be used to set targets for future years.

The 2.4.B metric which captures the percentage of borrowers using the auto-debit feature for 

loan repayment could not be measured due to the CARES Act, which enabled the Department 

to automatically suspend payments on eligible student loans since March 13, 2020. This 

payment suspension, also known as the administrative forbearance, will end Jan. 31, 2022.

FSA, as well as its Loan Servicers, will continue to promote auto-debit and other benefits (i.e., 

Income Driven Repayment) through its various methods of borrower communications as 

customers move out of the CARES Act forbearance status and back into repayment.

Key Successes and Opportunities

While the Make a Payment metric has been impacted by the administrative forbearance, FSA 

has seen a growth in payments over FY 2021. However, due to the unpredictability of the 

borrowers in repayment impacted by the administrative forbearance, no formal target for 

FY 2021 was set. 

The administrative forbearance period has changed borrower behavior and may impact them in 

using auto-debit to make payments in the future. To respond to this potential behavioral change

and to confirm that existing auto debit customers want to continue with automatic payments, 

FSA and its loan servicers have launched a coordinated engagement plan to encourage 

borrowers to sign-up or retain auto-debit arrangements.
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In November 2020, FSA released a re-platformed PSLF Help Tool and introduced a new 

combined form. Additionally, TEPSLF was added to the PSLF Help Tool. Borrowers engaged 

with the Employer Eligibility Database led to a high number of case creations for adjudication in 

the Customer Relationship Management. As a result of this, FSA made adjustments within the 

PSLF Help Tool design and content to improve the borrower engagement with the database. 
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Performance Metrics

Performance Metric 2.4.A. Number of borrowers using Make a Payment feature to pay student 

loans.

Table 36: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 12,245 

payments N/A 22,366 

payments

Performance Result – – – Met N/A

Note: Data not available prior to FY 2020. 

Metric Definition: This metric gauges customer interest and engagement in using StudentAid.gov to 

make a student loan payment. In February 2020, the Make a Payment pilot was delivered on

StudentAid.gov providing customers with loans serviced by Great Lakes or Nelnet (both FSA loan 

servicers) with the ability to make a standard loan payment on StudentAid.gov. 

Data Source: DCC Web Logs. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 2.4.B. Percentage of borrowers using auto-debit.

Table 37: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 24.8% N/A N/A

Performance Result – – – Baseline N/A

Note: Data not available prior to FY 2020.

Metric Definition: This metric measures the volume of borrowers that are enrolled in auto-debit. Autodebit allows borrowers to pay their student loan payments without any effort since the payment is 

extracted from the borrower's financial institution each time a payment is due, allowing borrowers to make 

payments in full and on time with minimal effort required. Borrowers who enroll in auto-debit are given a 

0.25% reduction on their interest rate.

Data Source: National Student Loan Data System (NSLDS®) database. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 2.4.C. Percentage of users who start and complete the Public Service 

Loan Forgiveness (PSLF) Help Tool by generating a PSLF form.

Table 38: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 34.5%

Performance Result – – – – Baseline

Note: Data not available prior to FY 2021. This performance metric was revised in FY 2021.

Metric Definition: The metric tracks borrowers who begin the process of the PSLF Help Tool and start a 

PSLF form and compares it to those who complete the process by generating a PDF of the PSLF form.

Data Source: Common Origination and Disbursement (COD) Portal.

FY 2021 Period of Performance: November 2020 through September 2021.
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Strategic Goal 3: Increase Partner Engagement and Oversight 

Effectiveness

Goal Leader: Deputy Chief Operating Officer, Partner Participation and Oversight

Table 39: Goal Objectives

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness.

Strategic Objective No. Strategic Objective

Strategic Objective 3.1 Provide effective oversight of FSA’s partners utilizing a

comprehensive suite of monitoring tools.

Strategic Objective 3.2 Strengthen partner engagement and provide effective outreach and 

assistance.

Goal Spotlight

Strategic Goal 3 is focused on how FSA will assist schools, third-party servicers, and financial 

institutions to deliver federal student aid, collect borrower payments seamlessly, and safeguard 

data integrity through oversight and monitoring. FSA will also ensure these institutions 

understand and comply with Title IV requirements and other relevant laws, policies, and 

procedures. 

FSA has gauged its performance in these areas using five metrics. The Office of Partner 

Participation and Oversight (PPO) uses a comprehensive suite of monitoring tools to ensure 

schools appropriately administer Title IV student financial aid by conducting comprehensive 

compliance reviews for certification actions, deficient audit resolutions, flagged financial

statements, program reviews, method of payment actions, and technical assistance. 

Additionally, FSA is committed to continued enhancements in oversight and improving the

borrower experience by reducing institutional fraud. An outcome of this effort is demonstrated by

the tactical approach for application processing FSA has taken in borrower defense, which has 

afforded the organization significant progress in resolving the outstanding applications.

Strategic Goal 3 also highlights FSA’s responsibility for providing high quality training products 

and technical assistance services to IHEs, third-party servicers, auditors and participating 

school business officers through a comprehensive online training system, the FSA Training 

Center (fsatraining.ed.gov). FSA also supports training, outreach, and executive engagement 

through national, regional, and state level conferences along with focused support for minorityserving institutions (MSIs) and under-resourced institutions.

The Internal/ External Communications Group transitioned (and then retired) FSA’s legacy 

Information for Financial Aid Professionals content management system and website. The 

system was a knowledge repository of current and historical Title IV financial aid guidance 

publications for partners. The new platform became accessible to the public as the Partner 

Connect Knowledge Center in March 2021 and improved upon the initial product through three 

subsequent releases during FY 2021. 
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FSA has been responsive in relief efforts for schools through its communications, such as postdisaster emails which offered key reminders and information on the special resources available 

to schools and individuals that were impacted by natural disasters. 
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Strategic Objective 3.1 

Provide effective oversight of FSA’s partners utilizing a comprehensive 

suite of monitoring tools.

Overview

PPO performs oversight using a holistic suite of monitoring tools, including comprehensive 

compliance reviews to ensure a case management approach. FSA is also proactively working to 

prevent and address institutional fraud through oversight, compliance, and enforcement actions. 

PPO continues to mature existing performance reporting dashboards and develop new data 

dashboards to empower employees, managers, and senior leaders to make data-driven 

decisions. During the COVID-19 national emergency, PPO had to adapt the compliance review 

process to be conducted virtually. These adapted processes and innovations will be assessed 

for future incorporation and to improve efficiency.

Borrower defense is a type of loan discharge based on a determination that the borrower’s 

school engaged in certain acts or omissions, generally misrepresentations, fraud, or breach of 

contract that unlawfully caused the borrower to enroll or continue enrollment at the school. FSA 

is committed to protecting students and borrowers by forgiving a portion or the entirety of their 

student loan obligations after conducing legal research and analysis of borrower defense

claims. FSA is managing the borrower defense application process and successfully rebuilt and 

substantially improved collaboration with external partners to support the borrower defense fact

finding process. Process and technology enhancements have also led to improved information 

sharing with borrower defense applicants, and FSA continues to look for improvements to the 

borrower defense process. 

FY 2021 Performance Summary and Analysis

There are two performance metrics for this strategic objective. Metrics 3.1.A and 3.1.B met and 

exceeded annual metric targets.

Key Successes and Opportunities

As of Sept. 1, 2021, the School Eligibility and Oversight Service Group completed 3,692 

comprehensive compliance reviews for 5,894 Title IV participating partners (62.6%); exceeding 

the goal of 60%. Although the target was met this fiscal year, recertification is a primary driver 

within the compliance review framework, and there is a possibility that the cadence of future 

recertifications will not align with future annual target goals. Current process improvements and 

tools executed in FY 2021 will be thoroughly analyzed to support maintaining or surpassing 

targets in this area. 

The targets associated with borrower defense were met due to improved collaboration with 

external partners to support the fact finding process and the transition of internal staff from 

contract attorneys to term attorneys. The Borrower Defense Group’s (BDG) workflow is heavily 

influenced by external factors including pending litigation, a shifting regulatory framework, 

policy, and regulations. However, the staff continues to adapt to and overcome these factors. 

During FY 2020, BDG adjudicated 160,000 applications, exceeding its goal of 150,000 
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applications. During FY 2021, BDG’s goal was to adjudicate 65,000 applications. There are 

several reasons to justify the goal adjustment. First, the cases remaining in BDG’s queue are 

among the most complicated and include the most evidence that needs to be considered, 

whereas the cases that BDG prioritized during FY 2020 often included a much smaller body of 

evidence or were covered by previously established protocols. Second, FSA leadership 

provided work distribution flexibility to BDG, allowing team members to fully engage in a robust 

fact finding process, which is necessary to adjudicate the remaining complex applications.

Staff levels in FY 2021 allowed BDG to finalize fact finding memoranda and legal analysis while 

simultaneously adjudicating cases in a timely manner. As a result, FSA adjudicated over 65,500 

cases since October 1, 2020 — exceeding the goal of 65,000. 
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Performance Metrics

Performance Metric 3.1.A. FSA will annually conduct an Institutional Review for its 

participating partners including schools, third-party servicers, and financial institutions.

Table 40: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 

51% of 

partners 

reviewed

60% 62.6%

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: This metric measures the performance of holistic comprehensive compliance reviews 

of institutions relating to certification actions, deficient audit resolutions, flagged financial statements, 

program reviews, method of payment actions, and technical assistance.

Data Source: Postsecondary Education Participants System.

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 3.1.B. Number of Borrower Defense (BD) applications adjudicated 

(subject to existing BD regulations).

Table 41: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 160,000 65,000 65,500

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: Borrower defense is a type of federal student loan forgiveness where borrowers may 

be eligible for forgiveness of their federal student loans if the relevant school attended misled the 

borrower or engaged in other misconduct in violation of certain laws.

Data Source: Customer Engagement Management System.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 3.2 

Strengthen partner engagement and provide effective outreach and 

assistance.

Overview

FSA has experienced an increased demand for training and support resources due to significant 

financial aid regulatory and policy changes. FSA provides training and technical assistance 

through virtual and in-person engagements via the FSA Training Center (fsatraining.ed.gov), 

the annual FSA Training Conference (FSATC), and state and regional professional association 

conferences. Additional training/outreach resources are focused on Minority-Serving and UnderResourced schools and IHE Presidential leadership events. Technical assistance is also 

provided through the Ask-a-Fed service, Partner Connect/Common Origination and 

Disbursement (COD) customer service representatives, and the Partner Technical Assistance 

group. The pivot to an all-virtual environment due to the COVID national emergency provided an 

opportunity to increase stakeholder communication and awareness of service changes and 

increase in virtual offerings. 

The expansion of FSA’s virtual content delivery allowed a larger group of schools with 

constrained travel budgets or staffing to attend the FSATC, state and regional conferences, and 

the statutorily mandated Fundamentals of Title IV Training. The attendance at FSA events 

increased significantly in the virtual environment, particularly with the FSATC hosting more than 

15,000 participants in its first virtual session and providing support and resolving more than 

2,900 individual technical assistance inquiries.

FSA conducted its annual “Ease of Doing Business” survey with its Title IV eligible school 

partners, which is also tracked under this objective. The FY 2021 Ease of Doing Business Score 

is an overall measure of post-secondary educational institution financial aid administrators’ 

assessment of their recent experience interacting with FSA (and its contractors) including 

telephone/email/chat/fax communication regarding FSA’s systems and products, and 

interactions with FSA’s policy group, training, compliance, and operations staff. The survey is 

conducted by CFI Group, an independent third-party survey company, and results are provided 

to the Department and FSA. 

FY 2021 Performance Summary and Analysis

There are three performance metrics for this strategic objective. Metrics 3.2.B and 3.2.C met

their annual metric targets. A revised metric 3.2.A completed a baseline assessment in 

FY 2021, which will be used to set targets for future years.

Key Successes and Opportunities

In FY 2021, 88% of all Title IV eligible institutions participated in training programs or technical 

assistance. The increase in participation has a direct correlation with the methodology used to 

provide information, as all training and technical assistance was delivered in a virtual format. 

There was an 18% increase in the training modules available in FY 2021 compared to FY 2020. 

The virtual environment removed cost, time, and staffing barriers to institutional participation in 

training, as well as strengthened FSA’s outreach efforts, resulting in increased participation. The
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flexibility that the virtual engagement provided FSA is illustrated in the following 

accomplishments:

• The Partner Engagement & Relationship Management Group (PERM) provided 

leadership and coordination for FSA/Department’s participation in the FY 2021 

Historically Black College or University (HBCU) Annual Conference. There were 3,349

participants virtually attending the conference and more than 340 

Presidents/Chancellors and senior level institutional administrators who participated in 

the FSA/Department session and live Q&A forum. 

• The Minority-Servicing & Under-Resourced Schools Division (MSURSD) and PERM 

began virtual “Birds of a Feather” discussions with stakeholders from HBCU’s and other 

MSIs.

• The FSA Training Center (fsatraining.ed.gov) saw an additional 1,023 unique schools

access on-demand training from 320 available training products. Among the 117 new 

training products developed for FY 2021 were modules, lessons, and videos for 

Precertification, FSA Basics, New Federal Aid Administrator staff, and Foreign Schools. 

An additional 166 products were updated and 75 were removed to reflect current policy 

guidance. 

• FSA Training Officers developed and delivered virtual conference sessions to 

approximately 10,000 state and regional conference participants. 

• Training and Information Services Group (TISG) collaborated with FSA’s Policy 

Implementation Office to deliver the first National Live “Federal Update” session in the 

fourth quarter of FY 2021 to 1,174 participants.

• FSATC attendance increased 200% in the virtual environment, and on-demand views of 

the FSATC sessions reached more than 94,000.

It will be necessary to continuously update existing training content as a result of policy changes

and legislative initiatives, which will also require additional staff or contractual support for TISG 

staff. The deployment of an all-virtual strategy in FY 2021 was successful despite a shortage in 

staff resources. In FY 2022, additional assistance may be needed to support similar outcomes. 

The enhancements to training and launch of Partner Connect Knowledge Center have positively 

impacted the Ease of Doing Business score, which showed a 4 point improvement from 

FY 2020. The greatest improvement was with the “ease of searching Knowledge Center” Score, 

which increased 12 points compared to FY 2020. Other key strengths identified by school 

partners (high scoring items) include:

• Assistance received from FSA

• Knowledge acquired from last training session presented by an FSA trainer

• Quality of assistance from FSA

• Compliance issue resolved fairly 

FSA is committed to making improvements to its systems and communication with its partners 

and is currently developing new solutions for the NSLDS database and Postsecondary 

Education Participation System (PEPS). 
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Performance Metrics 

Performance Metric 3.2.A. FSA will measure institutional participation rates in Title IV training 

and specialized technical assistance programs.

Table 42: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – – Baseline 88%

Performance Result – – – – Baseline

Note: Data not available prior to FY 2021. This performance metric was revised in FY 2021.

Metric Definition: Training and technical assistance for this metric is provided and tracked at the 

individual learner level and tied to their school’s Office of Postsecondary Education Identification 

number (OPEID). As a target, professionals (individual learners) from participating schools will 

receive outreach and assistance, through such means as congressionally mandated training, 

the annual FSA Training Conference, state and regional professional association conferences 

and a large portfolio of web-delivered self-service courses, webinars, Ask-a-Fed queries for 

individualized technical assistance, and systems-oriented job aids. For the performance period 

all training and outreach activities were conducted virtually using Webinar technology as well as 

via the FSA Training Center.

Data Source: FSA Learning Management System (LMS), PEPS, eZ-Audit, PCnet, FSA Data Center, and 

NSLDS database.

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 3.2.B. FSA will enhance the self-service training resource and 

informational platform to improve communication with participating partners, including schools, 

third-party servicers, and financial institutions.

Table 43: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 62% 10% 18%

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020.

Metric Definition: This metric represents enhancements to the FSA LMS—specifically, additional 

courses created in FY 2021. It is not only a percentage of self-service courses available— for example in 

FY 2020 FSA had 271 modules of training content available. In FY 2021 there are 320 modules which is 

18% more than FY 2020. The courses focus on the proper administration of Title IV programs with 

offerings that address the learning needs of new financial aid office staff through senior institutional 

leadership. 

Data Source: FSA LMS.

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 3.2.C. Ease of doing business with FSA.

Table 44: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 73.4% 74.5% 74.0% 71% 75–77% 75%

Performance Result Met Met Met Not Met Met

Metric Definition: FSA conducts an annual “Ease of Doing Business” survey with its Title IV eligible 

school partners. The survey is conducted by CFI Group, an independent third-party survey company, and 

results are provided to the Department and FSA. The FY 2021 Ease of Doing Business Score is an 

overall measure of post-secondary educational institution financial aid administrators’ assessment of their 

recent experience interacting with FSA (and its contractors) including telephone/email/chat/fax 

communication regarding FSA’s systems and products, policy group, training, and compliance staff.

Data Source: FY 2021 Schools Partners Survey.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Goal 4: Strengthen Data Protection and Cybersecurity 

Safeguards 

Goal Leader: Chief Information Officer, Enterprise Technology Directorate

Table 45: Goal Objectives

Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards.

Strategic Objective No. Strategic Objective

Strategic Objective 4.1

Implement business partner and vendor systems that house, 

manage, and provide systems supporting FSA business processes, 

outreach and awareness focused on oversight, enforcement, 

infrastructure, systems, and data.

Strategic Objective 4.2

Improve student privacy data and cybersecurity controls of 

Institutions of Higher Education (IHEs) through outreach and 

communication, to mitigate future cyber-incidents and breaches.

Strategic Objective 4.3

Build an effective cybersecurity culture through employee 

awareness, training and accountability focused on protecting 

systems and data.

Goal Spotlight

Data protection and cyber security are two of the most important responsibilities FSA has today. 

Prioritizing the integrity and confidentiality of student and borrower data is a necessary step in 

the execution of Goal 4 within the FSA strategic plan. FSA has built a framework of 

cybersecurity with a focus on three core groups associated with the organization: business 

partner and vendor systems; IHEs; and FSA employees and contractors. For each of these 

groups, the Enterprise Technology Directorate within FSA must uphold and enforce rigorous 

cybersecurity standards in accordance with federal requirements to enable the organization to 

successfully pursue its mission. As FSA increases its digital engagement with customers at key 

points within the federal student aid lifecycle, it is critical for FSA to integrate state-of-the-art 

cybersecurity protection into all aspects of loan program. 

In FY 2021, these efforts have been realized through initiatives such as the IHE Cybersecurity 

Task Force. The Task Force delivered an implementation strategy to stand up a Command 

Center for compliance with federal information security regulations, the NIST 800-171 

Controlled Unclassified Information (CUI) requirement, to increase collaboration and information 

sharing and increase cybersecurity oversight with schools. 

Throughout the fiscal year, FSA engaged with more than 1,124 schools to inform, collaborate, 

and improve the security for the protection of Title IV data, to ensure these institutions took the 

necessary actions needed to protect this shared information. This engagement has led to 

improvements in outcomes, reduction of risk, and impacted cybersecurity and student data 

privacy. This highlights FSA’s focus on improving the protection of Title IV data through 

increased collaboration with all Title IV participating institutions and third-party servicers. 

FSA believes the greatest factor in its success for creating streamlined access to aid through 

coordination with agencies such as Internal Revenue Service (IRS), is a renewed commitment 

internally to cyber security and data protection. FSA established a federal tax information (FTI)
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Safeguards Team which delivered the first assessment of FSA’s compliance and ability to 

deliver and operate secure systems managing IRS data (IRS Publication 1075). This is the first 

step in receiving tax information for FSA. The cybersecurity culture that has been created at 

FSA spans the organization and supports the continued efforts to mitigate risk while making

technologically secure decisions in the areas of data sharing, data management, and 

cybersecurity. 
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Strategic Objective 4.1 

Implement business partner and vendor systems that house, manage, and 

provide systems supporting FSA business processes, outreach and 

awareness focused on oversight, enforcement, infrastructure, systems, 

and data.

Overview

The focus of this strategic objective is on FSA's efforts to increase support for partner 

institutions and coordination with vendors to provide improved cybersecurity services. This 

metric measures how well information systems are securely maintained, and the how the risks 

associated with compromises and breaches of sensitive information are controlled. This 

includes systems and services provided by the loan servicers — TIVAS and NFPs, ongoing 

Next Gen FSA initiative, and the existing legacy information systems.

The Department’s vulnerability management policy allows for vulnerabilities to be closed within 

a specified timeframe based on the criticality of the vulnerability. In accordance with the policy,

FSA implemented a process to track known vulnerability closures by allowable remediation 

windows. This approach encouraged vendors to complete fixes within those remediation 

windows to avoid plans of action and milestone creation. This helps to ensure that FSA systems 

become more secure in a timelier manner. 

In addition, FSA successfully set up the infrastructure and configured the Partner Connect 

solution. This initiative helped the Partner Connect platform deliver fast, quality web experiences 

to their end users while mitigating against edge attacks without compromising delivery and 

availability.

FY 2021 Performance Summary and Analysis

There is one performance measure for this strategic objective. FSA did not meet its annual 

target on this metric. In FY 2021 there were an increased number of business and partner 

systems enrolled in programs that provided a more real-time view of ongoing system security 

postures, i.e., Continuous Diagnostics and Mitigation (CDM), and ongoing security 

authorizations). Subsequently, FSA discovered a higher number of security findings with 

systems leading to a higher number of plans of action and milestone being created. Although 

the target was not met, the immediate identification of these issues affords FSA the opportunity 

to develop strategies to resolve them, and not allow any system to go unfixed and be 

susceptible to a potential breach in the future. 
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Key Successes and Opportunities

The performance measure under this strategic objective is to increase partner/vendor 

cybersecurity effectiveness by reducing the total number of FSA system assessment findings by 

20% per year. The increased number of systems enrolled and participating in the Ongoing 

Security Authorization program ensured that FSA had a closer to real time view of the 

maintenance of cybersecurity requirements implemented at the systems. The Ongoing Security 

Authorization is an assessment program that supports the Authorities to Operate (ATO). 

Additionally, for new systems being developed, ATOs were being granted for shorter durations 

and with strict stipulations that must be met to maintain that ATO in the future.

The key challenges facing this objective were to address the barriers to fully implement 

mitigating strategies and achieve expected targets, including updating contract language, 

communicating new or evolving cybersecurity laws and federal requirements, and creating more 

visibility into the real-time security posture of third-party service providers. FSA launched the 

following initiatives to respond to these challenges: 

• Enrolled third party service providers in the CDM program, 

• Added specific cybersecurity requirements language in contracts for all new systems 

and updated language in contracts for existing systems, and

• Ensured the appropriate number of subject matter experts support the cybersecurity of 

FSA systems.

All activities are anticipated to be completed by the end of FY 2022 Quarter 2 in accordance 

with Executive Order 14028 requirements on Improving the Nation’s Cybersecurity. The 

success of the information systems to manage risk is reflected in the Department's 

Cybersecurity Risk Framework Scorecard.
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Performance Metric

Performance Metric 4.1. Increase partner/vendor cybersecurity effectiveness by reducing the 

total number of FSA system assessment findings by 20% per year.

Table 46: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 3,561 2,800 3,976

Performance Result – – – Not Met Not Met

Note: Data not available prior to FY 2020.

Metric Definition: This metric measures the number of findings discovered during independent 

assessments or continuous diagnostics and monitoring efforts that are indicative of potential cyber 

security issues leading to a breach of privacy information or the potential compromise of an information 

system.

Data Source: FSA Enterprise Cybersecurity Group, Department Cybersecurity Assessment and 

Management Shared Service.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 4.2 

Improve student privacy data and cybersecurity controls of Institutions of 

Higher Education (IHEs) through outreach and communication, to mitigate 

future cyber-incidents and breaches.

Overview

To improve student privacy data and cybersecurity controls of IHEs, FSA’s strategy for 2021 

was contacting IHEs and working with them to establish Corrective Action Plans (CAPs) to 

ensure compliance objectives were achieved. FSA’s strategy and operations have proven 

effective and have led to notable improvements in outcomes and risk reductions, which will 

impact cybersecurity and student data privacy now and in the future.

Faster remediation reduces the scope of the incident, improves student privacy and 

cybersecurity controls, leading to stronger data protection and cybersecurity safeguards. To 

support faster remediation, FSA provided Electronic Announcements and collaborated with 

IHEs to promote the protection of student data and ensure schools appropriately safeguard 

information. FSA implemented several actions to effectively communicate cybersecurity 

information for IHEs to enhance their cybersecurity posture, resulting in improved relationships 

with IHEs, support for their efforts to safeguard information, and a better understanding of the 

overall cybersecurity posture of IHEs within the education sector.

In addition, FSA delivered a proposed implementation plan to stand up a Command Center for 

compliance with NIST 800-171 CUI requirement. This plan will increase collaboration, 

information sharing, and cybersecurity oversight with schools. 

FSA’s future improvements to the current strategies include:

• Alignment with the President's Executive Order 14028 on Improving the Nation's 

Cybersecurity issued on May 12, 2021, through formulating strategic and operational 

improvements to the Gramm-Leach-Bliley Act (GLBA) program in FY 2022. 

• Deployment of information technology systems to improve interaction with IHEs. These 

improvements will provide better quality of service, enhance metrics, support trend 

analysis, and facilitate more effective communications.

• Collaboration with industry partners, Cybersecurity and Infrastructure Security Agency, 

and IHEs to improve cybersecurity posture of IHEs by establishing information security 

standards.

FY 2021 Performance Summary and Analysis

There are two performance metrics for this strategic objective. Both metrics met their annual 

targets in FY 2021.

Key Successes and Opportunities

FSA collaborates with IHEs to ensure CAPs are in place to address GLBA Audit noncompliance. FSA’s strategy for 2021, first year of operations, was to contact schools, inform 
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them of the GLBA requirements, and track their progress as it collaborates with them on CAPs. 

Risk has been reduced with each cybersecurity requirement met and each CAP achieved. Last 

year, no schools were helped through this process and a year elapsed before an audit would 

show any improvement in compliance. Since April 2021, FSA has collaborated with 303 schools 

and 100 have met all the requirements. 

While there are many backlogged GLBA compliance reports to review, and it will take time to 

allow schools to achieve compliance, FSA has found schools to be responsive and, in many 

instances, have already satisfied the GLBA Cybersecurity requirements. FSA’s strategy and 

operations have proven effective and have led to notable improvements in outcomes and risk 

reductions, which will impact cybersecurity and student data privacy now and in the future. The 

well-known increase in cybersecurity breaches, ransomware attacks, and supply-chain attacks 

are external factors beyond the scope of agency efforts which significantly increased the 

magnitude of the problem being addressed. 

The goal of performance metric 4.2.B is to reduce incident reporting time at Institutions of 

Higher Education. FSA provides Electronic Announcements and collaborates with IHEs to 

promote the protection of student data and ensure schools appropriately safeguard information. 

Topics include ransomware, CUI & GLBA, email scams, and identity verification. In FY 2021, 

FSA implemented several actions to effectively communicate cybersecurity information for IHEs 

to enhance their cybersecurity posture, as follows:

• Published four Electronic Announcements to the Partner Connect Knowledge Center 

informing institutions of potentially impactful technology security alerts 

• Provided technical assistance to 45 IHEs in response to breach incidents to 

cybersecurity safeguards

• Conducted 18 outreach engagements and activities regarding data privacy and the 

information technology security requirements of IHEs 

• Launched Microsoft Exchange campaign targeting 647 Title IV institutions 

• Established new oversight and compliance of GLBA audits relating to cybersecurity

As a result, FSA improved relationships with IHEs, supported their efforts to safeguard 

information, and gained a better understanding of the overall cybersecurity posture of IHEs 

within the education sector. To improve outcomes and communication, FSA is growing its

contact database of IHE Chief Information Officers, Chief Information Security Officers, 

Information Technology (IT) Directors, and Compliance Officers through internal and external 

list acquisition.
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Performance Metrics

Performance Metric 4.2.A. Increase Institutions of Higher Education cybersecurity 

effectiveness by reducing GLBA cybersecurity non-compliance by 20% per year.

Table 47: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 177 177 126

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020.

Metric Definition: This performance metric measures FSA’s effectiveness in reducing GLBA 

cybersecurity non-compliance at IHEs. FY 2020 was the first year that IHEs were required to comply with 

cybersecurity metrics as part of GLBA annual audits of institutions.

Data Source: The record of GLBA Audits managed by Partner Connect.

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 4.2.B. Reduce incident reporting time at Institutions of Higher Education.

Table 48: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 87.5 days 87.5 days 32.7 days

Performance Result – – – Baseline Met

Note: Data not available prior to FY 2020.

Metric Definition: The target is an indicator of a school's ability to discover potential privacy breaches or 

cybersecurity incidents, which may impact Title IV student or financial information, and report them as 

required per their agreements. 

Data Source: Self-reports from the schools, discovery through media reports, and information derived 

from internet research activities.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 4.3 

Build an effective cybersecurity culture through employee awareness, 

training and accountability focused on protecting systems and data.

Overview

As cybercrime becomes more lucrative, the probability of cyber-attacks against FSA assets and 

employees will increase. It is important to understand the short-term and long-term effects 

cyberattacks can have against FSA’s business and develop a proactive strategy to deal with 

threat actors. FSA’s goal is to promote strong cybersecurity awareness among its employees 

and contractors, as well as provide information on how to avoid phishing emails and other scam 

tactics. In FY 2021, FSA educated staff on cyber threats faced and the importance of following 

procedures correctly. 

In addition, FSA and the Department invested in situational awareness training. Overall, 

employees are becoming more aware when dealing with situations related to cybersecurity.

While training helps to mitigate some threats, human error is also a factor needing mitigation.

Human errors can be reduced by consistently improving safety nets through well documented 

processes and investing in comprehensive Data Leakage Prevention (DLP) security strategy

and solutions. 

FY 2021 Performance Summary and Analysis

There is one performance measure for this strategic objective. FSA did not meet its annual 

metric target. The metric result includes DLP of PII leakage, and Security Operations (SecOps) 

tickets due to employees failing to properly handle PII information, provided by the Department. 

In FY 2022, FSA plans to revise its measurement to introduce a more realistic approach to track 

this strategic objective to reflect ongoing changes in the environment, deployment of new tools 

to detect issues with PII, and the need to fine tune those tools at specific time frames within the 

fiscal year. 

Key Successes and Opportunities

FSA collaborated with the Department to ensure Cybersecurity Awareness Training was 

provided to FSA. The collaboration extended into tracking employee performance during 

phishing exercises, and monitoring DLP metrics and Sec Ops tickets related to PII. FSA 

continuously promoted a culture of cybersecurity in its workplace, including training employees 

about safe online computing, emphasizing strong passwords, and placing a particular emphasis 

on tricks related to social engineering. The organization demonstrated positive resilience in the 

last 6 exercises, which means more users consistently reported the phishing as compared to 

susceptible users. Simulated phishing exercises were sent to 2,260 FSA user email accounts 

belonging to the Department. These email addresses included 1,442 employees and 818 

contractors. 2,219 of 2,260 (98.2%) network users successfully passed cybersecurity 

awareness exercise #5 run in July 2021; FSA’s target was 90% pass or higher.

In addition, situational awareness was emphasized across the employee base to minimize 

cybersecurity incidents. To this end, throughout FY 2022, FSA will continue sending out helpful 

articles covering the latest type of threat, results of phishing exercises, useful tips, and 
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discussing cybersecurity during all-employee meetings. FSA will also remind employees they 

are the first line of cyber defense and that they are essential to ensuring the confidentiality of 

sensitive business data. Overall, employees are becoming more aware when dealing with 

situations related to cybersecurity, and the approach to strengthening employee decisionmaking will expand through similar efforts in the next fiscal year.
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Performance Metrics 

Performance Metric 4.3. Decrease the number of employee-related cybersecurity events 

associated with inappropriate use, distribution, or storage of Personally Identifiable Information 

(PII) and financial information by 20% a year.

Table 49: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 1,713 1,440 2,642

Performance Result – – – Met Not Met

Note: Data not available prior to FY 2020.

Metric Definition: The target is an indicator of employees’ ability to properly oversee, store and distribute 

sensitive privacy and financial information. The actual result includes DLP of PII leakage, and SecOps 

tickets due to employee failing to properly handle PII information.

Data Source: FSA SecOps, email reports, exercise results, and Office of the Chief Information Officer 

(OCIO) Data Loss Prevention metrics.

FY 2021 Period of Performance: October 2020 through August 2021.
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Strategic Goal 5: Enhance the Management and Transparency 

of the Portfolio

Goal Leader: Deputy Chief Operating Officer, Office of Strategic Measures and Outcomes

Table 50: Goal Objectives

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

Strategic Objective No. Strategic Objective

Strategic Objective 5.1 Improve the management and transparency of FSA’s student loan 

portfolio performance.

Strategic Objective 5.2 Provide analytics and operational support for a customer-centric, 

data-driven, performance-based organization.

Strategic Objective 5.3 Leverage portfolio analytics to drive improved outcomes for 

customers and taxpayers.

Strategic Objective 5.4 Increase vendor performance through quality management activities 

centered on customer service and product delivery.

Goal Spotlight

The COVID-19 emergency and the relief efforts that FSA immediately implemented have made 

a significant impact on FSA’s business partners, customers, and the overall student loan 

program. In FY 2021, FSA has worked to interpret the changes in the environment and their 

effects on the performance measurements within Goal 5. With the federal student loan portfolio 

currently surpassing $1.6 trillion, FSA fully understands its fiduciary responsibility to effectively 

manage the successful return to repayment for the millions of borrowers it serves. 

FSA has been consistent in its evolution to become a customer-centric and outcome based 

organization. FSA will be successful by aiding borrowers in making informed decisions that 

lessen the burden of debt associated with their education, while maintaining the appropriate 

access to aid for students and families. This effort has required enhanced analytic, risk 

management, performance management, and quality management capabilities to provide better 

outcomes for students and greater value to taxpayers. 

The insights gained from the work performed in these areas over the past year will help FSA 

inform policymakers and taxpayers about the risks and opportunities in the portfolio. This 

information is also helping to direct both operational and stakeholder interventions, support 

resource allocation, guide customer-centric decisions, and inform legislative or regulatory 

changes that will allow for better overall portfolio performance.
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Strategic Objective 5.1

Improve the management and transparency of FSA’s student loan portfolio 

performance. 

Overview

The FSA Data Center launched in FY 2009 and is considered the public, online repository of 

information about the federal student aid programs. The Data Center primarily consists of static 

Excel spreadsheets which are updated on a monthly, quarterly, and annual basis. Presently, 

FSA regularly publishes more than 70 data sets which offer a continuous level of transparency 

for both internal and external stakeholders in a timely manner with accurate, repeatable data 

reporting. By offering access to the information on-line, the Data Center affords stakeholders 

self-service opportunities to review and evaluate data about the Title IV programs. In the 

upcoming year, the Data Center will foster transparency of the loan program on two fronts: 

automation of running the existing reports and establishment of a public-facing dashboard that 

is more interactive than the Excel spreadsheets. 

To further FSA’s accountability, stakeholders can also submit more specific data requests to 

FSA, and these requests are fulfilled and independently validated by a cross-organizational 

team which has been in place since FY 2013. Many data process requests are minor variations 

on the reports that are already published, and most of these ad hoc requests can potentially be 

addressed with the implementation of an interactive, self-service dashboard. Regarding the 

existing reports (and additional ones FSA may add to the Data Center over time), this growing 

suite of regular Data Center reports has been run manually with very limited disruption.

Continuous automation of specific data reports will generate increased benefits for an evolving 

stakeholder base who utilizes this information, including the potential of faster posting to the 

web site for each update. In FY 2021, FSA invested in analytical capabilities to further its goal of 

increasing the number of automated processes, resulting in the release of more frequent data 

sets. FSA has also explored new opportunities to improve the user experience with the Data 

Center by making it easier to navigate and combine existing data sets. 

In regard to FSA’s improved management of the loan portfolio, there were few challenges 

greater than the on-going impact of the COVID-19 emergency on this objective and its 

associated metrics. For example, the administrative forbearance associated with the CARES 

Act legislation, also referred to as the payment pause, was extended several times during the 

fiscal year. To this end, since March 2020, most borrowers who were actively repaying their 

loans have had their loans moved to forbearance. Therefore, several of the calculated metrics 

under 5.1 and 5.3 are not currently representative, because they focus on loans in Active 

Repayment (current and past-due), while the majority of the loans are in forbearance, and most 

borrowers still paying are those with their loans in forbearance. As the return to repayment is 

initiated in FY 2022, FSA will utilize existing performance metrics to monitor changes in 

borrower behavior and repayment trends to support the Department with data and analysis in 

order to manage the student loan programs in the most efficient manner. Additionally, FSA has 

developed dedicated methods to monitor the unique circumstances of the early months when 

the return to repayment program begins.
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FY 2021 Performance Summary and Analysis

There are two performance metrics for this strategic objective. One metric met its annual target 

while the other metric could not provide representative data. This metric, 5.1.B, Outstanding 

Direct Loan Portfolio in Current Repayment Status, has an actual result of 100% because it 

focuses on active repayment. However, during the COVID-19 emergency, this metric has not 

generated representative or useful results, as the data is inconsequential due to the millions of 

borrowers currently in an administrative forbearance status. While this metric showed seven 

years of improvement prior to the pandemic, it will need to undergo a baseline assessment 

during FY 2022 and/or FY 2023, which will be used to set targets for future years.

Key Successes and Opportunities

In 2021, the Enterprise Data Office within FSA piloted a more robust self-service module to 

continue to expand and improve the FSA Data Center in alignment with stakeholder needs. In 

preparation for this initiative, FSA had direct engagement with institutional partners.

This effort has resulted in a contract acquisition at the close of the fiscal year. The contract will 

enable new interactive informational dashboards to be developed on StudentAid.gov during 

FY 2022. To further support the improvement of the information stakeholders receive, additional 

FSA staff have been trained to expedite both the validation and automation of Data Center 

reporting. FSA has also worked to reduce the timeline for creating monthly data tables, which 

provides subject matter experts within FSA with streamlined access to the data sets, allowing 

more time for analysis. This process improvement has allowed the FSA data team to compile, 

format and submit data reports into agency clearance for approval at a faster rate than previous 

years.

The Enterprise Data Directorate (EDD) refined the reports that will be run each month for return 

to repayment that it had begun during FY 2020 and partnered with other FSA offices and 

external vendors on leveraging data for borrower outreach campaigns. EDD is also participating 

operationally via FSA’s TEDI and always-on outreach campaigns. Transitioning 26 million 

forbearance borrowers into Active Repayment during the February 2022 timeframe will pose a 

significant operational and logistical challenge to FSA and, from a data standpoint, it will 

increase the difficulty to forecast expectations associated with the current performance metrics 

under this strategic objective. 

To mitigate the impact of these changes on the analysis of performance, EDD began periodic 

crosscutting meetings with the FSA Risk Management and the Loan Servicing teams to ensure 

that targets and baselines could incorporate operational factors and changes. These meetings 

will help FSA to re-baseline metrics related to repayment, delinquency, and default after the 

return to repayment period begins. Several offices, including EDD, will have additional 

temporary metrics monitoring the return to repayment that can provide additional perspective for 

metrics such as 5.1.B Outstanding Direct Loan Portfolio in Current Repayment Status.
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Performance Metrics

Performance Metric 5.1.A. Initiate monthly reporting to the public through the FSA data center.

Table 51: Performance Metric Results

Fiscal Year

FY 

2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 56

Standardize

reports and pilot

self-service 

module

Reports 

Standardized 

and Pilot 

Completed 

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: This metric has a target to standardize reports and pilot self-service module in 

FY 2021.

Data Source: FSA data request process and queries. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 5.1.B. Outstanding Direct Loan Portfolio in Current Repayment Status.

Table 52: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 85.7% 86.5% 86.7% 93.7% N/A 100%

Performance Result Met Met Met Baseline N/A

Metric Definition: During the COVID-19 emergency, this metric has not generated representative or 

useful results, as the data is inconsequential due to the millions of borrowers currently in an 

administrative forbearance status. This metric demonstrates an increase or decrease in the percentage of 

FSA loan portfolio dollars in a current repayment status. Current Repayment is defined as the percentage 

of Direct Loan principal and interest identified as being in an “active repayment” status. For this metric, 

loans are defined as being in “active repayment status” if they are current repayment or delinquent and 

being serviced by a non-default service. Active Repayment does not include periods when payments are 

temporarily suspended (in school/grace or deferment/forbearance), and if they have not been identified as 

being in non-defaulted bankruptcy, at the default servicer or otherwise excluded (e.g., due to a TPD 

determination). Direct Loans are further categorized as being “Current” if no more than 30 days have 

passed since the last payment due date.

Data Source: NSLDS database. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 5.2 

Provide analytics and operational support for a customer-centric, datadriven, performance-based organization.

Overview

In a continuous effort to improve service to borrowers and customers, support responsible 

borrowing, and encourage repayment, FSA recognized the need for enhanced analytical 

performance management and risk management capabilities to be built into its programming. As 

the student loan environment has evolved in response to the COVID-19 emergency, FSA 

increased this focus by more efficiently sharing information internally across the organization 

and driving data-driven decisions in support of better results for stakeholders. For this objective, 

FSA has worked throughout FY 2021 to enhance its Enterprise Risk Management (ERM) 

strategy and framework to enable risk-intelligent decision-making for improved portfolio and 

operational outcomes. FSA has also expanded the body of work associated with the timeline for 

implementation of the FUTURE Act, inclusive of the incorporation of the FAFSA Simplification 

Act, with the goal of easing the administrative burden to borrowers and increasing access to 

financial aid.

The ERM team works collaboratively with all business units so that risk reporting can be found 

at various levels in the organization and at different points in processes. This risk reporting 

seeks to integrate risk, strategy, and performance and provide transparency into these 

connections to better meet goals and objectives and fulfill FSA’s mission. ERM team members 

are embedded in significant organizational initiatives providing risk support from planning to 

execution.

For FSA, the ability to meet the implementation timeline of the FUTURE Act and FAFSA 

Simplification Act requires the prioritization of hiring employees who will support the 

implementation. In addition, the implementation also relies on FSA’s ability to identify the 

servicers and servicing backend systems that will be integrating with the FUTURE Act solutions. 

For example, the execution of the FUTURE Act Computer Matching Agreement is contingent on 

the Total and Permanent Disability (TPD) and Income Driven Repayment (IDR) back-end 

solution decisions. It is critical for standard operating procedures and changes to enterprise 

processes (e.g., changes to the Technology Acquisitions requirements, 1075 Authority to 

Operate process, budget approval process) to be documented and socialized throughout the 

organization.

The FAFSA Simulator was built and undergoing user acceptance testing when the FAFSA 

Simplification Act passed back in the first quarter of FY 2021. As a result, the implementation 

teams had to recalibrate their approach for gathering customer feedback and testing the 

changes to the FAFSA form. 

The FUTURE Act team has worked across federal agencies to make progress to include 

ongoing discussions with the OMB and the Department on potential changes to the FUTURE 

Act provisions and with the IRS to clarify the confidentiality of Internal Revenue Code (IRC) 

6103 (a)(3) and disclosure reporting/IRC 6103 (p)(3) for FSA and FSA’s partners. The FUTURE 

Act Direct Data Exchange interface (FA-DDX) launched in December 2020, which established a 

direct data connection with the IRS to request and receive FTI.
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FY 2021 Performance Summary and Analysis

There are two performance metrics for this strategic objective. Both metrics met their annual 

targets.

Key Successes and Opportunities

FSA’s goal is to eventually move the organization to be risk intelligent, where leadership 

continually demonstrates a strong commitment to risk management with a formal governance 

structure. Additionally, a risk intelligent organization has a formal risk appetite which has been 

communicated and risk assessment methodologies, tools, and templates are standardized, 

understood, and used throughout the organization. Inclusive within this framework, performance 

is measured against strategic goals and linked to key risk indicators. In FY 2021, the ERM team 

continued to provide enhanced training, tools, templates, and reports to increase the connection 

between risk, strategy, and performance. These enhanced products helped FSA to better 

manage risk across the enterprise and continue to move toward becoming a more risk intelligent 

organization. Some specific examples of ERM’s accomplishments in support of this 

performance metric include:

• Completed risk assessments, risk-based decision documents, and risk alerts to assist 

FSA in better understanding and managing risk to implement provisions of legislation 

more effectively (e.g., FUTURE Act and FAFSA Simplification Act), aimed at helping 

students apply for and receive federal financial aid

• Worked with key stakeholders across FSA to identify key risks and mitigation activities 

for all five of FSA’s strategic objectives, identified key risk indicators, and created 

corresponding dashboard reports to show both qualitative and quantitative risk 

information

• Worked collaboratively with FSA and Department stakeholders during the conduct of 28 

FSA audits and 4 non-FSA audits. Tracked and managed closing evidence for 10 GAO 

and OIG audits across FSA 

• Closed more than 5,300 OIG fraud referrals

• Collaborated with key FSA stakeholders to complete the design and identify 

requirements for the transition of the OIG fraud referral process to BPO vendors

In conjunction with efforts toward the timeline for FUTURE Act implementation, FSA 

accomplished the following in support of this metric:

• Completed high-level business and technical requirements for FUTURE Act TPD, IDR, 

and FAFSA solutions

• Established collaboration session with Management Services to track and coordinate the 

hiring of resources for the SABER initiative—incorporating the FUTURE Act and FAFSA 

Simplification Act

• Established and implemented a SABER Decision Governance Framework to escalate 

and resolve outstanding decisions and issues

• Awarded multiple contracts to begin the development of the applications and 

infrastructure that will manage and store FTI. 
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• Released the Award Eligibility Determination solicitation, which will enable FSA to 

procure the new FAFSA backend system that will process FAFSA forms and determine 

aid eligibility for the 2024–25 award year

The Award Eligibility Determination solution will increase FSA’s agility, efficiency, stability, and 

security in delivering changes to students and families. It will also enable FSA to fully implement 

the FUTURE Act and FAFSA Simplification Act for the 2024–25 award year. The finalization of 

the FA-DDX interface is a critical milestone that allows for the secure flow of FTI from IRS to 

FSA, which will help to reduce the net cost of improper payments. FTI will also be leveraged to 

improve analyses and forecasts for estimating costs.

The implementation of both the FUTURE and FAFSA Simplification Acts will dramatically 

change the way students and families engage with FSA’s financial aid program. As FSA assists 

customers in transitioning back into a positive repayment posture at the close of the 

administrative forbearance period in FY 2022, it will be imperative that the provisions associated 

with this performance objective become fully implemented. 
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Performance Metrics 

Performance Metric 5.2.A. Using the Enterprise Risk Management (ERM) Maturity Model, 

move the organization towards a “Risk Intelligent” position. The model defines organizational 

progress in the following way: 

• 1 = Initial; 

• 2 = Fragmented; 

• 3 = Integrated; 

• 4 = Risk Intelligent.

Table 53: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 1.6 2.5 2.5

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: The overall target for FY 2021 is to move the organization from Fragmented to a more 

Integrated organization where leadership understands the importance of risk management and considers 

it in decision making. In addition, the metric will move in a positive direction as risk discussions are more 

structured and occur at varying degrees relating to strategy setting. In an integrated organization, most 

risks are aligned to strategies and risk appetite is formally defined and is discussed as part of daily 

decision making by senior leadership. 

Data Source: Stakeholders surveys and ERM Maturity Matrix. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 5.2.B. Implementation timeline for FUTURE Act. 

Table 54: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – N/A

Develop data 

sharing 

procedures and 

technology 

interface. Enable 

a non-production 

proof of concept 

that will inform the 

FAFSA solution

Developed 

FAFSA & 

TPD 

Simulators, 

and the FADDX interface

connection 

with the IRS

Performance Result – – – N/A Met

Note: Data not available prior to FY 2020.

Metric Definition: The FUTURE Act was enacted on Dec. 19, 2019. This law allows the IRS to disclose 

certain federal tax information to the Department for the purposes of providing recertification of income for 

income-contingent or income-based repayments of student loans; determining discharges of loans based 

on TPD; and determining the amount of student financial aid under the HEA.

The implementation of the FUTURE Act requires numerous systems changes and security upgrades in 

FSA to comply with both IRS security requirements and the provisions of the Act itself. FSA is working 

closely with more than 100 stakeholders and 15 offices from the Department, the IRS, and Treasury to 

implement the FUTURE Act. 

Data Source: N/A

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 5.3 

Leverage portfolio analytics to drive improved outcomes for customers and 

taxpayers.

Overview

The purpose of this objective is to highlight FSA’s focus on providing data-driven analytics to 

support borrower decision-making and to demonstrate how targeted engagement can improve 

outcomes when interventions become necessary. Even with most of the student loan portfolio 

being in administrative forbearance, the Default Risk at Application model and Third-Party Debt 

Relief (TPDR) fraud interventions have been in operations throughout FY 2021. The Origination 

& Disbursement Default Risk model and “always-on” email campaign began operations in 

summer 2021. “Always-on” means the interventions are event-driven, such as at the point of 

FAFSA submission, a disbursement made, or a missed payment, and subsequently automated. 

This differs from a normal system notification (“We’ve received your FAFSA”). The intention in 

the development of the analytical models reflected under this objective is to assist FSA in 

offering proactive support and interventions to help improve overall student loan repayment, at 

different intervals within the student aid lifecycle (from initial borrower to repayment).

The usage of data analytics and risk modeling allows FSA to track customer trends more 

carefully to better improve its ability to understand customer challenges. Due to the current state 

of the portfolio as well as ongoing legal challenges to systematic telephone outreach to 

borrowers, FSA understands it must evaluate and strengthen the customer treatments that 

result from its analytics process. In addition, FSA must measure the effectiveness of the emails 

sent to borrowers and improve them based on customer needs. In this area, it is also necessary 

to continue to be innovative in communication by building out alternative methods such as text 

messages and push notifications to reach borrowers. 

The COVID-19 emergency and the CARES Act’s relief benefits to borrowers with Departmentmanaged loans have significantly impacted results for several performance metrics under this 

objective throughout FY 2021. Nearly all non-defaulted Direct Loans in active repayment as of 

the end of September 2021 are current (on time or less than 31 days delinquent). New loans 

have been originated as well since March 2020. Loans that leave the grace period during the 

COVID-19 emergency quickly move to forbearance after entering repayment; similarly, loans 

that re-enter active repayment during the pandemic from an in-school deferment then move to 

forbearance. Currently, approximately a half-million borrowers have asked that the servicer 

move their loans out of forbearance and into repayment; the servicer moves these loans back to 

forbearance should they then become delinquent. However, borrower payments from 

Department-serviced borrowers during the pandemic have been received from those borrowers 

who are in forbearance. Additionally, some borrowers are consolidating their loans during this 

period. These consolidated loans enter repayment within a month and then shift into mandatory 

administrative forbearance. 

FSA has developed a detailed communications plan to remind borrowers of their obligation to 

resume payments. The organization is also working with oversight agencies and loan servicers 

to implement strategies to monitor the progress in returning loans into repayment and keeping 

them there after the administrative forbearance period ends. 
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FY 2021 Performance Summary and Analysis

There are four performance metrics for this strategic objective. One metric met its annual target. 

Three metrics did not generate representative results due to the COVID-19 emergency. Two of 

these metrics, Default Rate by borrower count and Percent of Recipients > 90 days delinquent, 

are at 0% because they focus on Active Repayment. While these two metrics showed five and 

seven years of improvement prior to the pandemic, they will need to undergo a baseline 

assessment during FY 2022 and/or FY 2023, to enable FSA to set targets for future years. The 

third impacted metric, Percentage of borrowers who did not make the first three payments, was 

a new measure in the FY 2020–24 Strategic Plan. While this measure showed promising trends 

historically for the three years prior to the pandemic, it has never been baselined and thus will 

need to undergo similar steps to develop annual targets. 

Key Successes and Opportunities

At different stages of the student aid lifecycle, such as application, disbursement, and 

repayment, different types of interventions are beneficial. In FY 2021, there are several 

examples where FSA has used analytics to positively impact borrowers:

• The TPDR technical proof of concept prevented borrowers from signing over their 

accounts to TPDR firms, or at minimum allowed the loan servicer to confirm these 

actions were being made at the borrower’s request.

• FSA has developed an always-on email campaign to mitigate delinquency when 

borrowers in forbearance return to repayment. The campaign is entitled TEDI. TEDI will 

communicate with borrowers when they miss payments and will send positive feedback 

to high-risk borrowers when they make payments as well.

• In utilizing the Default at Risk Application model, FSA has contacted 5.7 million 

applicants through email. The email open rate is approximately 51%, and the clickthrough rate is about 4%. This includes both always-on and notification interventions.

• The Default at Risk Origination and Disbursement model has assisted FSA in 

communicating to 1.9 million borrowers since going live over the summer. The email 

open rate is approximately 36%, and the click-through rate is about 4%. This includes 

both always-on and notification interventions.

In FY 2022, as customers move through the student aid lifecycle, additional data will become 

available to use for analytics. The models will subsequently be refined over time by their 

experience in operations. In addition, across the organization, the Enterprise Data Office subject 

matter experts will partner with internal stakeholders to finalize return to repayment and TEDI. 

This coordination will allow the team members to make any changes required by upcoming 

policy decisions.
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Performance Metrics

Performance Metric 5.3.A. Identify and provide intervention actions for customers at risk of 

default.

Table 55: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – 

Developed, 

tested, and 

deployed 

two projects

Implement 

pilot for 

default 

prevention 

program

Developed, 

tested, and 

deployed two 

additional 

projects

Performance Result – – – Met Met

Note: Data not available prior to FY 2020.

Metric Definition: This metric will track the development, testing, implementation, evaluation, monitoring 

and updates to Statistical and Machine Learning Models, methodologies, experimental designs, and 

interventions used in reducing customer risk of negative outcomes such as default. There will be multiple 

projects wherein models will be developed and deployed for assessing which customers would benefit 

most from receiving certain interventions such as specific emails, phone calls, skip tracing, and other 

actions. Benefit shall be measured on a project-by-project basis but will typically consider default related 

outcomes as well as costs of performing interventions. This metric will track how many projects exist and 

what phase of the development lifecycle they are in. Each project will have its own method of measuring 

its effectiveness once deployed with consideration to its experimental design and goals.

Data Source: FSA’s project plans for each individual intervention project. 

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 5.3.B. Default rate by borrower count.

Table 56: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – N/A N/A N/A

Performance Result – – – Baseline NA

Note: Data not available prior to FY 2020.

Metric Definition: This new metric provides the rate of Direct Loan borrowers entering default. It is a 

quarterly metric and similar to other repayment metrics, uses a four-quarter rolling average to address 

seasonal variations that are common in the loan program.

Data Source: FSA Data Center/NSLDS database.

FY 2021 Period of Performance: October 2020 through September 2021.
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Performance Metric 5.3.C. Percent of borrowers > 90 days delinquent.

Table 57: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance 10.9% 10.1% 9.8% 4.8% N/A 0%

Performance Result Not Met Met Met Baseline N/A

Metric Definition: This metric calculation is the count of Direct Loan recipients with loans 91–360 days 

delinquent divided by the count of Direct Loan recipients with delinquencies 0–360 days. In other words, 

the denominator includes current repayment as well as delinquency. The calculation uses recipient 

counts, rather than borrower counts, because borrower counts would approximately double system 

demands. Delinquency rates by recipient count are slightly higher than by borrower count. 

Data Source: NSLDS database.

FY 2021 Period of Performance: October 2020 through September 2021.

Performance Metric 5.3.D. Percentage of borrowers who did not make the first three 

payments.

Table 58: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – N/A N/A N/A

Performance Result – – – Baseline N/A

Note: Data not available prior to FY 2020.

Metric Definition: This metric tracks the percentage of Direct Loan borrowers who make the first three 

payments after entering repayment (maturity). FSA will use fiscal year maturity cohorts The universe will 

exclude military deferments, in-school deferments, and non-defaulted open bankruptcy status, as these 

are loan statuses where borrowers are not billed and not expected to pay. FSA will employ EDWA’s 

consolidation linking framework in case there are consolidations during a grace period (which are 

permitted) or early in repayment, so that those borrowers do not “fall out” of the cohort.

Data Source: EDWA servicing data.

FY 2021 Period of Performance: October 2020 through September 2021.
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Strategic Objective 5.4 

Increase vendor performance through quality management activities 

centered on customer service and product delivery.

Overview

FSA relies on a multitude of contracts and thousands of contract staff in its delivery of financial 

aid. Internal reviews and examinations provide a level of oversight which allows FSA to assess 

the performance of vendors, including loan servicers; track and monitor corrective actions; and 

serve as a reliable source to hold vendors accountable for substandard performance. In 

FY 2021, FSA has continued to monitor vendor performance through a stronger focus on key 

performance indicators and service level agreement metrics aimed at delivering more effective 

outcomes for students and greater value to taxpayers. Additionally, FSA has restructured how it 

identifies and enforces contract specifications when vendors need to improve on the delivery of 

services necessary to meet the outcomes for customers and taxpayers. 

The objective is supported by the reviews and examinations performed by the Operational 

Improvement and Oversight (OIO) Directorate and the Vendor Oversight Group (VOG). OIO and 

VOG have worked in a collaborative manner throughout FY 2021 to progress towards the 

annual target at the end of the fiscal year. This effort led to a revision of the performance metric 

established under this objective to include: 

• Broadening of the assessment category to include loan servicers and all vendors for 

potential review and examination 

• Analysis of major indicators for compliance and customer service 

• Tracking the percentage of contractually required performance metrics and industry 

standards for customer facing vendors

FSA aspires to drive more accountability within contract management when vendors fail to 

deliver the necessary outcomes for customers and taxpayers. The revised approach to vendor 

performance and quality management put forward in FY 2021 will improve transparency and 

collaboration within the organization which contributes to better outcomes for students and 

taxpayers.

FY 2021 Performance Summary and Analysis

There is one performance measure for this strategic objective. In FY 2021, VOG conducted six 

reviews of loan servicers which included analysis of how they managed specific tasks (e.g., 

transferring loans to another servicer) or the implementation of CARES Act provisions. This 

metric exceeded the annual metric target of three reviews to be completed. All six reviews are in 

the process of completing their final reports.

Key Successes and Opportunities

To successfully broaden and accomplish the objective, the collaborative oversight teams 

worked internally to gain knowledge into key FSA programs and processes assessed during 

their reviews. Within this process, the teams developed interview and research protocols to 
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gauge performance both within FSA and the impact through external partners. Seven reviews of 

FSA programs were completed in FY 2021, offering more than 50 recommendations for 

improvements. Based on the success of this method of internal program review, OIO and VOG 

have developed a coordinated FY 2022 Work Plan which includes specific focus areas to be

addressed. Based on the Work Plan, reviews will be conducted for the following focus areas: 

• FSA’s acquisition processes 

• Borrower’s return to repayment implementation process 

• FSA system and access control processes 

• Human resources process, practices, and procedures 

• The assessment of the BPO

By establishing the aforementioned focus areas, FSA aims to hold itself accountable for 

delivering on its goals and fulfilling the obligations of its PBO distinction.
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Performance Metric

Performance Metric 5.4. Conduct three vendor examinations annually.

Table 59: Performance Metric Results

Fiscal Year

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Actual Actual Actual Actual Target Actual

Performance – – – – 3 6 

Performance Result – – – – Met

Note: Data not available prior to FY 2021. This performance metric was revised in FY 2021.

Metric Definition: This metric tracks the number of quality assurance reviews conducted by OIO and/or 

VOG to measure the performance of loan servicers. The objective is to continuously enhance FSA’s 

oversight and management of loan servicers and/or FSA vendors by evaluating the efficiency and 

effectiveness of their compliance with contractual terms and statutory requirements.

Data Source: Internal OIO and/or VOG. 

FY 2021 Period of Performance: October 2020 through September 2021.
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Fiscal Year 2021 Accomplishments of Federal Student Aid

Fiscal Year 2021 Accomplishments of Federal 

Student Aid

During FY 2021, FSA realized additional accomplishments that were not measured specifically 

by the performance metrics implemented to measure performance against the FY 2020–24 

Strategic Plan. Although not measured by FSA performance metrics, these accomplishments 

are the result of initiatives FSA undertook to support the implementation of the strategic plan or 

legislative changes. This section describes FSA’s additional accomplishments.

FSA realized the following additional accomplishments in support of Strategic Goal 1:

Empower a High-Performing Organization.

• FSA Management Services implemented a remote New Hire Orientation during the 

COVID-19 national emergency, for both internal and external hires, to acquire a 

comprehensive understanding of the mission, strategic initiatives, and collaborative 

culture of FSA. Changes to the program have included providing Train-the-Trainer 

sessions for presenters, an enhanced new employee resource portal, and efforts to 

increase new employee awareness of Title IV programs and systems. These efforts 

have resulted in a 93% satisfaction rate for the program. 

• FSA Strategic Communications improved internal staff messaging by using feedback 

from employee and manager communication working groups. The improvements were 

illustrated through updates within The Source employee newsletter, a daily email series, 

and the “Week Ahead” communications, which improved staff experience on the 

Employee Share Library and FSA Landing Page during the COVID-19 emergency 

telework period. 

• Facilities, Security, and Emergency Management (FSEM) instituted enhanced cleaning 

procedures for all high touch points in the building, in accordance with CDC guidelines to 

ensure the security and safety of FSA employees during the ongoing COVID-19 national 

emergency. In coordination with the General Services Administration and building 

management, FSEM installed new hand sanitation stations, along with new signage 

throughout the buildings, reminding employees of social distancing and mask wearing 

requirements. 

• FSEM created an enhanced procedure for staff entering and exiting the building, by 

requiring check in/out at the front security desk. This information becomes very 

important for COVID-19 contact tracing procedures. 

• FSEM developed and refined business processes for vetting contractors that resulted in 

processing 80% or more cases within 14 days or less, averaging 10 days or less for 

scheduling investigations in the third and fourth quarters of FY 2021, and decreasing 

submission quality rates to less than 2%, surpassing the government average of 2% and 

eliminating rework by FSA and the contractors. All activities enabled timely onboarding 

for contractor personnel to support the FSA mission and service for borrowers.
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Fiscal Year 2021 Accomplishments of Federal Student Aid

FSA realized the following additional accomplishments in support of Strategic Goal 2:

Provide World-Class Customer Experience to the Students, Parents, and Borrowers We Serve.

• By February 2021, FSA ensured all loan servicers were compliant with branding efforts, 

transitioning from a loan servicer-branded design to a light touch FSA co-branded loan 

servicing model in alignment with Next Gen initiatives and in support of borrower 

conversions. 

• FSA created the FSA Electronic Questionnaires for Investigations Processing (e-QIP) 

platform to better track and monitor FSA contractor requests. All loan-servicing 

contractors were successfully migrated to the new e-QIP platform in three phases. 

Comprehensive training materials and multiple training sessions were provided for 119 

contractor staff initiators and approximately 50 FSA Contracting Officer’s 

Representatives. This migration has greatly improved FSA’s ability to anticipate and 

manage inbound workload, shift priorities as necessary for peaks, and increase vendor 

accountability during the contractor vetting process.

• FSA administered the shutdown of CornerStone, a federal loan servicer since January 

2012. Approximately 1.1 million borrowers were successfully relocated to another 

servicer with minimal borrower impact or complaints.

• In July 2021, it was announced that FSA would begin waiving verification of most FAFSA 

Institutional Student Information Record information, with very limited exceptions, in view 

of challenges and barriers resulting from the ongoing national emergency produced by 

the pandemic. This positive development helps ensure students have the most 

straightforward path to getting the financial aid they need to pursue further education by 

providing over 2 million FAFSA filers relief from verification.

FSA realized the following additional accomplishments in support of Strategic Goal 3:

Increase Partner Engagement and Oversight Effectiveness.

• PPO’s managed-systems supported the award of more than $120 billion in federal 

student aid during the 2019–20 award year. 

• In July 2021, the Department announced that it will further expand access to higher 

education in prisons by inviting new schools to participate in the Second Chance Pell 

experiment, which invests in students who are incarcerated by allowing approved 

schools to support those students through Federal Pell Grant funds. By inviting more 

schools to participate, the Department will allow up to 200 two- and four-year colleges 

and universities to offer prison-education programs through the Second Chance Pell 

experiment. FSA will assist in the administration of this program.

• During FY 2021, Partner Eligibility and Oversight Services (PEOS) Directorate supported 

the fulfillment of more than 120 Freedom of Information Act (FOIA) requests with a 

greater than 99% on-time fulfillment rate, and PEOS also provided responses to 

approximately 80 control mail responses to inquiries submitted to senior Department

officials by the public and by members of Congress. 

• The PEOS Performance Management Group released the FY 2022 National Standards 

for the five core business processes including Financial Analysis, Compliance Audit 

Resolution, Program Review, Eligibility, and Method of Payment. Additionally, the 

Performance Management Group resolved more than 340 internal Operational Support 
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Fiscal Year 2021 Accomplishments of Federal Student Aid

Branch Action Requests; answered 145 technical questions from the field which led to 

24 accepted recommendations for procedural updates; processed more than 230 

Financial Responsibility Notifications submitted; and more than 360 Letter of Credit 

documents submitted on behalf of institutions of higher education.

• PPO provided ongoing support, information, technical assistance, and other resources to 

students, institutions, and borrowers impacted by an upsurge of natural disasters across 

the southern and midwestern states, California, and the East Coast, including proactive 

communications before the disasters struck and communications following the disaster; 

technical and operational assistance; regulatory and administrative relief and reporting 

flexibilities. PPO issued over 8,000 emails to aid in the recovery efforts of over 4,000 

institutions, enrolling more than 3 million students.

• The MSURSD provides technical assistance and training to MSIs. This year based on a 

statistical analysis of MSIs and a predetermined set of data (compliance) points, the 

MSURSD group was able to lower the number of MSIs with severe compliance issues to 

the lowest number (22 out of 823 schools) in nine years.

• MSURSD prepared and conducted a Spring/Summer Workshop series for MSIs that 

addressed the top ten audit findings and institutional compliance with Title IV

regulations. FSA had 2,734 participants for the workshop series.

• PPO successfully calculated and released the FY 2018 Draft and Official Cohort Default 

Rates (CDRs) in September 2021 for guaranty agencies, lenders, and nearly 6,000 

IHEs. CDRs serve as a valuable compliance tool for FSA to assess school participation 

in the Direct Loan and Federal Pell Grant Programs. Publication of the CDRs further 

allows schools to submit appeals for various factors and adjustments to their CDRs, for 

which FSA also successfully adjudicated more than 90 CDR appeals this fiscal year.

FSA realized the following additional accomplishments in support of Strategic Goal 4:

Strengthen Data Protection and Cybersecurity Safeguards.

• Migrated the NSLDS mainframe data to a new platform, resulting in improved 

functionality and system security. 

• Awarded two cybersecurity blanket purchase agreement call orders for more than 

$108 million to ensure continuity of mission-critical cybersecurity support for FSA.

• Delivered and implemented the Correspondence Management System, and a Clery Act

Tracking System version 1.3 to support institutional compliance. 

• Streamlined former Information Resource Program Elements and developed new IT 

Contract Requirements, reducing the administrative burden and providing a streamlined 

set of requirements for completing IT Contract procurements for the enterprise.

FSA realized the following additional accomplishments in support of Strategic Goal 5:

Enhance the Management and Transparency of the Portfolio.

• Implemented Enterprise-wide Data Management and Analytics Platform Services which 

provides FSA with master data management and, during FY 2022, will integrate the data 

warehouse with a reengineered NSLDS database plus a state-of-the-art data lake.
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Fiscal Year 2021 Accomplishments of Federal Student Aid

• Worked with various FSA stakeholders and subject matter experts to draft a Borrower 

Awareness Toolkit and assist in the development of a Public Service Announcement 

TPDR video. Developed processes to manage over 2,700 TPDR companies and 

assigned over 80 companies for research and analysis.

• Drafted Suspicious Activity Report to streamline the review of TPDR companies and 

referral to enforcement agencies and completed 83 reports on TPDR companies for 

alleged fraudulent activity.

• Awarded multiple contracts to begin the development of the applications and 

infrastructure that will manage and store FTI. These contracts include systems and 

applications that will leverage FTI to perform analyses, forecasts, and process 

improvements related to the IDR, FAFSA, and TPD programs.

• Successfully removed the Subsidized Usage Limit Applies (SULA) requirement, 

pursuant to changes in the FAFSA Simplification Act. This removal provides future 

students the benefits of not having to consider the potential loss of subsidized interest 

choices when making course decisions. The removal of SULA will benefit institutions by 

reducing paperwork burden by an estimated 12,904 hours, saving $1.2 million of wages 

at a rate of $93.74 per hour, representing the $46.87 median hourly wage for 

postsecondary administrators doubled to capture benefits and overhead.

• Established a bi-weekly Safeguards IRS meeting to increase communication efforts 

between FSA and the IRS. This forum is used to resolve questions, clarify Publication 

1075 safeguards requirements, and strengthen the relationship between FSA and the 

IRS. 

• Supported the Department’s Small Business Utilization goal of 14% by contributing more 

than 9% in eligible dollars spent through contract acquisition with small businesses. The 

FSA Acquisitions Team consisting of Contracting Officers, Business Unit’s Program 

Managers and Subject Matter Experts are actively partnering with the Department’s 

Office of Small and Disadvantaged Business Utilization to track all small business 

opportunities and continue to contribute to this effort in FY 2022.

• Received 367 new FOIA requests and closed 368 requests and received 1,252 new 

Privacy Act requests and closed 1,096 requests.
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Additional Reporting Requirements

Additional Required Reporting (Unaudited)
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Additional Reporting Requirements

Overview of Additional Required Reporting

Additional Required Reporting includes the additional reporting requirements mandated by the 

HEA. These reports, specifically required in to be included in the Annual Report are listed 

below. 

• Legislative and Regulatory Recommendations: This report details legislative and 

regulatory recommendations that FSA provided to the Department in support of the 

Department’s regulatory activities.

• Annual Bonus Awards: This report discusses executive compensation at FSA in 

compliance with the legislative requirements under the PBO legislation that created FSA.

• Report of the Federal Student Aid Ombudsman: The report discusses the FSA 

Ombudsman’s activities in accomplishing its statutory mission of addressing complaints 

about Title IV financial aid programs.
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Additional Required Reporting

Legislative and Regulatory Recommendations

One of FSA’s mission responsibilities under the law is to provide input on legislative proposals 

from Congress and from the Administration and to support the Department’s regulatory activity. 

FSA also may suggest legislative or regulatory changes for consideration by the Department’s 

senior policy officials. These recommendations customarily center on improving and simplifying 

the Title IV federal student assistance programs for FSA customers, minimizing administrative 

costs, and improving program integrity. FSA’s recommendations inform the Department’s 

policymaking process, including its activities and decisions related to each year’s budget 

process. FSA provides this input and recommendations by direct contact with colleagues in the 

various policy offices within the Department, including the Office of the Under Secretary, the 

Office of Postsecondary Education, and the Office of Planning, Evaluation and Policy 

Development at both the senior policy level and at the staff level. During the past year, FSA 

provided specific recommendations to policy officials on several issues, including:

• Developing guidance and providing regulatory flexibility and relief for the purpose of 

assisting students, borrowers, institutions of higher education, and others affected by 

natural disasters, including the COVID-19 pandemic and the CARES Act, 

• Interpreting the provisions of the Consolidated Appropriations Act, 2021, which makes 

significant changes to the requirements for completing the FAFSA®; determining a 

student’s eligibility for federal student aid; and calculating Federal Pell Grants, 

• Interpreting the provisions of the Stop Student Debt Relief Scams (STOP) Act, 

• Ending the prohibition on Federal Pell Grants for students incarcerated in federal and 

state penal institutions and developing regulations for the Department’s and states’ 

approval of prison education programs, and

• Supporting the Department’s negotiated rulemaking efforts related to closed school 

discharges and discharges for TPD; PSLF; income contingent repayment; and borrower 

defense to repayment.
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Annual Bonus Awards

As required by the HEA, the Annual Report includes performance ratings and related awards for 

FSA senior managers and Senior Executive Service (SES) staff. Included in this section are the 

number of senior managers and SES staff on board as of the end of FY 2021. However, 

because FY 2021 performance results were not finalized at the time this report was prepared, 

the section discusses FY 2020 performance results.

At the end of FY 2021, there were 118 FSA senior managers and 3 SES members. The FSA 

Executive Committee contained 13 of the 118 senior managers and 1 SES member. As 

members of the FSA Executive Committee, these senior managers reported directly to the 

COO. The remaining 105 senior managers and 2 SES staff served in a variety of senior 

positions and capacities within FSA.

The following section discusses FY 2020 performance results.

For performance year 2020, the COO received a rating of Exceptional Results and a 

performance bonus of $59,190 for his work at FSA.

There were also FY 2020 performance ratings and awards for five senior managers who were 

members of the FSA Executive Committee. The composition of those rated included: four senior 

managers achieved a performance rating of Exceptional Results; and one achieved a 

performance rating of High Results. The composition of ratings for the five SES members not on 

the FSA Executive Committee were as follows: one SES member achieved a performance 

rating of Exceptional Results, three SES members achieved a performance rating of High 

Results, and one SES member was not eligible to receive a performance rating.

Award amounts for the FSA Executive Committee ranged from approximately $15,000 to 

$25,000, depending on the performance rating of each individual. Only individuals with 

performance ratings of High Results Achieved or Exceptional Results achieved were eligible for 

performance-based awards.

The composition of ratings for the 97 senior managers who did not serve on the FSA Executive 

Committee last year were as follows: 50 senior managers achieved a performance rating of 

Exceptional Results; 41 achieved a performance rating of High Results; and 6 achieved a 

performance rating of Results Achieved.

Award amounts for those senior managers achieving an Exceptional Results rating ranged from 

$3,579 to $15,000 with a median award of $8,241. Award amounts for those achieving a High Results 

rating ranged from $1,034 to $9,500 with a median award of $5,352.

For additional information, please refer to: Higher Education Amendments 1998/sec141
Report of the Federal Student Aid Ombudsman

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Report of the Federal Student Aid Ombudsman

Established by the HEA, the Ombudsman began operations on Sept. 30, 1999. The 

Ombudsman is responsible for resolving complaints regarding Title IV financial aid programs. 

Pursuant to the HEA, the Ombudsman compiles and analyzes data on borrower complaints and 

makes appropriate recommendations. Additionally, the Ombudsman is required to describe the 

activities and evaluate the effectiveness of the role during the preceding year.

The Ombudsman Group oversees all cases received by FSA through its Feedback Center, as

well as complaints referred by Members of Congress, the Department, the Consumer Financial 

Protection Bureau, and other stakeholders. The Ombudsman Group uses a collaborative 

approach in working with institutions of higher education, lenders, guaranty agencies, loan 

servicers, and other participants in the student loan programs to resolve issues in accordance 

with applicable law. 

Summary of All Cases Received in Fiscal Year 2021

The primary method by which students, student loan borrowers, and other users submit 

complaints or raise issues to FSA is through its Feedback Center.15 Feedback Center 

submissions include general inquiries, complaints, allegations of suspicious activity, disputes, 

and positive feedback, collectively referred to as “cases.”16 During FY 2021, FSA received 

46,497 cases. Case types are defined as follows: 

General Inquiry Cases involving general federal student aid questions .

Complaint Cases in which there is an expression of dissatisfaction with the 

federal financial aid experience.

Suspicious Activity Cases alleging suspected fraud during the federal financial aid 

process.

Disputes Cases handled directly by the Ombudsman Group.

Positive Feedback Cases providing compliments about Title IV programs, program 

participants, FSA staff, and/or FSA vendors. 

15 U.S. Department of Education, FSA, Feedback Center, https://studentaid.gov/feedback-center/ (last accessed Oct. 4, 2021). 16 FSA’s Feedback Center was launched in July 2016 in response to President Obama’s Student Aid Bill of Rights. See 

Memorandum on a Student Aid Bill of Rights to Help Ensure Affordable Student Loan Repayment, 2015 Daily Comp. Pres. Doc. 3 

(March 10, 2015), https://www.govinfo.gov/content/pkg/DCPD-201500165/pdf/DCPD-201500165.pdf.
Report of the Federal Student Aid Ombudsman

Fiscal Year 2021 Annual Report | Federal Student Aid 131

Figure 23: All Cases Received by Type 

Total Cases Received: 46,497

Each case type is categorized and subcategorized by issue, based on the provided narrative. 

Currently, the Feedback Center maintains nearly two dozen categories and nearly 100 

subcategories.

This section of the report discusses trends and themes seen in case data, including those seen 

in cases submitted about schools and servicing practices. This section also reviews the specific 

issues faced by service members and their dependents, pursuant to the 2012 Principles of 

Excellence (POE).17 Finally, this section reviews timely issues in borrower complaints, including 

issues related to the COVID-19 pandemic. 

17 Executive Order 13607, 3 C.F.R. § 13607, Establishing Principles of Excellence for Educational Institutions Serving Service 

Members, Veterans, Spouses, and Other Family Members (April 27, 2021). 
Report of the Federal Student Aid Ombudsman

132 Fiscal Year 2021 Annual Report | Federal Student Aid

Table 60: All Case Types by Category

Complaint 41,489

Applying for Student Aid (FAFSA) 9,224

Credit Reporting 1,168

Disbursing Student Financial Aid 2,289

Public Service Loan Forgiveness (PSLF) Program 2,045

Repaying Student Financial Aid 12,817

Repaying Student Financial Aid - In Default 446

School 7,667

Student Eligibility 1,955

U.S. Department of Education Customer Support 3,878

General Inquiry 1,157

Applying for Student Aid (FAFSA) 245

Credit Reporting 4 

Disbursing Student Financial Aid 125

Public Service Loan Forgiveness (PSLF) Program 32

Repaying Student Financial Aid 456

Repaying Student Financial Aid - In Default 55

School 87

Student Eligibility 51

U.S. Department of Education Customer Support 102

Positive Feedback 614

My Collection Agency 10

My Customer Service Experience 403

My School 49

My Servicer 22

U.S. Department of Education Web Site, Application, or Service 130

Research 425

Applying for Student Aid (FAFSA) 3 

Credit Reporting 26

Disbursing Student Financial Aid 2 

Public Service Loan Forgiveness (PSLF) Program 8 

Repaying Student Financial Aid 328

Repaying Student Financial Aid - In Default 17

School 21

Student Eligibility 17

U.S. Department of Education Customer Support 3 

Suspicious Activity 2,812

Allegation of Identity Theft 215

Allegation of Misuse of ED Resources 359

Allegation of Misuse of FSA ID 155

Allegation of Misuse of FSA Intellectual Property or Claim of an ED Affiliation 2,019

Allegation of Whistleblower 64

Grand Total 46,497
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Demographics of Complaint Submissions

As shown in the previous section, complaints comprise the vast majority of cases received by 

FSA. Students and student loan borrowers at every stage of repayment submit complaints to 

FSA. The following data represents select demographic information of students and student 

loan borrowers who submitted complaints between Oct. 1, 2020 and Aug. 31, 2021.18 

Figure 24: Age and Federal Student Loan Debt Balance of Identified Complainants 

(October 2020 – August 2021)19

School-related Cases

During FY 2021, FSA received 7,775 cases related to schools. These submissions cover a wide 

range of issues, from complaints about schools withholding transcripts to students being unable 

to complete their courses due to COVID-19. Borrowers also submitted complaints about FSA’s 

process for handling loan discharges when there is proof a student was misled or defrauded by 

their school. 

18 This data is matched through FSA’s EDWA. Matched data is limited to certain available demographic information available in the 

EDWA system and therefore may not represent the entirety of complaints submitted. Additionally, due to scheduling of EDWA data 

updates, matched data spans only 11 months of the fiscal year. 

19 Due to rounding, percentages may total more than 100%. 
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Figure 25: School-related Cases by Subcategory20

Students submitted complaints describing how their transcripts were withheld due to 

outstanding debts owed to schools, thereby preventing students from reenrolling to 

finish their degrees. When a student owes an outstanding debt directly to a school, that school 

may choose to withhold the student’s transcript as a debt collection tool. Students complained 

that this collection practice has the adverse effect of preventing them from getting a job or 

completing their degree. In some instances, students report following all the necessary 

processes to take a leave of absence from school, only to find the school failed to process the 

leave paperwork. As a result, students are not properly removed from their courses and are 

unable to return to school or transfer institutions without paying past due tuition fees, which can 

pose a barrier to students who depend on federal financial aid to afford school. 

Borrowers submitted complaints describing errors in the handling of their loan 

discharges after being approved for discharge based on schools’ conduct. When 

borrowers pursue specific loan discharge protections, including borrower defense, closed school 

discharge, or false certification discharge, they report waiting months or years to receive a 

decision. Borrowers complained that this process lacks transparency, particularly when they are 

not given an estimated timeline for which their application will be processed. For example, an 

FSA customer service representative described the following interaction with a borrower 

pursuing discharge:

Customer stated that he has been trying to get approved for the Borrower Defense 

to Repayment discharge, but the process has taken far too long. He stated that he 

20 “Other” includes the following subcategories: school owes me money (4.27%); release of transcript (3.72%), school quality of 

education (3.6%), school closures (3.07%), grant repayment due to withdrawal or overpayment (2.43%), loan repayment due to 

withdrawal or overpayment (1.52%), misrepresentation (0.85%), accreditation (0.84%), grades (0.68%), change in degree 

plan/requirements (0.57%), transfer credits to new school (0.53%), school participation in federal student aid programs (0.5%), 

PLUS disbursement process (0.48%), FSEOG, Work-Study, and/or Perkins process (0.36%), military and veteran benefits (0.32%), 

school recruiting and/or marking practices (0.24%), distance education (0.14%), TEACH grant eligibility (0.09%), and postgraduate 

job opportunities (0.08%). 
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submitted his first application that was in the Borrower Defense Department for 

over 200 days. He contacted their office back and they advised that he submit a 

new application, this time by email, as the last one was by mail. He stated it has 

now been another 193 days, and they have not approved or denied, or even 

reviewed his submission. He stated that he was beginning to get really 

discouraged.

After receiving notification that their application for discharge is approved, borrowers complain 

that not all eligible loans are discharged. For example, a borrower who consolidated the loans 

taken out to attend ITT Tech found that only the subsidized portion of his consolidation loan was 

discharged. When these errors occur, borrowers report being advised to reapply for discharge. 

Borrowers expressed frustration at being advised to reapply, given that they had already waited 

months or years to have their application reviewed the first time. 

Servicing-related Complaints

During the entirety of FY 2021, borrowers with Department-held loans had payments suspended 

and interest rates reduced to 0%, pursuant to the extension of CARES Act protections. 

However, despite not being required to make payments, FSA continued to receive complaints 

from borrowers related to the servicing of their loans. During FY 2021, FSA received 14,748 

cases related to servicing. These submissions describe a myriad of issues related to servicing 

practices, including when pursuing PSLF and in accessing affordable repayment options. 

Figure 26: Servicer Case Volume and Loan Portfolio Comparison

 
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Figure 27: Servicing-related Cases by Subcategory21

Borrowers complain about delays when pursuing PSLF. During the fiscal year, FSA 

received more than 2,000 complaints related to every aspect of the PSLF program. For 

example, borrowers described facings months-long delays when seeking to determine the 

eligibility of their employer. Borrowers also describe having to wait nearly a year to receive an 

update on the number of qualified payments made, particularly where they are disputing the 

eligibility of a specific month’s payment status. In one complaint, a borrower stated:

I have been waiting since November 2019 to hear a response from my loan 

servicer . . . regarding confirmation of student loan payments towards the required 

120 PSLF payments. Every month since November 2019, I have called and written 

. . . to verify approval for student loan payments made. . . . As of [October 2020], 

they still have the same response, ‘Under Review.’ 

Borrowers report receiving conflicting information about whether their loans were 

forgiven under TEPSLF. Under TEPSLF, borrowers can receive PSLF credit for payments 

while in a non-qualifying repayment plan.22 This expansion of the PSLF program sought to 

correct well-documented breakdowns where borrowers were misled about the eligibility of 

21 “Other” includes the following subcategories: loan payment amount (4.45%), adverse reporting by current servicer (4.15%), loan 

consolidation (3.18%), loan forbearance or deferment (3.13%), PSLF applications (3.03%), borrower defense to repayment loan 

forgiveness (2.55%), allegations of incorrect credit reporting (2.18%), third-party debt relief (1.58%), total and permanent disability 

discharge (1.34%), Treasury Offset Program (1.29%), collection practices (0.98%), loan capitalized interest (0.97%), loan interest 

rates (0.94%), Direct Loan eligibility (0.9%), employment certification form (0.71%), wage garnishment (0.71%), adverse reporting 

by previous servicer (0.7%), qualifying employment or employer (0.66%), NSLDS database (0.66%), qualifying repayment plan 

(0.49%), collection fees (0.25%), loan fees (0.22%), TEACH grants (0.12%), default notation after rehabilitation (0.04%), and SCRA 

interest rates (0.01%). 

22 See U.S. Department of Education, FSA, Temporary Expanded Public Service Loan Forgiveness, 

https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loanforgiveness (last accessed Oct. 4, 2021). 
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certain repayment plans.23 However, complaints show that borrowers often receive conflicting 

information when pursuing TEPSLF, including after their loans are seemingly discharged. As 

one borrower describes: 

The whole process has been grueling. I first applied in April but wasn’t approved 

until August because two of my prior loan servicers . . . misclassified payments in 

various ways. It took a close investigation from one of the reps at [my current 

servicer] to finally identify the problem and fix it. Then it turned out I actually 

qualified for TEPSLF in November 2019. . . . I received a letter from [my servicer] 

detailing all of my payments and showing that I had met the qualifications for 

TEPSLF. . . . I received letters stating that my TEPSLF application was approved 

. . . [then] I received a letter stating that my TEPSLF application was not approved 

and ‘you do not qualify for loan forgiveness under TEPSLF.’ . . . It’s certainly 

unsettling to receive this latest letter, even if it was some kind of technical issue.

Borrowers with commercially held FFEL program loans in default submitted complaints 

describing how they did not receive adequate information about how to get out of 

default. Complaints received during FY 2021 shed light on how guaranty agencies may fail to 

facilitate protections that are available to borrowers under law. A borrower in default has a right 

to rehabilitate his or her loans to return to good standing.24 This process requires enrolling in a 

rehabilitation plan and making nine payments — a process that is facilitated by guaranty 

agencies when borrowers owe commercial FFEL program loans. However, borrowers complain 

that they often receive incorrect or conflicting information about how to enroll in a rehabilitation 

plan. Borrowers complain that when trying to enroll, guaranty agencies lose paperwork, 

miscalculate payments, or misapply payments, often resulting in a borrower remaining in default 

for longer than necessary.

Borrowers complained that they received inconsistent and inaccurate information about 

how to have a defaulted debt cured in CAIVRS, which often results in them missing out 

on options to pursue financial security. All defaulted federal student loans are reported to the 

Credit Alert Verification Reporting System (CAIVRS), a database operated by the Department of 

Housing and Urban Development that reflects all defaulted debt owed to the federal 

government. Unlike credit history, where a defaulted debt is only reported for seven years, 

CAIVRS records are maintained indefinitely until the debt is cured (returned to good standing). 

When consumers seek to take out a federally backed loans, such as a Department of Veterans 

Affairs (VA) mortgage or Federal Housing Administration (FHA) mortgage, CAIVRS is crossreferenced before the new loan can close. Where defaulted student loans are outstanding, a 

borrower will be denied additional government-backed loans — even if it is long after the debt is 

removed from the borrower’s credit history. 

Borrowers often report not learning of the CAIVRS hurdle until mere days before closing on their 

mortgage, leaving them scrambling for answers about how to cure their defaulted student loans. 

23 See, e.g., Consumer Financial Protection Bureau, Staying on track while giving back: The cost of student loan servicing 

breakdowns for people serving their communities (June 22, 2017), https://www.consumerfinance.gov/data-research/researchreports/staying-track-while-giving-back-cost-student-loan-servicing-breakdowns-people-serving-their-communities/. 24 See Consumer Financial Protection Bureau, Annual report of the CFPB Student Loan Ombudsman: Transition from default to an 

income-driven repayment plan (October 2016), 

https://files.consumerfinance.gov/f/documents/102016_cfpb_Transmittal_DFA_1035_Student_Loan_Ombudsman_Report.p

df. 
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Borrowers complain that they receive conflicting information from private collection agencies 

and FSA’s Default Resolution Group about how to clear the CAIVRS reporting. 

This hurdle is exacerbated by servicing breakdowns which may result in a borrower not 

receiving ongoing communication about his or her defaulted loan. For example, in one case 

handled by the Ombudsman, it was determined that a system error at FSA’s contracted 

bankruptcy servicer resulted in the account not being returned to collections after the borrower’s 

bankruptcy was discharged. As a result, the borrower did not receive any communications about 

his loan for many years. It was not until the borrower sought to secure a VA home loan that he 

was alerted to the outstanding debt — mere days before he was scheduled to close on his 

home.

Servicemember-related Cases

When borrowers submit complaints through the Feedback System, they have the option to selfidentify as an active-duty member of the military, veteran, or dependent of a service member. If 

a borrower self-identifies in this category, he or she is asked to provide how much tuition was 

paid out of pocket and how much was paid through government benefits (e.g., G.I. Bill). The 

borrower is also asked to provide other demographic information, such as branch of service and 

level of study.25 

During FY 2021, FSA received 753 cases from service members. The following data provides 

an overview of the categories of cases submitted by service members and their dependents 

during the fiscal year. 

Figure 28: Service member-related Cases by Category 

25 FSA collects this information to ensure continued support of Executive Order 13607, signed in April 2012, which established the 

POE for Educational Institutions Servicing Service Members, Veterans, Spouses, and Other Family Members. 
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I attended Heald Business College, a Corinthian College outfit. I only attended for 

1 year and a half. I was told my GI Bill would cover all cost. That was only the 

beginning of my problems. During recruiting efforts I was lied to and misled into 

job placing. This led to my entire GI Bill being drained for my living expenses since 

I could not afford Heald. What was supposed to be a Business program that cost 

10k has ballooned to a 40k student loan debt with Navient. I only attended a low 

income business college for 1 year and a half and I am 40k in debt.

COVID-19 Cases

In March 2020, the coronavirus pandemic hit the United States and Congress took 

unprecedented action to mitigate the financial fallout, including pausing payments and reducing 

interest rates for all Department-held student loans.26 Throughout the past several months, 

policymakers took additional actions to curb the burden of student debt during the economic 

recovery from the pandemic. However, FSA continues to receive complaints from borrowers 

who have struggled to access the protections offered during the pandemic. 

Figure 29: COVID-19-related Cases by Month

Complaints show that borrowers with commercially held federal student loans struggled 

to access relief during the pandemic. While policymakers took repeated action to provide 

relief for Department-held loans, borrowers with commercially held FFEL program loans 

complained that they struggled to access relief, even where certain relief options were 

guaranteed by law. Borrowers complained that FFEL servicers failed to tell them they could 

consolidate their FFEL program loans into a Direct consolidation loan in order to gain access to 

the full suite of protections offered to the vast majority of federal student loan borrowers during

the pandemic. 

26 COVID-19 related cases are identified by revieing the description and desired outcome fields for key words, including “COVID,” 

“virus,” and “CARES Act.” Additionally, agents may identify the case as related to COVID-19 upon intake. 
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In March 2021, the Department announced that guaranty agencies must suspend involuntary 

collection of payments against defaulted borrowers.27 Despite this directive, borrowers with 

defaulted commercially held FFEL program loans complained that garnishments continued. For 

example, one borrower who submitted a complaint in August 2021 described the financial 

distress she faced from the continued garnishment:

I would like to find out how to get a refund . . . on the wage garnishments that have 

been taken out of my paycheck. It is almost $6,000. . . . I understand they should 

not be taking these funds and I would like them back. It was hard to live before 

they started taking about $700-$800 a month out of my paycheck. 

Third-party Debt Relief

FSA continues to receive complaints about TPDR companies — private companies that provide 

(or claim to provide) student loan management services for a fee. Some of the services they 

charge for, such as loan consolidation, can be managed by the borrowers themselves or by 

FSA contractors at no cost.28 Additionally, many TPDR companies make deceptive promises 

about loan forgiveness, misrepresent any affiliation with the federal government, or otherwise 

mislead borrowers about the services the company will provide. 

Case data shows an increase in the number of borrowers contacting FSA regarding TPDR 

companies, many of whom do not realize that they have been defrauded until after they have 

paid large sums of money to these companies. During FY 2021, FSA received 3,081 complaints 

about TPDR companies. Complaints demonstrate that TPDR companies aggressively contact 

borrowers via social media, phone calls, emails, and text messages. These companies often 

demand large sums of money upfront and request borrowers’ FSA ID and login information. 

After securing this information, TPDR companies often change the borrower’s FSA login 

information, resulting in the borrower not being advised about any changes to their loan status. 

TPDR companies also encourage borrowers to disregard any correspondence from their 

servicer. Borrowers complain that after questioning the company’s legitimacy, they can be 

threatened, and companies may obtain and use borrowers’ financial information without their 

consent. 

FSA categorizes cases about TPDR generally as Suspicious Activity/Allegation of Misuse of 

FSA Intellectual Property or Claim of a Department Affiliation. The following data represents an 

increase in TPDR-related complaints during the fiscal year — a notable trend given the ongoing 

payment pause for most federal student loan borrowers.

27 See U.S. Department of Education, Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to 

Additional Federal Student Loans in Default (March 30, 2021), https://www.ed.gov/news/press-releases/department-educationannounces-expansion-covid-19-emergency-flexibilities-additional-federal-student-loans-default; see also U.S. Department of 

Education, Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies, GEN-21-03 

(May 12, 2021, updated May 24, 2021), https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-

12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021#. 28 See U.S. Department of Education, FSA, Avoiding Student Aid Scams, https://studentaid.gov/resources/scams (last accessed 

Oct. 7, 2021). 
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Figure 30: Monthly TPDR-related Cases

During FY 2022, the Ombudsman Group will increase interagency collaboration to cover the 

waterfront in cracking down on illegitimate TPDR companies. FSA is working to promote 

referrals to state and federal agencies with enforcement authority to pursue bad actors.29

Activities of the Ombudsman

Pursuant to the HEA, the Ombudsman is required to describe the activities and evaluate the 

effectiveness of the position during the fiscal year. Additionally, FSA is required to disseminate 

information about the availability and functions of the Ombudsman to external stakeholders. 

During FY 2021, the Ombudsman worked to increase visibility and engagement with states, 

community groups, and individual borrowers. 

Escalated Complaint Handling

While FSA receives tens of thousands of complaints per year, only certain escalated complaints 

are handled by the Ombudsman Group. These Ombudsman Group cases include escalated 

complaints pertaining to servicing and collections and certain cases that are referred as 

disputes. During FY 2021, the Ombudsman Group handled 823 cases about a wide variety of 

issues, including credit reporting, loan forgiveness, and loan accuracy. 

29 See also Federal Trade Commission, FTC, State Law Enforcement Partners Announce Nationwide Crackdown on Student Loan 

Debt Relief Scams (Oct. 13, 2017), https://www.ftc.gov/news-events/press-releases/2017/10/ftc-state-law-enforcementpartners-announce-nationwide-crackdown.
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Figure 31: Dispute and Escalated Cases by Subcategory

For example, in one case handled by the Ombudsman Group, a borrower with a spousal 

consolidation loan became totally and permanently disabled. After pursuing a total and 

permanently disability discharge, 50% of the loan balance was discharged. However, the 

borrower’s portion of the underlying loans represented significantly more than 50% of the 

consolidation loan. Upon investigation by the Ombudsman Group, it was determined that the 

borrower was entitled to have an additional $64,000 discharged. 

In another case handled by the Ombudsman Group, a borrower had two of her four loans 

forgiven under TEPSLF and was entitled to a refund of all additional payments made after she 

became eligible for forgiveness. However, these additional payments were reapplied to her 

remaining loans, despite the fact that the remaining loans were also eligible for forgiveness. The 

borrower repeatedly sought a refund of these additional payments but struggled to secure her 

refund directly from the servicer. The Ombudsman Group was able to secure a refund of the 

overpayments and expedite review of her remaining loans under TEPSLF. 

Partnering to Protect Borrowers

FY 2021 saw a notable increase in efforts to collaborate with state and federal partners to cover 

the waterfront in rooting out harm to student loan borrowers.30 A range of borrower protections 

exist under federal and state law that do not fall under the Department’s purview.31 Therefore, it 

is only through collaborative efforts with regulators at all levels of government that FSA can 

effectuate a safer market for student loan borrowers. 

To date, more than a dozen states have laws in place that provide affirmative protections for 

borrowers. Additionally, several states have dedicated student loan ombudsmen.32 These state 

30 See, e.g., Richard Cordray, Revised guidance to FSA vendors on outside requests for Department records and data, U.S. 

Department of Education, FSA (May 28, 2021), https://www2.ed.gov/policy/fund/guid/revised-vendor-guidance-fsa.pdf. 31 See, e.g., The Fair Credit Reporting Act, 15 U.S.C. § 1681; Servicemember Civil Relief Act, 50 U.S.C. § 527; Cal. A.B. 376 

(2020).

32 Some states refer to these positions as “student loan advocate” or other similar terms, but these positions share similar statutory 

mandates to assist residents with issues related to student loans. 
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officials are critical partners to FSA, including the Ombudsman, and help identify breakdowns in 

the delivery of Title IV programs and protections.33

During FY 2021, the Ombudsman Group handled several complaints referred by state 

ombudsmen. These complaints covered a variety of issues, including third-party debt relief 

scams, repayment relief for commercial FFEL Program loans during the COVID-19 pandemic, 

and qualifying for TEPSLF. State ombudsmen also expressed frustration when seeking to 

navigate the process for sharing borrower information covered under the Privacy Act. The FSA 

Ombudsman is currently working with other FSA business units to develop means by which 

state officials can access the NSLDS® database, similar to the functionality offered to college 

financial aid officers. 

In FY 2022, the Ombudsman will kick off efforts to convene state ombudsmen for ongoing 

roundtable discussions, with a particular emphasis on promoting coordinated outreach and 

oversight during Return to Repayment. 

External Stakeholder Engagement

During the fourth quarter of FY 2021, the Ombudsman began a new initiative designed to build 

relationships within communities and promote the Ombudsman Group as a trusted resource for 

students and borrowers. The Ombudsman met with a variety of stakeholders, including 

community groups, legal aid and other direct service providers, national advocacy 

organizations, civil rights groups, labor unions, and organizations representing servicemembers 

and veterans. Each constituency offered a unique perspective on the challenges borrowers face 

when seeking to navigate student loan repayment, including when trying to access certain rights 

and protections guaranteed under federal law. 

For example, legal aid providers discussed the problems borrowers face when seeking to end 

administrative wage garnishment. These providers noted that this involuntary collection process 

seizes more money than borrowers would be required to pay under some income-driven 

repayment plans, and the fallout of the system bears down disproportionately on low-income 

borrowers and borrowers of color.34 Legal aid providers described the breakdowns their clients 

face when seeking hearings to suspend garnishment, stemming from a seemingly arbitrary 

decision-making process and little oversight of contractors conducting the hearing process. 

Consumer advocates expressed concerns about the impending return to repayment, describing 

how the pandemic exposed systemic issues in the federal student loan market, such as 

inconsistent practices among servicers and incomplete information about available protections 

from customer service representatives. Advocates called for more robust oversight of student 

loan servicers and collectors, more accountability for vendors, and more coordination between 

FSA and federal and state law enforcement agencies. Consumer advocates also called for 

building out an “on-ramp” for returning to repayment to allow borrowers to transition back to 

making payments without the risk of a payment cliff if they cannot immediately enroll in an 

affordable repayment plan. 

33 See also Letter from Richard Cordray to the Virginia State Corporation Commission, BFI-2021-00007 (Aug. 16, 2021), 

https://scc.virginia.gov/docketsearch/DOCS/5g8j01!.PDF. 34 See Deanne Loonin, Illusory Due Process: The Broken Student Loan Hearing System, 11 U.C. Irvine L. Rev. 173 (2020), 

https://scholarship.law.uci.edu/cgi/viewcontent.cgi?article=1467&context=ucilr. 
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In FY 2022, the Ombudsman will continue building out relationships with stakeholders across 

the country, with an emphasis on providing streamlined support for student loan borrowers 

during the return to repayment transition. Additionally, the Ombudsman will further solicit 

feedback about the effectiveness Title IV programs to share with FSA leadership and inform 

recommendations. 

Direct Borrower Engagement 

During the fourth quarter of FY 2021, the Ombudsman began efforts to improve borrowers’ 

customer experience around the referral of complaints. Historically, borrowers have expressed 

frustration around being shuffled between offices within FSA and across other federal agencies. 

Borrowers lamented having to reexplain their issue each time they spoke to a new point of 

contact, further exacerbating their dissatisfaction with their Title IV program experience. In 

response to this frustration, the Ombudsman Group is prioritizing back-end coordination within 

FSA and among federal and state agencies that receive borrower complaints. Under this 

approach, the Ombudsman Group will coordinate directly with stakeholders that receive 

borrower complaints and work to resolve the complaint without the borrower having to submit 

the same concern across multiple agencies. 

Additionally, the Ombudsman is working with other offices within FSA to build out a direct-toborrower information campaign promoting awareness of the availability of the Ombudsman. The 

goal of this campaign will be to explain to borrowers the purpose of the Ombudsman Group and 

promote channels through which borrowers can reach out if they experience problems with their 

Title IV aid. 

Ombudsman Recommendations

The following recommendations are made by the Ombudsman in accordance with the authority 

provided under the HEA and informed by thousands of borrower complaints received throughout 

the year. 

The Department should reevaluate the financial sustainability of the FFEL program and 

recall the entirety of the defaulted FFEL portfolio. The dwindling FFEL program is becoming 

increasingly unsustainable, with contraction exacerbated by limited repayment protections and 

questionable servicing practices.35 As discussed, the pandemic has shed light on the disparities 

in repayment faced by borrowers with commercial FFEL program loans, as compared to Direct 

Loan borrowers, particularly when borrowers’ loans are in default. Under law, the Secretary 

retains the authority to recall from a guaranty agency any loan where “the federal fiscal interest 

so requires.”36 Complaints received throughout the fiscal year demonstrate that guaranty 

agencies are ill-equipped to act in the best interest of the borrower.37 In fact, as previously 

described, the largest guaranty agencies have aggravated the financial distress of the most 

vulnerable borrowers during the pandemic by continuing to garnish wages. Accordingly, the 

35 See, e.g., Consumer Financial Protection Bureau, Supervisory Highlights COVID-19 Prioritized Assessments Special Edition, 

Issue. 23, Winter 2021 (January 2021), https://files.consumerfinance.gov/f/documents/cfpb_supervisory-highlights_issue23_2021-01.pdf. 36 20 U.S.C. § 1078(c)(8).

37 See also Petition to Enforce Civil Investigative Demand and Supporting Memorandum, Consumer Financial Protection Bureau v. 

Educational Credit Management Corporation. (0:21-mc-00019) (Mar. 4, 2021) (alleging that ECMC kept borrowers in default for at 

least 65 days before providing borrowers with options to cure the default in an effort to maximize collection fees). 
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Report of the Federal Student Aid Ombudsman

Department should rescind all defaulted commercial FFEL program loans to ensure borrowers 

are able to access critical repayment protections. 

Policymakers should extend PSLF protections to borrowers enrolled in alternative 

repayment plans. For years, law enforcement officials, regulators, and advocates have 

documented the widespread issues with the PSLF program. For example, at the beginning of 

FY 2022, the Department took action to provide PSLF protections to the borrowers working in 

public service who had been disproportionately affected by the pandemic, many of whom may 

not have been properly advised by their servicer about how to get on track for loan 

forgiveness.38To address these issues, policymakers have occasionally intervened to expand 

relief for borrowers by waiving certain requirements of the program. These interventions, while 

necessary, are time limited, and therefore may not be available to all borrowers who have been 

harmed by poor servicing practices.39 

Complaints show that servicers have historically enrolled borrowers into alternative repayment 

plans without disclosing that these plans are ineligible for PSLF. In many instances, borrowers 

under these plans pay more than they would otherwise pay under a standard plan or an incomedriven repayment plan — both of which are qualified repayment plans under the PSLF program. 

Since October 2017, more than 20,000 borrowers have been denied TEPSLF because some 

numbers of payments were made under an ineligible repayment plan.40 

Congress should consider expanding PSLF-eligible repayment plans to include alternative 

repayment plans to better effectuate the intent of the program and provide relief to borrowers 

who made payments while serving their communities. 

The Department should limit CAIVRS reporting after seven years of furnishing. As 

previously discussed, FSA requires vendors to report defaulted student loan borrowers to 

CAIVRS—a database of all defaulted debt owed to the federal government. Complaints show 

that CAIVRS often serves to resurrect debts long after traditional credit bureaus stop reporting, 

and long after any private market debt would have been written off. This practice 

disproportionately affects historically marginalized consumers — the very people intended to 

benefit from federally backed mortgages. In effect, CAIVRS ensures leverage to collect on 

defaulted debts owed by the most financially vulnerable borrowers.41 CAIVRS remains in the 

arsenal of extraordinary collection tools of the federal government, which also includes no 

statute of limitations for wage garnishment or tax offsets. As the Department works to close the 

38 See U.S. Department of Education, U.S. Department of Education Announces Transformational Changes to the Public Service 

Loan Forgiveness Program, Will Put Over 550,000 Public Service Workers Closer to Loan Forgiveness (Oct. 6, 2021), 

https://www.ed.gov/news/press-releases/us-department-education-announces-transformational-changes-public-serviceloan-forgiveness-program-will-put-over-550000-public-service-workers-closer-loan-forgiveness; see also Temporary 

Expanded Public Service Loan Forgiveness, Consolidated Appropriations Act of 2018. 

38 The FY 2021 expansion of PSLF eligibility is available through October 2022. TEPSLF is available until allotted funds are 

exhausted. 

39 The FY 2021 expansion of PSLF eligibility is available through October 2022. TEPSLF is available until allotted funds are 

exhausted. 

40 Alternative repayment, which collectively includes Alternative Fixed Payment, Alternative Fixed Term, Alternative Graduated, and 

Alternative Negative Amortization, is an ineligible repayment plan under TEPSLF. 

41 Consumers of federally backed mortgages — for which the underwriting process triggers the review of CAIVRS—are more likely 

to be consumers of color, have smaller down payments, and have higher debt-to-income ratios than consumers of conventional 

mortgages. See Consumer Financial Protection Bureau, Data Point: 2019 Mortgage Market Activity and Trends (June 2020), 

https://files.consumerfinance.gov/f/documents/cfpb_2019-mortgage-market-activity-trends_report.pdf. 
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disparities among defaulted borrowers, it should also consider limiting CAIVRS reporting to align 

with industry-standard furnishing practices and cease reporting, for instance, after seven years.
Fiscal Year 2021 Annual Report | Federal Student Aid 147

Financial Section

 

Financial Section
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Financial Section

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Fiscal Year 2021 Annual Report | Federal Student Aid 149

Overview of the Financial Section

Overview of the Financial Section

This section provides a financial presentation of FSA’s stewardship and accountability for its 

resources. The audited financial statements are followed by the accompanying notes to the 

financial statements, required supplementary information, and the Independent Auditors’ 

Report. The subsections are listed and briefly discussed below: 

• Financial Statements: The Financial Statements consist of the following comparative 

statements: Balance Sheet, Statement of Net Cost, Statement of Changes in Net 

Position and Statement of Budgetary Resources.

• Notes to the Financial Statements: The Notes to the Financial Statements provide a 

description of significant accounting policies and detailed information on select financial 

statement line items. The Notes also include information that supports the computation 

of the various financial statement activities.

• Required Supplementary Information (Unaudited): The unaudited Required 

Supplementary Information presents the Combining Statements of Budgetary Resources 

by Program.

• Independent Auditors’ Report: The Independent Auditors’ Report presents the 

combined audit report issued by the Independent Auditors. Included in the combined 

audit report are the Report on the Financial Statements, the Report on Internal Control, 

and the Report on Compliance and Other Matters. The subsection also includes the 

Office of Inspector General Audit Transmittal Letter, Management’s Response to the 

Audit, and the Auditors’ Response to Management’s Response.
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Financial Statements

Financial Statements

FSA prepares the following statements: the Consolidated Balance Sheets, the Consolidated 

Statements of Net Cost, the Consolidated Statements of Changes in Net Position, and the 

Combining Statements of Budgetary Resources. These statements are prepared pursuant to 

the requirements of the Chief Financial Officers Act of 1990, the Government Management 

Reform Act, and OMB Circular A-136; and demonstrate FSA’s accountability and stewardship of 

the resources entrusted to it. 

Below is a brief description of the principal financial statements included in this section: 

• Consolidated Balance Sheets: The Consolidated Balance Sheets present, as of a 

specific time, the amount of resources FSA has to use or distribute (assets), the 

amounts owed by FSA (liabilities) and the difference between the two (net position).

• Consolidated Statements of Net Cost: The Consolidated Statements of Net Cost 

present the annual cost of agency operations. The gross cost less any offsetting revenue 

is used to determine the net cost.

• Consolidated Statements of Changes in Net Position: The Consolidated Statements 

of Changes in Net Position report the accounting activities, including changes to 

Cumulative Results of Operations and Unexpended Appropriations that caused the 

change in net position during the reporting period.

• Combining Statements of Budgetary Resources: The Combining Statements of 

Budgetary Resources report the budgetary resources that were made available to FSA, 

the status of those resources at fiscal year-end, along with the outlays of budgetary 

resources. 
Bala 

Fiscal Year 2021 Annual Report | Federal Student Aid 151

Financial Statements

Consolidated Balance Sheets 

 
152 Fiscal Year 2021 Annual Report | Federal Student Aid

Financial Statements

Consolidated Statements of Net Cost
Fiscal Year 2021 Annual Report | Federal Student Aid 153

Financial Statements

Consolidated Statements of Changes in Net Position

 
154 Fiscal Year 2021 Annual Report | Federal Student Aid

Financial Statements

Combined Statements of Budgetary Resources

 
Fiscal Year 2021 Annual Report | Federal Student Aid 155

Notes to the Financial Statements

Notes to the Financial Statements

Note 1. Summary of Significant Accounting Policies

Note 2. Non-entity Assets

Note 3. Fund Balance with Treasury

Note 4. Other Assets

Note 5. Loan Receivables, Net and Loan Guarantee Liabilities

Note 6. Liabilities Not Covered by Budgetary Resources

Note 7. Debt Associated with Loans

Note 8. Subsidy Due to Treasury General Fund

Note 9. Other Liabilities

Note 10. Net Cost 

Note 11. COVID-19 Activity 

Note 12. Statements of Budgetary Resources

Note 13. Reconciliation of Net Cost to Net Outlays

Note 14. Commitments and Contingencies

Note 15. Subsequent Event
156 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Notes to the Financial Statements for the Years 

Ended, September 30, 2021 and 2020

Note 1. Summary of Significant Accounting Policies

Reporting Entity and Programs

Federal Student Aid (FSA) was created as a Performance Based Organization (PBO) within the 

U.S. Department of Education (the Department) in 1998, as a result of amendments to the 

Higher Education Act of 1965 (HEA), from previously existing Department student financial 

assistance program offices. FSA operates under the PBO mandate to develop a management 

structure driven by strong incentives to manage for results. FSA’s primary goal is to assist 

lower-income and middle-income students in overcoming the financial barriers that make it 

difficult to attend and complete postsecondary education.

FSA is a component of the U.S. Government. For this reason, some of the assets and liabilities 

reported by FSA may be eliminated for government-wide reporting. These financial statements 

should be read with the realization that they are for a component of the U.S. Government.

Federal Student Loan Programs. FSA and the Department administer the William D. Ford 

Federal Direct Loan (Direct Loan) Program, the Federal Family Education Loan (FFEL) 

Program, the Health Education Assistance Loan program (HEAL), and the Federal Perkins Loan 

program to help students and their families finance the costs of postsecondary education. A 

Direct Loan is any debt instrument issued to the public by the federal government. A FFEL loan 

guarantee is a guarantee, insurance, or other pledge with respect to the payment of all or part of 

the principal or interest on any debt obligation of a non-federal borrower to a non-federal lender.

The Direct Loan Program, added to the HEA in 1993 by the Student Loan Reform Act of 1993, 

authorizes FSA to make loans through participating schools to eligible undergraduate and 

graduate students and their parents. The Direct Loan Program offers four types of loans: 

Stafford, Unsubsidized Stafford, Parent Loan for Undergraduate Students (PLUS), and 

Consolidation. Evidence of financial need is required for an undergraduate student to receive a 

subsidized Stafford loan. The other three loan programs are available to borrowers at all income 

levels. Loans can be used only to meet qualified educational expenses.

The FFEL Program, authorized by the HEA, operates through state and private nonprofit 

guaranty agencies that provide loan guarantees on loans made by private lenders to eligible 

students. The SAFRA Act, which was included in the Health Care and Education Reconciliation 

Act of 2010 (HCERA), stated that no new FFEL loans would be made effective July 1, 2010. 

FFEL Program receivables include defaulted FFEL loans and acquired FFEL loans. Acquired 

FFEL loans include student loan assets acquired using temporary authority provided in the 

Ensuring Continued Access to Student Loans Act of 2008 (ECASLA). ECASLA gave FSA 

temporary authority to purchase FFEL loans and participation interests in those loans. FSA 

implemented three activities under this authority: loan purchase commitments; purchases of 

loan participation interests; and a put, or forward purchase commitment, with an Asset-Backed 

Commercial Paper (ABCP) Conduit. This authority expired after September 30, 2010; as a

result, loan purchase commitments and purchases of loan participation interests concluded. 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 157

Notes to the Financial Statements

However, under the terms of the Put Agreement with the conduit, ABCP Conduit activity ceased 

operations in January 2014. (See Notes 5 and 10)

Grant Programs. FSA and the Department manage numerous grant programs, which provide 

financial aid, that in most cases does not need to be repaid to students with financial need. The 

largest of these programs is the Federal Pell Grant (Pell Grant) program, which provides needbased grants to low-income undergraduate and certain post baccalaureate students that 

promotes access to postsecondary education. Other grant programs include Federal WorkStudy Program, Federal Supplemental Educational Opportunity Grants (FSEOG), Teacher 

Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and 

Afghanistan Service grants. (See Note 10)

COVID-19. COVID-19 relief legislation and administrative actions provided support for student 

loan borrowers primarily by suspending nearly all federal loan payments until January 31, 2022, 

interest free. FSA also stopped all federal wage garnishments and collection actions for 

borrowers with federally held loans in default. Funding for the student loan repayment was 

provided through indefinite appropriations. (See Notes 5 and 11)

Other regulatory flexibilities and incentives provided to help students through COVID-19 include:

• Federal Supplemental Educational Opportunity Grants to provide emergency aid to 

students.

• Work-study payments, which will continue even if students can no longer work on-site.

• Pell Grants, financial aid, and loans originated for the spring 2020 term, which students 

who have had to leave college campuses will not have to pay back. Moreover, none of 

this aidwill count against students’ financial aid lifetime limits.

• Waiving satisfactory academic progress requirements to help ensure that students do 

not lose academic standing and the ability to receive federal financial student aid.

• Tax credits that incentivize employers to help pay for student loans.

Basis of Accounting and Presentation

These financial statements were prepared to report the financial position, net cost of operations, 

changes in net position, and budgetary resources of FSA as required by the Chief Financial 

Officers Act of 1990 and the Government Management Reform Act of 1994. The financial 

statements were prepared from the books and records of the Department and FSA, in 

accordance with Generally Accepted Accounting Principles (GAAP) accepted in the United 

States for federal entities, issued by the Federal Accounting Standards Advisory Board 

(FASAB), and the Office of Management and Budget (OMB) Circular No. A-136, Financial 

Reporting Requirements, as revised. These financial statements are different from the financial 

reports prepared by the Department pursuant to OMB directives that are used to monitor and 

control FSA’s use of budgetary resources.

The accounting structure of federal agencies is designed to reflect both accrual and budgetary 

accounting transactions. Under the accrual method of accounting, revenues are recognized 

when earned and expenses are recognized when a liability is incurred, without regard to receipt 
158 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

or payment of cash. Budgetary accounting facilitates compliance with legal constraints and 

controls over the use of federal funds.

Transactions and balances among FSA funds have been eliminated from the consolidated 

financial statements.

Accounting standards require all reporting entities to disclose that accounting standard practices 

allow certain presentations and disclosures to be modified, if needed, to prevent the disclosure 

of classified information.

Accounting for Federal Credit Programs

FSA’s accounting for its loan and loan guarantees is based on the requirements of the Federal 

Credit Reform Act of 1990 (FCRA). The purpose of the FCRA is to record the lifetime subsidy 

cost of Direct Loans and loan guarantees, in present value terms, at the time the loan is 

disbursed (subsidy). Components of subsidy costs for loans and guarantees include defaults 

(net of recoveries); contractual payments to third-party, private loan collectors who receive a set 

percentage of amounts collected; and, as an offset, origination and other fees collected. For 

Direct Loans, the difference between interest rates incurred by FSA on its borrowings from the 

U.S. Department of Treasury (Treasury) and interest rates charged to particular borrowers is 

also subsidized (or may provide an offset to subsidy if FSA’s rate is less).

Under the FCRA, subsidy cost is estimated using the net present value of future cash flows to 

and from FSA. In accordance with the FCRA, credit programs either estimate a subsidy cost to 

the government (a “positive” subsidy), breakeven (zero subsidy cost), or estimate a negative 

subsidy cost. Negative subsidy occurs when the estimated cost of providing loans to borrowers 

from Treasury borrowing, collection costs and loan forgiveness is less than the value of 

collections from borrowers for interest and fees, in present value terms.

Subsidy cost is an estimate of the present value cost of providing Direct Loans but excludes the 

administrative costs of issuing and servicing the loans. FSA estimates subsidy expense using a 

set of econometric and financial models, as well as cash flow models.

FSA estimates subsidy costs annually for new loans disbursed in the current year; updates to 

the previous cost estimates for outstanding loans disbursed in prior years (subsidy reestimates); and updates to previous cost estimates based on new legislation or other 

government actions that change the terms of existing loans (loan modifications) that alter the 

estimated subsidy cost and the present value of outstanding loans. Loan modifications can also 

include modification adjustment gains and losses to account for the difference between the 

discount rate used to calculate the cost of the modification and the interest rate at which the 

cohort pays or earns interest.

The subsidy cost of Direct Loan and loan guarantee programs are budgeted and tracked by the 

fiscal year in which the loan award is made, or the funds committed. Such a grouping of loans or 

guarantees is referred to as a “cohort.” A cohort is a grouping of Direct Loans obligated or loan 

guarantees committed by a program in the same year even if disbursements occur in 

subsequent years.

In order to account for the change in the net present value of the loan portfolio over time, the 

subsidy cost is amortized each year. Amortization accounts for the differences in interest rates,
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 159

Notes to the Financial Statements

accruals, and cash flows over the life of a cohort, ensuring that cost is reflected in subsidy 

estimates and re-estimates. Amortization of subsidy is calculated as the difference between 

interest received from borrowers and Treasury (on uninvested funds) and interest paid to 

Treasury on borrowings.

The FCRA establishes the use of financing, program, and Treasury General Fund receipt 

accounts for loan guarantees committed and Direct Loans obligated after September 30, 1991.

• Financing accounts borrow funds from Treasury, make Direct Loan disbursements, 

collect fees from lenders and borrowers, pay claims on guaranteed loans, collect 

principal and interest from borrowers, earn interest from Treasury on any uninvested 

funds, and transfer excess subsidy to Treasury General Fund receipt accounts. 

Financing accounts are presented separately in the combined statements of budgetary 

resources (SBR) as non-budgetary credit reform accounts to allow for a clear distinction 

from all other budgetary accounts. This facilitates reconciliation of the SBR to the Budget 

of the United States Government.

• Program accounts receive and obligate appropriations to cover the positive subsidy cost 

of a Direct Loan or loan guarantee when the loan is approved and disburses the subsidy 

cost to the financing account when the loan is issued. Program accounts also receive 

appropriations for administrative expenses.

• Treasury General Fund receipt accounts receive amounts paid from financing accounts 

when there are negative subsidies for new loan disbursements or downward reestimates of the subsidy cost of existing loans. (See Notes 12 and 13)

FSA records an obligation each year for Direct Loan awards to be made in a fiscal year based 

on estimates of schools’ receipt of aid applications. FSA advances funds to schools based on 

these estimates. Promissory notes are signed when schools reach individual agreements with 

borrowers and the schools subsequently report each disbursement of advanced funds to FSA. A 

new promissory note is usually not required for students in the second or later year of study.

Half of all loan awards are issued in the fourth quarter of the fiscal year. Loans awarded are 

typically disbursed in multiple installments over an academic period. As a result, loans may be 

disbursed over multiple fiscal years. Loan awards may not be fully disbursed due to students 

leaving or transferring to other schools. FSA’s obligation estimate may also not reflect the actual 

amount of awards made. Based on historical averages, FSA expects approximately 8.9 percent 

of the amount obligated for new loan awards will not be disbursed.

When a loan is placed in deferment or forbearance, loan repayment is temporarily suspended 

with the length of postponement different for each borrower. Interest accrues while a loan is in 

deferment or forbearance. Loans are cancelled if a person dies, meets disability requirements, 

or occasionally through the bankruptcy courts. Loans are also cancelled through the Public 

Service Loan Forgiveness (PSLF) program, which forgives the remaining balance on a Direct 

Loan after 120 qualifying monthly payments are made. These payments must be made under a 

qualifying repayment plan while working full-time for a qualifying employer. In addition, FSA 

offers the Pay As You Earn (PAYE) program. This student loan repayment program is designed 

to help borrowers who struggle to make their normal student loan payments. The plan allows 

payments to be limited to 10 percent of discretionary income if qualifications are met. Under the 
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Notes to the Financial Statements

PAYE program, if all requirements are met, forgiveness of the remaining balance of a student 

loan is possible after 20 years of payments.

Budgetary Resources

Budgetary resources are amounts available to enter into new obligations and to liquidate them. 

FSA’s budgetary resources include unobligated balances of resources from prior years and new 

resources, which include appropriations, authority to borrow from Treasury, and spending 

authority from collections.

Borrowing authority is an indefinite budgetary resource authorized under the FCRA. This 

resource, when realized, finances the unsubsidized portion of the Direct Loan, FFEL, and other 

loan programs. In addition, borrowing authority is requested to cover the cost of the initial loan 

disbursement as well as any related negative subsidy to be transferred to Treasury General 

Fund receipt accounts. Treasury prescribes the terms and conditions of borrowing authority and 

lends to the financing account amounts as appropriate. Amounts borrowed, but not yet 

disbursed, are included in uninvested funds and earn interest. Treasury uses the same 

weighted average interest rates for both the interest charged on borrowed funds and the interest 

earned on uninvested funds. Treasury sets a different fixed interest rate to be used for each 

loan cohort once the loans are substantially disbursed. FSA may carry forward borrowing 

authority to future fiscal years if cohorts are disbursing loans. All borrowings from Treasury are 

effective on October 1 of the current fiscal year, regardless of when FSA borrowed the funds, 

except for amounts borrowed to make annual interest payments.

Authority to borrow from Treasury provides most of the funding for disbursements made under 

the Direct Loan program, FFEL, and other loan programs. Subsidy and administrative costs of 

the programs are funded by appropriations. Borrowings are repaid using collections from 

borrowers, fees, and interest on uninvested funds.

Unobligated balances represent the cumulative amount of budgetary resources that are not 

obligated and that remain available for obligation under law, unless otherwise restricted. 

Resources expiring at the end of the fiscal year remain available for five years, but only for 

upward adjustments of prior-year obligations, after which they are canceled and may not be 

used. Resources that have not expired at year-end are available for new obligations, as well as 

upward adjustments of prior-year obligations. Funds are appropriated on an annual, multiyear, 

or no-year basis. Appropriated funds expire on the last day of availability and are no longer 

available for new obligations. Amounts in expired funds are unavailable for new obligations but 

may be used to adjust previously established obligations.

Permanent Indefinite Budget Authority. The Direct Loan, FFEL, and other loan programs 

have permanent indefinite budget authority through legislation. Parts B, Federal Family 

Education Loan Program, and D, Federal Direct Student Loan, of the HEA pertain to the 

existence, purpose, and availability of permanent indefinite budget authority for these programs.

Reauthorization of Legislation. Funds for most FSA programs are authorized, by statute, to 

be appropriated for a specified number of years, with an automatic one-year extension available 

under Section 422 of the General Education Provisions Act. Congress may continue to 

appropriate funds after the expiration of the statutory authorization period, effectively 

reauthorizing the program through the appropriations process. The current President’s Budget 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 161

Notes to the Financial Statements

presumes all programs continue in accordance with congressional budgeting rules. (See Note 

12)

Entity and Non-Entity Assets

Assets are classified as either entity or non-entity assets. Entity assets are those that FSA has 

authority to use for its operations. Non-entity assets are those held by FSA but not available for 

use in its operations. FSA non-entity assets are offset by liabilities to third parties and have no 

impact on net position. FSA combines its entity and non-entity assets on the balance sheets and 

discloses its non-entity assets in the notes. (See Note 2)

Fund Balance with Treasury

The Fund Balance with Treasury includes amounts available to pay current liabilities and 

finance authorized purchases, as well as funds restricted until future appropriations are 

received. Treasury processes cash receipts and cash disbursements for FSA. FSA’s records 

are reconciled with Treasury’s records. (See Note 3)

Accounts Receivable

Accounts receivable are amounts due to FSA from the public and other federal agencies. 

Receivables from the public result from overpayments to recipients of grants and other financial 

assistance programs, and disputed costs resulting from audits of educational assistance 

programs. Amounts due from federal agencies result from reimbursable agreements entered 

into by FSA with other agencies to provide various goods and services. Accounts receivable are 

reduced to net realizable value by an allowance for uncollectible amounts. The estimate of an 

allowance for loss on uncollectible accounts is based on FSA’s experience in the collection of 

receivables and an analysis of the outstanding balances. (See Note 4)

Cash and Other Monetary Assets

Cash and other monetary assets are the federal government’s interest in the program assets 

held by state and nonprofit FFEL Program guaranty agencies (guaranty agencies’ federal 

funds). Section 422A of the HEA required FFEL guaranty agencies to establish federal student 

loan reserve funds. Guaranty agencies’ federal funds include initial federal start-up funds, 

receipts of federal reinsurance payments, insurance premiums, guaranty agency share of 

collections on defaulted loans, investment income, administrative cost allowances, and other 

assets.

The balance of guaranty agencies’ federal funds represents consolidated reserve balances of 

the 20 guaranty agencies based on the guaranty agency financial reports that each agency 

submits annually to FSA. Although FSA and the guaranty agencies operate on different fiscal 

years, all guaranty agencies are subject to an annual audit. A year-end valuation adjustment is 

made to adjust FSA’s balances to comply with federal accounting principles and disclose funds 

held outside of Treasury.

Guaranty agencies’ federal funds are classified as non-entity assets with the public and are 

offset by a corresponding liability due to Treasury on FSA’s balance sheets. The funds are held 

by the guaranty agencies but can only be used for certain specific purposes listed in FSA’s 

regulations. The guaranty agencies’ federal funds are the property of the U.S. and are reflected 
162 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

in the Budget of the United States Government. Payments made to FSA from guaranty agencies’ 

federal funds through a statutory recall or agency closures represent capital transfers and are 

returned to Treasury’s General Fund. (See Note 2)

Loan Receivables, Net and Loan Guarantee Liabilities

The financial statements reflect FSA’s estimate of the long-term subsidy cost of direct and 

guaranteed loans in accordance with the FCRA. Loans and interest receivable are valued at 

their gross amounts less an allowance for the present value of amounts not expected to be 

recovered, and thus having to be subsidized —called an “allowance for subsidy.” The difference 

between the gross amount and the allowance for subsidy is the present value of the cash flows 

to, and from, FSA that are expected from receivables over their projected lives. Similarly, 

liabilities for loan guarantees are valued at the present value of the cash outflows from FSA less 

the present value of related inflows. The estimated present value of net long-term cash outflows 

of FSA for subsidized costs is net of recoveries, interest supplements, and offsetting fees.

The loan guarantee liabilities presents the net present value of all future cash flows from 

currently insured FFEL loans, including claim payments, interest assistance, allowance 

payments, and recoveries from assigned loans. Guaranteed loans that default are initially turned 

over to guaranty agencies for collection. Defaulted FFEL loans are accounted for as assets and 

reported at their net present value, similar to Direct Loans, although they are legally not direct 

student loans. Credit program receivables, net includes defaulted FFEL loans owned by FSA 

and held by FSA or guaranty agencies. In most cases, after approximately four years, defaulted 

guaranteed loans not in repayment are turned over by the guaranty agencies to FSA for 

collection.

FFEL Program receivables include purchased loans and other interests acquired under an 

expired program. The cash flows related to these receivables include collections on purchased 

loans and other activities, including transfers of re-estimated subsidy. The cash flows of these 

authorities also include inflows and outflows associated with the underlying or purchased loans 

and other related activities, including any positive or negative subsidy transfers.

Capitalization of interest occurs as a result of various initiatives such as loan consolidations. As 

a result, interest receivable is reduced, and loan principal is increased. (See Note 5)

Property and Equipment, Net and Leases

FSA has very limited acquisition costs associated with buildings, furniture, and equipment as all 

federal and contractor staff are housed in leased buildings. The Department and FSA also lease 

information technology and telecommunications equipment, as part of a contractor-owned, 

contractor-operated services contract. Lease payments associated with this equipment have 

been determined to be operating leases and, as such, are expensed as incurred. The 

noncancellable lease term is one year, with the Department holding the right to extend the lease 

term by exercising additional one-year options. (See Note 4)

Liabilities

Liabilities represent actual and estimated amounts to be paid as a result of transactions or 

events that have already occurred.
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Fiscal Year 2021 Annual Report | Federal Student Aid 163

Notes to the Financial Statements

• Liabilities are classified as covered by budgetary resources if budgetary resources are 

available to pay them. Credit program liabilities funded by permanent indefinite 

appropriations are also considered covered by budgetary resources.

• Liabilities are classified as not covered by budgetary resources when congressional 

action is needed before they can be paid. Although future appropriations to fund these 

liabilities are likely, it is not certain that appropriations will be enacted to fund these 

liabilities.

• Liabilities not requiring appropriated budgetary resources include those related to 

deposit funds, Subsidy Due to Treasury General Fund for Future Liquidating Account 

Collections (pre-1992 loan guarantee programs), and Federal Perkins Loan program 

balances due to be repaid to the Treasury General Fund (See Note 6).

Debt Associated with Loans

FSA borrows from Treasury to provide funding for the Direct Loan, FFEL, and other credit 

programs for higher education. The liability to Treasury from borrowings represents unpaid

principal at year-end. FSA repays the principal based on available fund balances. Interest rates 

are based on the corresponding rate for 10-year Treasury securities and are set for those 

borrowings supporting each cohort of loans once the loans for that cohort are substantially 

disbursed. Interest is paid to Treasury on September 30. (See Note 7)

Subsidy Due to Treasury

FSA must transfer to the Treasury General Fund all excess funding resulting from downward reestimates of credit program loans that are subject to FCRA requirements. This excess funding is 

included in the liability for subsidy due to Treasury and will be transferred to Treasury in the 

succeeding fiscal year upon receipt of authority from OMB. Subsidy due to Treasury also 

includes future liquidating account collections (estimated collections in excess of estimated 

outlays) for FSA’s pre-1992 FFEL and HEAL loans that, when collected, will also be transferred 

to the Treasury General Fund. (See Note 8)

Accounts Payable

Accounts payable include amounts owed by FSA for goods and services received from other 

entities and scheduled payments transmitted but not yet processed. Accounts payable to the 

public primarily consists of in-process grant and loan disbursements, including an accrued 

liability for schools that have disbursed loans before requesting funds. (See Note 9)

Accrued Grant Liability

Some grant recipients incur allowable expenditures as of the end of an accounting period but 

have not been reimbursed by FSA. FSA accrues a liability for these allowable expenditures. The 

amount is estimated using statistical sampling of unliquidated balances. (See Note 9)

Personnel Compensation and Other Employee Benefits

Annual, Sick, and Other Leave. The liability for annual leave, compensatory time off, and other 

vested leave is accrued when earned and reduced when taken. Each year, the accrued annual 
164 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

leave account balance is adjusted to reflect current pay rates. Sick leave and other types of 

nonvested leave are expensed as taken. Annual leave earned but not taken, within established 

limits, is funded from future financing sources.

Retirement Plans and Other Retirement Benefits. Employees participate in either the Civil 

Service Retirement System (CSRS), a defined benefit plan, or the Federal Employees 

Retirement System (FERS), a defined benefit and contribution plan. For CSRS employees, FSA 

contributes a fixed percentage of pay.

FERS consists of Social Security, a basic annuity plan, and the Thrift Savings Plan. FSA and 

the employee contribute to Social Security and the basic annuity plan at rates prescribed by law. 

In addition, FSA is required to contribute to the Thrift Savings Plan a minimum of 1 percent per 

year of the basic pay of employees covered by this system, match voluntary employee 

contributions up to 3 percent of the employee’s basic pay, and match one-half of contributions 

between 3 percent and 5 percent of the employee’s basic pay. For FERS employees, FSA also 

contributes the employer’s share of Medicare.

Contributions for CSRS, FERS, and other retirement benefits are insufficient to fund the 

programs fully and are subsidized by the Office of Personnel Management (OPM). FSA imputes 

its share of the OPM subsidy, using cost factors provided by OPM, and reports the full cost of 

the programs related to its employees in FSA’s Statements of Net Cost. These OPM imputed 

costs are offset by imputed financing sources from costs absorbed by others in FSA’s 

Statements of Changes in Net Position.

Federal Employees’ Compensation Act. The Federal Employees’ Compensation Act (FECA) 

(Pub. L. 103-3) provides income and medical cost protection to covered federal civilian 

employees injured on the job, to employees who have incurred work-related occupational 

diseases, and to beneficiaries of employees whose deaths are attributable to job-related injuries 

or occupational diseases. The FECA program is administered by the U.S. Department of Labor 

(DOL), which pays valid claims and subsequently seeks reimbursement from FSA for these paid 

claims.

The FECA liability consists of two elements. The first element, accrued FECA liability, is based 

on claims paid by DOL but not yet reimbursed by FSA. FSA reimburses DOL for claims as funds 

are appropriated for this purpose. In general, there is a two- to three-year period between 

payment by DOL and reimbursement to DOL by FSA. As a result, FSA recognizes an 

intragovernmental liability, not covered by budgetary resources, for the claims paid by DOL that 

will be reimbursed by FSA.

The second element, actuarial FECA liability, is the estimated liability for future benefit 

payments and is recorded as a liability with the public, not covered by budgetary resources. The 

actuarial FECA liability includes the expected liability for death, disability, medical, and 

miscellaneous costs for approved compensation cases. DOL determines the actuarial FECA 

liability annually, as of September 30, using an actuarial method that considers historical benefit 

payment patterns, wage inflation factors, medical inflation factors, and other variables. The 

projected annual benefit payments are discounted to present value. (See Notes 6 and 9)
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Notes to the Financial Statements

Imputed Costs

Services are received from other federal entities at no cost or at a cost less than the full cost to 

FSA. Consistent with accounting standards, certain costs of the providing entity that are not fully 

reimbursed by FSA are recognized as imputed cost in the Statements of Net Cost and are offset 

by imputed revenue in the Statements of Changes in Net Position. Such imputed costs and 

revenues relate to employee benefits. However, unreimbursed costs of services other than 

those related to employee benefits are not included in FSA’s financial statements.

Net Cost

Net cost consists of gross costs and earned revenue. Major components of FSA’s net costs 

include credit program subsidy expense, credit program interest revenue and expense, and 

grant expenses. Administrative overhead costs are allocated to loan and non-credit programs 

based on number of applications processed, number of loans serviced, dollar amount of loan 

originations, cost of school compliance actions, and the cost to collect defaulted loans. (See 

Note 10)

Credit Program Subsidy Expense. Subsidy expense is an estimate of the present 

value cost of providing loans, excluding the administrative costs of issuing and servicing 

the loans. To estimate subsidy expense, FSA must project lifetime cash flows associated 

with loans disbursed in a specific fiscal year (i.e., the loan cohort). FSA projects these

lifetime cash flows using a set of econometric and financial models, as well as cash flow 

models. FSA estimates subsidy expenses annually for new loans disbursed in the 

current year; updates the previous cost estimates for outstanding loans disbursed in 

prior years (subsidy re-estimates); and updates previous cost estimates based on 

changes to terms of existing loans (loan modifications). Loan modifications include 

actions resulting from new legislation or from the exercise of administrative discretion 

under existing law, which directly or indirectly alters the estimated subsidy cost of 

outstanding Direct Loans (or Direct Loan obligations). The change in book value of 

Direct Loans resulting from a modification and the cost of modification will normally differ 

due to the use of different discount rates or the use of different measurement methods. 

Any difference between the change in book value and the cost of modification is 

recognized as a modification adjustment transfer gain or a modification adjustment 

transfer loss. (See Notes 5 and 10)

Credit Program Interest Revenue and Expense. FSA recognizes interest revenue 

from the public when interest is accrued on Direct Loan Program loans, defaulted and 

acquired FFEL loans, and outstanding principal for other loan programs. Interest due 

from borrowers is accrued at least monthly and is satisfied upon collection or 

capitalization into the loan principal. Federal interest revenue is recognized on the 

unused fund balances with Treasury in the financing accounts.

Federal interest expense is recognized monthly on the outstanding borrowing from 

Treasury (debt) used to finance Direct Loan and loan guarantee programs. Accrued 

interest to Treasury is paid on September 30. The interest rate for federal interest 

expense is the same as the rate used for federal interest revenue.

Interest expense equals interest revenue plus administrative fees accrued for all credit 

programs due to subsidy amortization. Subsidy amortization is required by the FCRA 

and accounts for the difference between interest expense and revenue cash flows. For 
166 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Direct Loans, the allowance for subsidy is adjusted with the offset to interest revenue. 

For guaranteed loans, the liability for loan guarantees is adjusted with the offset to 

interest expense. (See Note 10)

Net Position

Net position consists of unexpended appropriations and cumulative results of operations. 

Unexpended appropriations include undelivered orders and unobligated balances, except for 

federal credit financing and liquidating funds and trust funds. Cumulative results of operations 

represent the net difference since inception between (1) expenses and (2) revenues and 

financing sources.

Taxes

FSA is a federal entity and is not subject to federal, state, or local taxes. Therefore, no provision 

for income taxes is recorded.

Use of Estimates

FSA and Department management are required to make certain estimates while preparing 

consolidated financial statements in conformity with GAAP. These estimates are reflected in the 

assets, liabilities, net cost, and net position of the financial statements and may differ from 

actual results. FSA’s estimates are based on management’s best knowledge of current events, 

best available data, economic assumptions, historical experiences, and other assumptions that 

are believed to be reasonable under the circumstances. Significant estimates reported on the 

financial statements include: allocation of administrative overhead costs; allowance for subsidy 

and subsidy expense for direct, defaulted guaranteed and acquired loans; the liability for loan 

guarantees; and grant liability and advance accruals. (See Notes 4, 5, 9, and 10)

FSA’s estimates for credit reform programs are calculated using a series of assumption models 

that are updated using a statistically valid sample of National Student Loan Data System 

(NSLDS®) data, data from the Debt Management and Collection System (DMCS), and economic 

assumptions provided by the Office of Management and Budget. Actual results may differ from 

those assumptions and estimates. Differences between actual results and these estimates may 

occur in the valuation of credit program receivables and liabilities for loan guarantees under 

guidelines in the FCRA. FSA recognizes the sensitivity of credit reform modeling. Slight 

changes in modeling methodology or data used to derive assumptions can produce largely 

varied results. FSA therefore continually reviews its model factors and statistical modeling 

techniques to reflect the most accurate credit program costs possible in its annual financial 

statements. FSA updates its assumption models in accordance with its model update plan, 

which takes into consideration statutory or new program requirements, major changes to the 

model structure or methodology, and data updates. This level of granularity in the modeling 

methodology is essential to the financial reporting and budgeting processes so that FSA can 

forecast the costs of various program options when making policy decisions. (See Note 5)

Reclassifications

The following reclassifications were made to the prior year financial statements and notes to 

conform to the current year presentation. These changes had no effect on total assets, liabilities 

and net position, net cost of operations, or budgetary resources.
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Fiscal Year 2021 Annual Report | Federal Student Aid 167

Notes to the Financial Statements

• The format of the balance sheet was changed to reflect more detail for certain line items, 

as required for all significant reporting entities by OMB Circular A-136. This change will 

allow readers to see how the amounts shown on the balance sheet are reflected on the 

Government-wide Balance Sheet and thereby support the preparation and audit of the 

Financial Report of the United States Government. The presentation of the FY 2020 

balance sheet was modified to be consistent with the 2021 presentation. Balance sheet 

notes affected by the new balance sheet format were also reclassified. (See Notes 2, 4, 

5, and 9)

• Note 13, Reconciliation of Net Cost to Net Outlays, was reclassified to conform to 

FY 2021 Treasury guidance for the presentation of this reconciliation.

Note 2. Non-Entity Assets

(Dollars in Millions)

FSA’s FY 2021 assets are predominantly entity assets (99.8 percent), leaving the small portion 

of assets remaining as non-entity assets. Non-entity assets with the public primarily consist of 

guaranty agency reserves (73.3 percent), reported as cash and other monetary assets, and 

Federal Perkins Loan program loan receivables (26.6 percent), reported as loan receivables, 

net. The corresponding liabilities for these non-entity assets are reflected in various accounts, 

including intragovernmental accounts payable, Guaranty Agencies’ Federal Funds due to 

Treasury, and other liabilities (See Note 9).

Note 3. Fund Balance with Treasury

(Dollars in Millions)

 

 
168 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Available unobligated balances represent amounts that are apportioned for obligation in the 

current fiscal year. Unavailable unobligated balances represent amounts that are not 

apportioned for obligation during the current fiscal year and expired appropriations no longer 

available to incur new obligations. Total unavailable unobligated balance ($23.5 billion) differs 

from unapportioned and expired amounts on the SBR ($25.4 billion) due to the Guaranty 

Agencies’ Federal Funds ($1.9 billion).

In FY 2021 and FY 2020, $38 million and $25 million, respectively of unused funds from 

canceled appropriations were returned to Treasury. Such balances are excluded from the 

amount reported as Fund Balance with Treasury in accordance with Treasury guidelines (See 

Note 12).

Note 4. Other Assets

(Dollars in Millions)

Changes in property and equipment balances were as follows.

Property and Equipment

(Dollars in Millions)

 

 
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Notes to the Financial Statements

Note 5. Loan Receivables, Net and Loan Guarantee Liabilities

Loan Receivables

(Dollars in Millions)

The federal student loan programs provide students and their families with the funds to help 

meet postsecondary education costs. Funding for these programs is provided through 

permanent indefinite budget authority. The emergency relief measures provided by Congress 

and the Administration in response to the COVID-19 pandemic were recorded as loan 

modifications and are described in each of the programs below. Per OMB guidance, loan 

modifications were calculated using the President’s Budget formulation discount rates. The net 

loans receivable is not necessarily representative of the proceeds that might be expected if 

these loans were sold on the open market.

What follows is additional analysis of the activity, costs, and adjustments for each of the loan 

programs.

Direct Loan Program. The federal government makes loans directly to students and parents 

through participating institutions of higher education under the Direct Loan Program. Direct 

Loans are originated and serviced through contracts with private vendors.

Direct Loan Program loan receivables include defaulted and nondefaulted loans owned and 

held by FSA. Of the $1,378.7 billion in gross loan receivables, as of September 30, 2021, $91.5 

billion (6.6 percent) in loan principal was in default and had been transferred to FSA’s defaulted 

loan servicer, compared to $100.3 billion (7.6 percent) as of September 30, 2020.

Direct Loan Program Loan Disbursements by Loan Type

(Dollars in Millions)

The allocation of disbursements for the first three loan types is estimated based on historical 

trend information.

 

 
170 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Student and parent borrowers may prepay existing loans without penalty through a new 

consolidation loan. Under the FCRA and requirements provided by OMB regulations, the 

retirement of Direct Loans being consolidated is considered a collection of principal and interest. 

This receipt is offset by the disbursement related to the newly created consolidation loan.

Underlying direct or guaranteed loans, performing or nonperforming, are paid off in their original 

cohort; new consolidation loans are originated in the cohort in which the new consolidation loan 

was obligated. Consolidation activity is taken into consideration in establishing subsidy rates for 

defaults and other cash flows. The cost of new consolidations is included in subsidy expense for 

the current-year cohort; the effect of prepayments on existing loans could contribute to reestimates of prior cohort subsidy costs. The net receivables include estimates of future 

prepayments of existing loans through consolidations; they do not reflect subsidy costs 

associated with anticipated future consolidation loans.

Direct Loan consolidations were $21.5 billion during FY 2021 and $30.4 billion during FY 2020. 

The effect of the early payoff of the existing loans—those being consolidated—is recognized in 

the future projected cash flows associated with that cohort.

Direct Loan Program Interest Expense and Revenues (See Note 10)

(Dollars in Millions)

 
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Fiscal Year 2021 Annual Report | Federal Student Aid 171

Notes to the Financial Statements

Direct Loan Program Subsidy Expense

(Dollars in Millions)

Subsidy Expense for Direct Loans Disbursed in the Current Year. The two major 

components of the total subsidy expense for Direct Loans disbursed in the current year (subsidy 

transfers) are Interest Rate Differential and Other Components. Interest Rate Differential is 

attributable to the difference between the borrowers’ interest payments due to FSA and the 

FSA’s estimated cost to finance the Direct Loan on a present value basis. The Other 

Components of subsidy transfers primarily consists of contract collection costs, program review 

collections, fees, and loan forgiveness.

Loan Modifications. Loan modifications for the Direct Loan Program for FY 2021 included the 

following:

• Loan Deferral Extension. In FY 2021 the outgoing administration extended the student 

loan repayment deferrals through January 31, 2021. Subsequently, the current 

administration extended the student loan repayment deferrals through January 31, 2022. 

The extended relief for borrowers resulted in an upward modification cost of 

$52.0 billion. There was a net positive $2.5 billion modification adjustment transfer 

associated with these modifications, bringing the total FY 2021 modification cost for the 

student loan repayment deferrals to $49.5 billion.

• Total and Permanent Disability. FSA recorded an upward modification for costs 

associated with the regulatory action to clarify that borrowers determined to be eligible 

for a total and permanent disability discharge based on data that FSA obtains from the 

Department of Veterans Affairs (VA) or the Social Security Administration (SSA) are not 

required to submit an application to have their federal student loans discharged. These 

discharges resulted in an upward modification cost of $18.7 billion.

 
172 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

• Faith-Based Final Rule. FSA recorded an upward modification to reflect the cost of 

updated program regulations that permit borrowers who work for employers that engage 

in religious instruction, worship services, or proselytizing to qualify for Public Service 

Loan Forgiveness so long as they meet the applicable standards. These updated 

regulations resulted in an upward modification cost of $0.1 billion.

Net Upward Subsidy Re-Estimates for All Prior Year Loan Cohorts. The Direct Loan

Program subsidy re-estimate increased subsidy expense in FY 2021 by $24.0 billion. Reestimated costs only include cohorts that are 90 percent disbursed (i.e., cohort years 1994–

2020). The re-estimate reflects the assumption updates and other changes described below.

In addition to the major assumption updates described below, the re-estimate reflects several 

other assumption updates, including loan volume, disbursement, and enter repayment rates.

• Death, Disability, and Bankruptcy (DDB). FSA updated the data and made a technical 

change to extend the window for a DDB event to occur from 15 to 30 years. Those 

claims were included in the estimates of DDB rates previously, but the extended 

timeframe allows for a more realistic sense of their timing. The combined effect of these 

updates led to a new upward re-estimate of $3.2 billion.

• Income-Driven Repayment (IDR) Model Changes. FSA completed a standard IDR 

data update to reflect the immediate prior cycle for interest rates, defaults, prepayments, 

contract collection costs, and DDB. The DDB update includes adjustments for the Total 

Permanent Disability (TPD) regulation that resulted in increased disability rates related 

to the expanded opt-out process with SSA to match borrowers within the IDR model. In 

addition, actual data on borrower incomes was analyzed using the NSLDS data. The 

number of actual incomes for 2019 was very low due to impacts from the COVID-19 

pandemic, which led to stable income calibration results compared to last year’s level of 

35 percent. Payments in FY 2020 were adjusted to account for voluntary payments 

made by students during the payment pause as seen in the FSA data. The combined 

effect of these updates led to a net upward re-estimate of $22.4 billion.

• Deferment and Forbearance. FSA updated actual deferment and forbearance rates for 

FY 2020 and calibrated FY 2021 and FY 2022 rates using data from FSA on borrower 

payments made during the period of repayment deferral. The combined effect of these 

changes led to a net downward re-estimate of $4.8 billion. 

• Collections. FSA updated the data and calibrated FY 2021 collection rates to reflect the 

extension of the repayment deferral. The combined effect of these changes led to a net 

upward re-estimate of $1.5 billion.

• Default. In addition to the adjustments for the extension of the student loan repayment 

deferrals, FSA updated the data and incorporated actual unemployment rates from the 

Bureau of Labor Statistics and projected unemployment rates from OMB. The combined 

effect of these changes led to a net downward re-estimate of $6.4 billion.

• Repayment Plan Selection. FSA incorporated new repayment plan data that showed a 

continuing increase in IDR plan usage. This update led to an upward re-estimate of 

$0.7 billion.

• 2020 Cohort Assumption Changes. The technical re-estimate cannot reflect the 

impacts of certain assumption changes applicable to the current year loan cohort until 
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Fiscal Year 2021 Annual Report | Federal Student Aid 173

Notes to the Financial Statements

the following fiscal year per OMB guidance. The current year’s re-estimate includes a 

net upward adjustment of $15.5 billion for these current year assumption changes 

attributable to the FY 2020 cohort.

• Discount Rates. FCRA requires that for discounting cash flows, financing accounting 

borrowing, and financing account interest earnings be identical and based on the 

Treasury rates in effect during the period of loan disbursement. Adjustments to the 

FY 2019 and FY 2020 cohort discount rates were calculated. The combined effect of 

these adjustments led to a new downward re-estimate of $11.1 billion.

• Interest on the Re-Estimate. Interest on re-estimates is the amount of interest that 

would have been earned or paid by each cohort on the subsidy re-estimate if the reestimated subsidy had been included as part of the original subsidy estimate. The 

interest on the re-estimate calculated on the overall subsidy re-estimate resulted in a net 

upward re-estimate of $5.0 billion.

• Interactive Effects. The re-estimate includes a net downward re-estimate of $1.6 billion 

attributed to the interactive effects of the assumption changes described above. Each 

assumption described above is run independently. The interactive effect is a result of 

combining all assumptions together to calculate the final re-estimate.

Direct Loan Subsidy Rates—Cohort 2021

The subsidy rates disclosed pertain only to the current year’s cohorts. These rates cannot be 

applied to the Direct Loans disbursed during the current reporting year to yield the subsidy 

expense. The subsidy expense for new loans reported in the current year could result from 

disbursements of loans from both current year cohorts and prior-year cohorts. The subsidy 

expense reported in the current year also includes modifications and re-estimates. 

The subsidy costs of FSA’s student loan programs, especially the Direct Loan Program, are 

highly sensitive to changes in actual and forecasted interest rates. The formulas for determining 

program interest rates are established by statute; the existing loan portfolio has a mixture of 

borrower and lender rate formulas. Interest rate projections are based on probabilistic interest 

rate scenario inputs developed and provided by OMB.

 
174 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Direct Loan Program Reconciliation of Allowance for Subsidy

(Dollars in Millions)

The estimation process used to determine the amount of positive or negative subsidy expense 

each fiscal year, and subsequently the cumulative taxpayer cost of the program (allowance for 

subsidy), is subject to various external risk factors that often show strong interdependence with 

one another. These risks include uncertainty about changes in the general economy, changes in 

the legislative and regulatory environment, and changing trends in borrower performance 

related to contractual cash flows within the loan programs.

Due to the complexity of the Direct Loan Program, there is inherent projection risk in the 

process used for estimating long-term program costs. As stated, some uncertainty stems from 

potential changes in student loan legislation and regulations because these changes may 

fundamentally alter the cost structure of the program. Operational and policy shifts may also 

affect program costs by causing significant changes in borrower repayment timing. Actual 

performance may deviate from estimated performance, which is not unexpected given the longterm nature of these loans (cash flows may be estimated up to 40 years), and the multitude of 

projection paths and possible outcomes. The high percentage of borrowers in IDR plans has 

made projection of borrower incomes a key input for the estimation process. This uncertainty is 

directly tied to the macroeconomic climate and is another inherent program element that 

displays the interrelated risks facing the Direct Loan program. FSA utilizes the best data 

available with modeling techniques that have been examined over time by several outside 

entities. Management has confidence over the estimates by using several different tools to 

analyze cost estimates. Re-estimates on the loan portfolio are performed twice a year ensuring 

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

Loans written off result from borrowers having died, becoming disabled, or having a loan 

approved for discharge in bankruptcy. The interest rate re-estimate reflects the cost of finalizing 

the Treasury borrowing rate to be used for borrowings received to fund the disbursed portion of 

the loan awards obligated.

Federal Family Education Loan Program. FFEL was established in fiscal year 1965 and is a 

guaranteed loan program. As a result of the SAFRA Act, no new FFEL loans have been made 

since July 1, 2010. Federal guarantees on FFEL program loans and commitments remain in 

effect for loans made before July 1, 2010, unless they were sold to FSA through an ECASLA 

 
MM

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Notes to the Financial Statements

authority (acquired FFEL loans), consolidated into a Direct Loan, or otherwise satisfied, 

discharged, or canceled.

FFEL Guaranteed Loans Outstanding

(Dollars in Billions)

As of September 30, 2021, the total principal value of guaranteed loans outstanding and the 

amount of that principal which is guaranteed is approximately $116.9 billion.

Additionally, the FFEL program guarantees outstanding interest balances. As of September 30, 

2021, the interest balances outstanding for guaranteed loans held by lenders was 

approximately$4.4 billion.

FSA’s total FFEL program guarantees (principal and interest) are approximately $121.3 billion 

as of September 30, 2021. Of the total guaranteed amount, FSA would expect to pay a smaller 

amount to the guaranty agencies. The guarantee rates range from 75 to 100 percent of the 

principal and interest balance depending on the type of claim, when the loan was made, and the 

guaranty agency's claim experience. For purposes of disclosing FSA’s total risk exposure for 

FFEL guarantees, the highest reimbursement rate of 100 percent is assumed.

Defaulted and acquired FFEL loans are accounted for as assets as shown in the following table.

 
176 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

FFEL Program Loan Receivables

(Dollars in Millions)

FFEL Program Subsidy Expense

(Dollars in Millions)

 

 
MM

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Notes to the Financial Statements

Loan Modifications. Loan modifications for the FFEL Loan program for FY 2021 included the 

following:

• Loan Deferral Extension. In FY 2021 the outgoing administration extended the student 

loan repayment deferrals through January 31, 2021. Subsequently, the current 

administration extended the student loan repayment deferrals through January 31, 2022. 

The extended relief for borrowers resulted in an upward modification cost of $3.9 billion.

There was a net positive $0.3 billion modification adjustment transfer associated with 

these modifications, bringing the total FY 2021 modification cost for the student loan 

repayment deferrals to $3.6 billion.

• Total and Permanent Disability. FSA recorded an upward modification for costs 

associated with the regulatory action to clarify that borrowers determined to be eligible 

for a total and permanent disability discharge based on data that FSA obtains from the 

VA or the SSA are not required to submit an application to have their Federal student 

loans discharged. These discharges resulted in an upward modification cost of $2.2 

billion.

Net Upward/(Downward) Subsidy Re-estimates. The FFEL subsidy re-estimate increased 

subsidy expense in FY 2021 by $7.8 billion. The net upward re-estimates in these programs 

were due primarily to updated collection and default rates.

Reconciliation of Liabilities for Loan Guarantees

(Dollars in Millions)

Other activity includes negative special allowance collections, collections on defaulted FFEL 

loans, guaranty agency expenses, and loan cancellations due to death, disability, or bankruptcy.

 
178 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

Allowance for Subsidy Reconciliation for Acquired FFEL Loans

(Dollars in Millions)

Other Credit Programs for Higher Education

(Dollars in Millions)

Federal Perkins Loan Program. Loans made through the Federal Perkins Loan program were 

low-interest federal student loans for undergraduate and graduate students with exceptional 

 

 
MM

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Notes to the Financial Statements

financial needs. Schools made these Perkins loans to their students and are responsible for 

servicing the loans throughout the repayment term. Borrowers who undertake certain public, 

military, or teaching service employment are eligible to have all or part of their loans cancelled.

The Perkins Loan program was a revolving loan program where the loan repayments collected 

from former students were used to make new loans to current students. FSA provided most of 

the capital used by schools to make these loans to eligible students. Participating schools 

provided the remaining program funding. In some statutorily defined cases, funds were provided 

by FSA to reimburse schools for loan cancellations. The above schedule includes only Perkins 

loans that were assigned to FSA when schools discontinued their participation in the program. 

For these assigned Perkins loans, collections of principal, interest, and fees, net of amounts 

paid to cover contract collection costs totaled $79 million and $38 million for FY 2021 and FY 

2020, respectively.

The Federal Perkins Loan Program Extension Act of 2015 (Extension Act) eliminated the 

authorization for schools to make new Perkins loan disbursements as of September 30, 2017, 

and ended all Perkins loan disbursements by June 30, 2018. Before the authority for new 

Perkins loans ended, collections made by the schools would go back into each school’s Perkins 

fund to be used to make more loans. Schools are required to return to FSA the federal share of 

any excess beyond what is needed (excess liquid capital).

Schools are not required to liquidate and close out their programs now that no new Perkins 

loans are being made. Schools continue to take in collections and are required to return the 

federal share of the capital that is collected to FSA on an annual basis. Schools returned $850 

million and $1,279 million to FSA in FY 2021 and FY 2020, respectively, for the federal share of 

collected cash.

Schools will continue to service outstanding Perkins loans to recover the money they 

contributed to their Perkins funds for as long as it is feasible to do so or until the eventual winddown of their portfolios. Schools that liquidate and close out their programs must transfer any 

outstanding portfolio to FSA and liquidate any final cash. Most recent data from the 2021-2022 

reporting year shows a $3.3 billion outstanding principal balance on Perkins loans held by 

schools, and FSA’s equity interest on this portfolio is $2.8 billion.

The amounts collected by FSA annually for defaulted Perkins loans and for the return of the 

federal share of schools’ Perkins capital contributions are returned to the Treasury General 

Fund (See Note 12)

TEACH Grant Program. FSA awards annual grants of up to $4,000 to eligible undergraduate 

and graduate students who agree to serve as full-time mathematics, science, foreign language, 

bilingual education, special education, or reading teachers at high-need schools for four years

within eight years of graduation. The maximum lifetime grant for students is $16,000 for 

undergraduate programs and $8,000 for graduate programs. For students failing to fulfill the 

service requirement, the grants are converted to Direct Unsubsidized Stafford Loans. The 

program is operated as a loan program under the FCRA for budget and accounting purposes 

since grants can be converted to Direct Loans. In FY 2021 the outgoing administration extended 

the student loan repayment deferrals through January 31, 2021. Subsequently, the current 

administration extended the student loan repayment deferrals through January 31, 2022. The 

extended relief for borrowers resulted in an upward modification cost of $21 million. FSA also 

recorded an upward modification to reflect the cost of updated program regulations to improve 
180 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

the certification process and reduce grant to loan conversions. These updated regulations 

resulted in an upward modification of $25 million. There was a positive $1 million modification 

adjustment transfer associated with this modification, bringing the total cost of this modification 

to $24 million.

TEACH Subsidy Rates—Cohort 2021

HEAL Program. FSA assumed responsibility in FY 2014 for the HEAL program and the 

authority to administer, service, collect, and enforce the program. The HEAL program is 

structured as required by the FCRA. A liquidating account is used to record all cash flows to and 

from the government resulting from guaranteed HEAL loans committed before 1992. All loan 

activity for 1992 and beyond is recorded in corresponding financing accounts. In FY 2021 the 

outgoing administration extended the student loan repayment deferrals through January 31, 

2021. Subsequently, the current administration extended the student loan repayment deferrals 

through January 31, 2022. The extended relief for borrowers resulted in an upward modification 

cost of $1 million.

Note 6. Liabilities Not Covered by Budgetary Resources

Liabilities Not Covered

(Dollars in Millions)

 

 
MM

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Notes to the Financial Statements

Note 7. Debt Associated with Loans

(Dollars in Millions)

FSA borrows from Treasury’s Bureau of the Public Debt to fund the disbursement of new loans 

and the payment of credit program outlays and related costs. During FY 2021, debt increased 

2.3 percent from $1,249.8 billion in the prior year to $1,221.1 billion. FSA makes periodic 

principal payments, after evaluating the cash position and liability for future outflows in each 

program and pays interest, as mandated by the FCRA.

Approximately 93.5 percent of FSA’s debt, as of September 30, 2021, is attributable to the 

Direct Loan program. Most of the net borrowing activity (borrowing less repayments) for the year 

was designated for funding new Direct Loan disbursements.

FSA also borrows from Treasury for activity in the Other Credit Programs for Higher Education. 

During FY 2021, TEACH net borrowing of $73 million was used for the advance of new grants 

and repayments of principal made to Treasury.

Note 8. Subsidy Due to Treasury

(Dollars in Millions)

 

 
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Notes to the Financial Statements

Note 9. Other Liabilities

(Dollars in Millions)

 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 183

Notes to the Financial Statements

Note 10. Net Cost

Gross Costs and Exchange Revenue by Program

(Dollars in Millions)

 
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Notes to the Financial Statements

Credit Program Interest Expense and Revenues

(Dollars in Millions)

Interest expense equals interest revenue plus administrative fees accrued for all credit 

programs due to subsidy amortization. Subsidy amortization is required by the FCRA and 

accounts for the difference between interest expense and revenue cash flows. For Direct Loans, 

the allowance for subsidy is adjusted with the offset to interest revenue. For guaranteed loans, 

the liability for loan guarantees is adjusted with the offset to interest expense.

Due to the COVID-19 relief actions to suspend nearly all required federal student loans 

payments and set borrower interest rates to zero percent until January 31, 2022, no new 

interest revenues were recognized in FY 2021. However, interest adjustment and reapplication 

activity is included in the current year’s interest with the public in the schedule above. 

Adjustments and reapplications cause loan activity during the period between the original 

effective date and the new processing date to be reversed and reposted. As a result, interest 

accrued in a prior year is reversed and typically reposted. The amount of interest reposted can 

be different than the original amount depending on the purpose of the adjustment and whether 

the adjustment or reapplication caused an increase or decrease to the principal balance as of 

the original effective date. These adjustments and reapplications resulted in net negative FY 

2021 interest revenues for the Direct Loan Program and the FFEL Program.

Grant Expenses

(Dollars in Millions)

Federal Pell Grants – Provides need-based grants to students to promote access to 

postsecondary education. Grant amounts are dependent on: the student’s expected family 

contribution; the cost of attendance (as determined by the institution); the student’s enrollment 

status (full-time or part-time); and whether the student attends for a full academic year or less. 

Pell Grants are the single largest source of grant aid for postsecondary education.

 

 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 185

Notes to the Financial Statements

Federal Work-Study Program – Provides funds by formula to enable eligible institutions to

offer employment to students based on financial needs. The program is available to full-time or 

part- time students and encourages community service work. The work is often related to the 

student’s course of study. This program is administered by the schools that participate in the 

Federal Work-Study program. Hourly earnings under this program must be at least the federal 

minimum wage. Federal funding, in most cases, pays 75 percent of a student’s hourly wage, 

with the remaining 25 percent paid by the employer.

Federal Supplemental Education Opportunity Grants – Provides funds by formula to enable 

eligible institutions to offer grants to students based on need. Federal grants distributed under 

this program are administered directly by the financial aid office at each participating school.

Note 11. COVID-19 Activity (See Note 5)

(Dollars in Millions)

The COVID-19 relief legislation and administrative actions provided support for student loan 

borrowers primarily by suspending nearly all federal loan payments until September 30, 2021, 

interest free. A Dear Colleague Letter released on May 12, 2021, expanded the pause on 

federal student loan interest and collections on all defaulted loans in the FFEL Program that are 

 
186 Fiscal Year 2021 Annual Report | Federal Student Aid

Notes to the Financial Statements

managed by guaranty agencies, retroactive to March 2020. FSA authorized guaranty agencies

to reimburse themselves from the Federal Fund for lost revenue that they will realize because of 

these actions. However, that reimbursement will only cover the share of what a guaranty agency

might have reasonably collected during the pandemic but for the suspension.

Funding for student loan repayment deferrals was provided through FY 2020 and FY 2021 

indefinite appropriations totaling $42.2 billion and $56.2 billion, respectively. Cost impacts of the 

student loan repayment deferrals were recorded as loan modifications in FY 2020 ($41.9 billion) 

and FY 2021 ($53.1 billion). These COVID-19 loan modifications are a component of subsidy 

expense that reduced the overall credit program loan receivable balances. (see Note 5)

In addition to suspending student loan repayments, other COVID-19 relief provided to student 

loan borrowers included the following:

• FSA stopped all federal wage garnishments and collection actions for borrowers with 

federally held loans in default.

• FSA provided relief for certain borrowers who received student loan discharges due to 

total and permanent disability. Unless it is through a process with the VA, borrowers

receiving this discharge are, by regulation, subject to a three-year monitoring period 

during which they must provide FSA with information about their earnings from 

employment. Per regulation, borrowers whose earnings exceed certain thresholds and 

borrowers who do not meet certain other criteria will have their loans reinstated. FSA 

provided relief to ensure no borrowers are at risk of having their loans reinstated, 

meaning they would have to repay their debt—for failure to provide earnings information 

during the COVID-19 emergency. This change was made retroactive to March 13, 2020, 

the start of the COVID-19 national emergency.

• FSA requested a waiver from the Small Business Administration to immediately help

nearly 30,000 small business owners in the Paycheck Protection program who faced

difficulties because they were delinquent or in default on a federal student loan. 

Note 12. Statements of Budgetary Resources

The SBR compares budgetary resources with the status of those resources. As of September 

30, 2021, budgetary resources were $381.0 billion and net agency outlays were $164.2 billion. 

As of September 30, 2020, budgetary resources were $389.1 billion and net agency outlays 

were $104.4 billion.
MM

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Notes to the Financial Statements

Net Adjustments to Unobligated Balances Brought Forward

(Dollars in Millions)

During the periods ended September 30, 2021, and September 30, 2020, certain adjustments 

were made to the balance of unobligated budgetary resources available as of October 1, 2020, 

and October 1, 2019. These adjustments include, among other things, recoveries of prior year 

unpaid obligations that result from downward adjustments of undelivered orders that were 

obligated in a prior fiscal year.

Unused Borrowing Authority

(Dollars in Millions)

FSA is given authority to draw funds from Treasury to finance the Direct Loan, FFEL, and other 

loan programs. Unused borrowing authority is a budgetary resource and is available to support 

obligations for these programs. FSA periodically reviews its borrowing authority balances in 

relation to its obligations resulting in the withdrawal of unused amounts.

Undelivered Orders at the End of the Period

(Dollars in Millions)

Undelivered orders represent the amount of goods and/or services ordered that have not been 

actually or constructively received. The paid amount includes any orders that may have been 

prepaid or advanced but for which delivery or performance has not yet occurred.

 

 

 
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Notes to the Financial Statements

Distributed Offsetting Receipts

(Dollars in Millions)

Distributed offsetting receipts are amounts that FSA collects from the public or from other 

federal agencies that are used to offset or reduce FSA’s budget outlays. FSA’s outlays are 

measured on both a gross and net basis, with net outlays being reduced by offsetting receipts.

Most of the distributed offsetting receipts line item on the SBR represents amounts paid from 

the Direct Loan Program and FFEL Program financing accounts to Treasury General Fund 

receipt accounts for downward current fiscal year executed subsidy re-estimates and negative 

subsidies.

Reconciliation of SBR to Budget of the United States Government

(Dollars in Millions) 

The FY 2023 President’s Budget, which presents the actual amounts for the year ending 

September 30, 2021, has not been published as of the issue date of these financial statements. 

The FY 2023 President’s Budget is scheduled for release in February 2022 and will be made 

available on OMB’s website. The table above reconciles the FY 2020 SBR to the FY 2022 

President’s Budget (FY 2020 actual amounts) for budgetary resources, new obligations and 

upward adjustments, distributed offsetting receipts, and net outlays.

Reconciling differences exist because the President’s Budget excludes expired funds. 

Additionally, the President’s Budget includes a public enterprise fund that reflects the gross 

obligations by the FFEL Program for the estimated activity of the consolidated federal fund of 

the guaranty agencies. Ownership by the federal government is independent of the actual 

control of the assets. Since the actual operation of the federal fund is independent from FSA’s 

direct control, budgetary resources and new obligations and upward adjustments are estimated 

 

 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 189

Notes to the Financial Statements

and disclosed in the President’s Budget to approximate the gross activities of the combined 

federal fund. Amounts reported on the SBR for the federal fund are compiled by combining all 

guaranty agencies’ annual reports to determine a net valuation amount for the federal fund.

Note 13. Reconciliation of Net Cost to Net Outlays

(Dollars in Millions)

This reconciliation explains the relationship between FSA’s net cost and its net outlays. 

Reconciling items result from transactions that did not result in a current period outlay but did 

result in a current period cost, and current period outlays that did not result in a current period 

cost.

Disbursements for new FCRA loans and collections of principal and interest on existing FCRA 

loans are recorded in nonbudgetary credit reform financing accounts. These disbursements and 

collections are reported on the Statement of Budgetary Resources as disbursements, net, and 

not as agency outlays, net. Since these disbursements and collections affect neither net cost of 

operations nor agency outlays, net, they are excluded from this reconciliation as are any 

increases or decreases in the FCRA loan receivable balances.

 
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Notes to the Financial Statements

The two major reconciling differences, both associated with FSA’s FCRA loan programs, are for 

Year-End Credit Reform Subsidy Accrual Re-estimates (current-year subsidy accrual costs) and 

Effect of Prior-Year Credit Reform Subsidy Re-estimates (current-year budget subsidy costs).

• Current-year subsidy accrual costs are the portion of the current-year loan subsidy reestimates not impacting the current year outlays.

• Current-year budget subsidy costs are current year indirect appropriations provided to 

fund subsidy costs accrued in the prior year. This includes the portion of the current 

year’s executed President’s Budget re-estimates not included in this year’s net cost 

subsidy expense. 

Note 14. Commitments and Contingencies

FSA discloses contingencies where any of the conditions for liability recognition are not met and 

there is at least a reasonable possibility that a loss or an additional loss may have been incurred 

in accordance with FASAB Standard No. 5, Accounting for Liabilities of the Federal 

Government. The following commitments are amounts for contractual arrangements that may 

require future financial obligations.

Future Minimum Lease Payments

(Dollars in Millions)

FSA leases from GSA all or a portion of privately owned and publicly owned buildings in 8 cities. 

The table above presents the estimated future minimum lease payments for these privately and 

publicly owned buildings.

Guaranty Agencies

FSA may assist guaranty agencies experiencing financial difficulties. FSA has not done so in FY 

2021 or 2020 and does not expect to in future years. No provision has been made in the 

financial statements for potential liabilities.

Litigation and Other Claims

The Department is involved in various lawsuits incidental to its operations. In the opinion of 

management, the ultimate resolution of pending litigation will not have a material effect on 

FSA’s financial position. As appropriate, the Department would seek recovery from Treasury’s 

Judgment Fund for any loss in litigation that may occur. The Judgment Fund is a permanent, 

indefinite appropriation available to pay judgments against the government if appropriated funds 

cannot be used.

 
MM

Fiscal Year 2021 Annual Report | Federal Student Aid 191

Notes to the Financial Statements

The cost of loan forgiveness related to borrower defense claims reflected in the accompanying 

financial statements is limited to loans originated through December 30, 2020. The final 

disposition of claims filed and those yet to be filed from loans originated before December 30, 

2020, is not expected to have a material impact on these financial statements.

Other Matters

Some portion of the current-year financial assistance expenses (grants) may include funded 

recipient expenditures that are subsequently disallowed through program review or audit 

processes. In the opinion of management, the ultimate disposition of these matters will not have 

a material effect on the FSA’s financial position.

Note 15. Subsequent Event

FSA announced in October 2021 significant changes to some of the eligibility criteria and 

potential forgiveness of loans as part of the PSLF program. The PSLF Program provides debt 

relief to teachers, nurses, firefighters, servicemembers and others serving their communities. By 

cancelling loans after 10 years of public service, PSLF removes the burden of student debt on 

public servants. Policy changes to be implemented in FY 2022 will result in 22,000 borrowers 

who have consolidated loans—including previously ineligible loans—being immediately eligible 

for $1.74 billion in forgiveness without the need for further action on their part. Another 27,000 

borrowers could potentially qualify for an additional $2.82 billion in forgiveness if they certify 

additional periods of employment. All told, FSA estimates that over 550,000 borrowers who 

have previously consolidated their loans will see an increase in qualifying payments with the 

average borrower receiving another two years of progress toward forgiveness. Many more will 

also see progress as borrowers consolidate into the Direct Loan program and apply for PSLF, 

and as FSA rolls out other changes during FY 2022. FSA's financial statements do not include 

an estimate for impacts of the announced changes to the PSLF program eligibility criteria and 

potential forgiveness of loans.
192 Fiscal Year 2021 Annual Report | Federal Student Aid

Required Supplementary Information (Unaudited)

Required Supplementary Information (Unaudited)

 
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Fiscal Year 2021 Annual Report | Federal Student Aid 193

Required Supplementary Information (Unaudited)

 
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Required Supplementary Information (Unaudited)

 
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Required Supplementary Information (Unaudited)

 
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Required Supplementary Information (Unaudited)

 
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Required Supplementary Information (Unaudited)

 
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Independent Auditors’ Report

Independent Auditors’ Report

Office of Inspector General Audit Transmittal
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Independent Auditors’ Report
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Independent Auditors’ Report

Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Independent Auditors’ Report
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Other Information

Other Information (Unaudited)
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Other Information

Other Information 

Summary of Financial Statement Audit and Management 

Assurances

Summary of Financial Statement Audit

Audit Opinion: Unmodified

Restatement: No

Material Weaknesses (See below)

Table 61: Material Weaknesses 

Material Weaknesses Beginning 

Balance New Resolved Consolidated Ending Balance

Total Material Weaknesses 1 0 0 0 1 

For details on the management assurances related to the FSA programs, please refer to the 

Analysis of Systems, Controls and Legal Compliance discussion in the Management’s 

Discussion and Analysis section of this document as well as the Summary of Financial 

Statement Audit and Management Assurances located in the Other Information section of 

the Department’s AFR.

Management Challenges

For details on FSA Management Challenges, please refer to the Office of Inspector General’s 

Management Challenges for FY 2021 Executive Summary found in the Other Information 

section located within the Department’s AFR. 

Payment Integrity

Payment Integrity Information Act Reporting

The Payment Integrity Information Act of 2019 (Pub. L. 116-117) requires federal agencies to 

report information annually on improper payments and unknown payments to the President and 

Congress. For improper payment and unknown payment information, FSA’s activities are part of 

an overall Departmental integrated reporting effort and reported on paymentaccuracy.gov. 

In FY 2021, the Federal Pell Grant and Direct Loan Programs are the FSA programs identified 

as susceptible to significant improper payments and OMB designated high priority programs.

FSA continues to place additional emphasis on these important programs as required by OMB 

guidance to ensure payment integrity and minimize improper payments and unknown payments. 

Details on FSA’s Federal Pell Grant and Direct Loan sampling and estimation methodologies, 

improper payment and unknown payment estimates, root causes, and corrective actions can be 

found at paymentaccuracy.gov. 
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Appendices

Appendices
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Appendices

Appendix A: Performance Metrics and Target 

Changes

FSA implemented an annual update to the strategic plan in FY 2021 and highlighted any shifts 

in performance metrics resulting from the analysis of outcomes, success criteria, and other 

evidence.

Appendix A includes the performance metrics that were revised and discontinued, and the 

metric targets that were changed during the strategic plan annual update. Six metrics were 

revised, and six metrics were discontinued during the annual update effort. 

Strategic Goal 1: Empower a High-Performing Organization

Table 62: Performance Metric and/or Target Change (Metric 1.2.B)

Performance Metric 1.2.B Status: Changed 

Current title: Development of a multi-year, targeted, training and 

development plan.

Type of change: Metric language and target changed. 

New title (if applicable) Conduct targeted multi-year training based on identified 

workforce needs.

Justification The revised target reflects the expected outcomes of the 

Training & Development Plan.

Table 63: Performance Metric and/or Target Change (Metric 1.2.C) 

Performance Metric 1.2.C Status: Changed 

Current title: Perform a training analysis at each performance review 

period within the fiscal period.

Type of change: Target changed.

New title (if applicable) N/A

Justification The revised target reflects more closely the industry 

standard for course satisfaction ratings of 80%.

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

Borrowers We Serve

Table 64: Performance Metric and/or Target Change (Metric 2.2.B) 

Performance Metric 2.2.B Status: Changed 

Current title: Number of borrowers who view their aid summary 

information on StudentAid.gov.

Type of change: Target changed.

New title (if applicable) N/A

Justification The revised target reflects the 10% increase over the FY 

2020 baseline.
220 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Table 65: Performance Metric and/or Target Change (Metric 2.2.C) 

Performance Metric 2.2.C Status: Changed 

Current title: Number of users of “Aidan,” the StudentAid.gov virtual 

assistant.

Type of change: Target changed.

New title (if applicable) N/A

Justification Aidan has already surpassed 1.2 million users in FY 2021 

Quarter 3.

Table 66: Performance Metric and/or Target Change (Metric 2.2.D) 

Performance Metric 2.2.D Status: Discontinued 

Current title:

Number of borrowers who complete their annual certification 

on time for the Annual Student Loan Acknowledgement 

(ASLA). 

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification Borrowers are not required to complete the ASLA. 

Table 67: Performance Metric and/or Target Change (Metric 2.2.E) 

Performance Metric 2.2.E Status: Changed 

Current title: Transactional email volume for outreach and 

communications to customers. 

Type of change: Metric language, target, and identifier changed.

New title (if applicable) Transactional email volume for outreach and 

communications to customers.

Justification

Transactional emails are being sent to a larger group of 

customers, not just borrowers. Identifier changed from 2.2.E 

to 2.2.D due to discontinued 2.2.D.

Table 68: Performance Metric and/or Target Change (Metric 2.2.F) 

Performance Metric 2.2.F Status: Changed 

Current title: Recurring campaign email delivery volume for outreach and 

communications to customers. 

Type of change: Metric language, target, and identifier changed.

New title (if applicable) Recurring campaign email delivery volume for outreach and 

communications to customers.

Justification

Transactional emails are being sent to a larger group of 

customers, not just borrowers. Identifier changed from 2.2.F 

to 2.2.E due to discontinued 2.2.D.
Fiscal Year 2021 Annual Report | Federal Student Aid 221

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Table 69: Performance Metric and/or Target Change (Metric 2.2.G) 

Performance Metric 2.2.G Status: Changed 

Current title: American Customer Satisfaction Index (ACSI) Aid Lifecycle 

Survey score.

Type of change: Identifier changed.

New title (if applicable) N/A

Justification The metric identifier changed from 2.2.G to 2.2.F due to 

discontinued 2.2.D.

Table 70: Performance Metric and/or Target Change (Metric 2.2.H) 

Performance Metric 2.2.H Status: Changed 

Current title: Customer Satisfaction Survey(s) for StudentAid.gov site and 

associated tools.

Type of change: Identifier changed.

New title (if applicable) N/A

Justification The metric identifier changed from 2.2.H to 2.2.G due to 

discontinued 2.2.D.

Table 71: Performance Metric and/or Target Change (Metric 2.4.A) 

Performance Metric 2.4.A Status: Changed 

Current title: Number of borrowers using Make a Payment feature to pay 

student loans.

Type of change: Target changed.

New title (if applicable) N/A

Justification Due to the COVID-19 administrative forbearance period, 

data is currently not available.

Table 72: Performance Metric and/or Target Change (Metric 2.4.B) 

Performance Metric 2.4.B Status: Changed 

Current title: Percentage of borrowers using auto-debit.

Type of change: Target changed.

New title (if applicable) N/A

Justification Due to the COVID-19 administrative forbearance period, 

data is currently not available.
222 Fiscal Year 2021 Annual Report | Federal Student Aid

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Table 73: Performance Metric and/or Target Change (Metric 2.4.C) 

Performance Metric 2.4.C Status: Changed 

Current title:

Percentage of Public Service Loan Forgiveness (PSLF) 

applicants who had used the PSLF Help Tool and who met 

the requirements for PSLF.

Type of change: Metric language and target changed.

New title (if applicable)

Percentage of users who start and complete the Public 

Service Loan Forgiveness (PSLF) Help Tool by generating a 

PSLF form.

Justification The PSLF Help Tool does not produce data on applicants 

who meet PSLF requirements. 

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness

Table 74: Performance Metric and/or Target Change (Metric 3.1.B) 

Performance Metric 3.1.B Status: Changed 

Current title: Number of Borrower Defense (BD) applications adjudicated 

(subject to existing BD regulations).

Type of change: Target changed.

New title (if applicable) N/A

Justification Pending administrative action has impacted the number of 

cases currently eligible for adjudication.

Table 75: Performance Metric and/or Target Change (Metric 3.2.A) 

Performance Metric 3.2.A Status: Changed 

Current title:

FSA will provide comprehensive training and/or specialized 

technical assistance to its participating schools that receive 

Title IV Aid on behalf of students.

Type of change: Metric language and target changed.

New title (if applicable) FSA will measure institutional participation rates in Title IV 

training and specialized technical assistance programs.

Justification Combined 3.2.A. & 3.2.B. into one metric.

Table 76: Performance Metric and/or Target Change (Metric 3.2.B) 

Performance Metric 3.2.B Status: Discontinued 

Current title: FSA will measure Partner Participation rates in training 

programs.

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification Combined 3.2.A. & 3.2.B. into one metric.
Fiscal Year 2021 Annual Report | Federal Student Aid 223

Appendices

Table 77: Performance Metric and/or Target Change (Metric 3.2.C) 

Performance Metric 3.2.C Status: Changed 

Current title:

FSA will enhance the self-service training resource and 

informational platform to improve communication with 

participating partners, including schools, third-party 

servicers, and financial institutions.

Type of change: Identifier changed.

New title (if applicable) N/A

Justification The identifier changed from 3.2.C to 3.2.B due to 

discontinued 3.2.B.

Table 78: Performance Metric and/or Target Change (Metric 3.2.D) 

Performance Metric 3.2.D Status: Changed 

Current title: Ease of doing business with FSA.

Type of change: Identifier changed.

New title (if applicable) N/A

Justification The identifier changed from 3.2.D to 3.2.C due to 

discontinued 3.2.B.

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

Table 79: Performance Metric and/or Target Change (Metric 5.1.B) 

Performance Metric 5.1.B Status: Discontinued 

Current title: Timeliness of FSA’s response to statutorily mandated 

reports.

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification

The Department’s Office of Legislation and Congressional 

Affairs has responsibility for completing statutorily mandated 

reports.

Table 80: Performance Metric and/or Target Change (Metric 5.1.C) 

Performance Metric 5.1.C Status: Changed 

Current title: Outstanding Direct Loan Portfolio in Current Repayment 

Status.

Type of change: Target and identifier changed.

New title (if applicable) N/A

Justification

Due to the COVID-19 administrative forbearance period, 

data is currently not available. The identifier changed from 

5.1.C to 5.1.B due to discontinued 5.1.B.
224 Fiscal Year 2021 Annual Report | Federal Student Aid

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Table 81: Performance Metric and/or Target Change (Metric 5.1.D) 

Performance Metric 5.1.D Status: Discontinued 

Current title: Percentage of borrowers who are in a positive repayment 

status within the first three years of student loan repayment.

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification Due to the COVID-19 administrative forbearance period, 

data is currently not available.

Table 82: Performance Metric and/or Target Change (Metric 5.1.E) 

Performance Metric 5.1.E Status: Changed 

Current title: Persistence among first-time filing aid recipients.

Type of change: Identifier changed.

New title (if applicable) N/A

Justification The identifier changed from 5.1.E to 2.1.D.

Table 83: Performance Metric and/or Target Change (Metric 5.2.C) 

Performance Metric 5.2.C Status: Discontinued 

Current title: Error rate discovered through income verification activities 

for borrowers on an Income Driven Repayment (IDR) plan.

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification

After implementation of the FUTURE Act, FSA will have the 

ability to use the Data Retrieval Tool (DRT) function to verify 

borrower incomes.

Table 84: Performance Metric and/or Target Change (Metric 5.3.B) 

Performance Metric 5.3.B Status: Changed 

Current title: Default Rate by borrower count.

Type of change: Target changed.

New title (if applicable) N/A

Justification Due to the COVID-19 administrative forbearance period, 

data is currently not available.
Fiscal Year 2021 Annual Report | Federal Student Aid 225

Appendices

Table 85: Performance Metric and/or Target Change (Metric 5.3.C) 

Performance Metric 5.3.C Status: Changed 

Current title: Percent of Borrowers > 90 Days Delinquent.

Type of change: Target changed.

New title (if applicable) N/A

Justification Due to the COVID-19 administrative forbearance period, 

data is currently not available.

Table 86: Performance Metric and/or Target Change (Metric 5.3.E) 

Performance Metric 5.3.E Status: Discontinued 

Current title: Percentage of customers who borrow less than the 

maximum loan amount.

Type of change: Metric discontinued.

New title (if applicable) N/A

Justification

It is a priority of the Department to expand access to 

postsecondary educational opportunities and student 

financial assistance, while reducing student debt.

Table 87: Performance Metric and/or Target Change (Metric 5.4) 

Performance Metric 5.4 Status: Changed 

Current title: Percentage of quality assurance reviews for the external 

workforce (servicers) reviewed annually.

Type of change: Metric language and target changed.

New title (if applicable) Conduct three vendor examinations annually.

Justification

This metric is expanding its scope from the review of loan 

servicers to all vendors (servicers, call centers, and 

collections).
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Fiscal Year 2021 Annual Report | Federal Student Aid 227

Appendices

Appendix B: Data Validation and Verification Matrix

Appendix B provides data validation and verification information for all performance metrics 

included within the five Strategic Goals of the current FSA strategic plan.

Strategic Goal 1: Empower a High-Performing Organization

Table 88: Performance Data Validation and Verification for Metric 1.1

Performance Metric 1.1

Improve Federal Employee Viewpoint Survey score: 

Employee Engagement Index. FSA’s scores will improve the 

first year and continue to increase 1–2% annually.

Data Source FY 2021 FEVS survey.

Data Validation and Verification

OPM has been conducting FEVS since 2002 and maintains a 100 

percent accuracy rate for employee security and data integrity. One 

limitation is that the survey results are provided in real time, and there is 

at least a one quarter delay in receipt by agencies. This may limit the 

true interpretation of the data, in that leadership changes, employee 

attrition and a shift in organizational priorities may impact the relevance 

of the data. FSA will continue using focus group data to assist with 

employee engagement and other organizational improvements based

on feedback.

Table 89: Performance Data Validation and Verification for Metric 1.2.A

Performance Metric 1.2.A

Identification, validation, assessment, and prioritization of 

skill competencies, required grades, and strategic 

alignment in accordance with the workforce requirements 

study results.

Data Source

U.S. Department of Interior Business Center Payroll/Personnel Data, 

qualitative interview, and resource information from internal FSA 

sources.

Data Validation and Verification

Data from FSA’s internal personnel system provided an organizational 

resource picture (i.e., the number of staff onboard by organization, 

occupation, grade, and/or other attributes) for approximately 1,225 

positions, or roughly 85% of the FSA workforce in the study baseline. 

Front offices were not included in the analysis based on nature of their 

work, small sizes, and standard staffing patterns. The required number 

of staff per organizational business unit, from which specific staffing 

needs can be computed, was generated from a staffing dashboard 

developed by FSA’s contractor. The needs or staffing gap computation 

utilizes current staffing onboard and required staffing determined by the 

study to derive a numeric and percentage staffing gaps for each 

organizational element covered by the study. 

The Study results can also be used to assist FSA with tools that will 

enable tracking of full-time equivalent staff and financial execution (i.e., 

average onboard staffing and aggregate salaries over the course of a 

fiscal year). This calculation, in conjunction with the staffing gap 

computation, will provide a more accurate picture of FSA's 

requirements and capabilities beyond the historical onboard staffing 

snapshots that have typically been produced.
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Appendices

Table 90: Performance Data Validation and Verification for Metric 1.2.B

Performance Metric 1.2.B Conduct targeted multi-year training based on identified 

workforce needs.

Data Source FedTalent system and FSA’s internal evaluation database.

Data Validation and Verification

FedTalent, the Department of Education’s learning management 

system, was used as the primary source to track individual and 

cumulative training completion data. Courses, whether virtual instructorled or self-paced, are placed in the LMS. Course completions are also 

tracked through participant self-certification by a course code provided 

to and submitted by participants or checkbox marker, learning platform 

attendance records, or facilitator attendance records. These data 

sources are inputted into FedTalent by course and cross-referenced 

through the LMS and the FSA internal evaluation database.

Table 91: Performance Data Validation and Verification for Metric 1.2.C

Performance Metric 1.2.C Perform a training analysis at each performance review 

period within the fiscal period.

Data Source Course evaluations, facilitator observations, FSA’s internal evaluation 

database, and SurveyMonkey.

Data Validation and Verification

FSA used an internal evaluation database and SurveyMonkey to 

collect, track and compare data across training iterations to identify 

various performance trends. FSA courses used various assessment 

instruments and data sets such as formative and summative data 

collection mechanisms, Kirkpatrick Level evaluations, participant 

anecdotal feedback, and after-action briefings/reports. To gauge 

participant knowledge within these specified trainings and allow for the 

application of learning to address real-life situations or leadership 

problems/challenges Kirkpatrick Level evaluations were administered

during and/or post-training.

For the managerial trainings and developmental programs directed at 

enhancing leadership competencies, action-based learning through 

individual activities, group capstone projects, and/or course Level 1 

evaluations were used. The limitations of the data are that the analysis 

of results was administered to a subset of trainings offered in 

specialized areas in FY 2021. The analysis will need to broaden to 

increase the results-based approach beyond knowledge acquisition to 

behavioral change to support the training investment across the 

enterprise.
Fiscal Year 2021 Annual Report | Federal Student Aid 229

Appendices

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

Borrowers We Serve 

Table 92: Performance Data Validation and Verification for Metric 2.1.A

Performance Metric 2.1.A Number of visits (sessions) demonstrating adoption of the 

updated StudentAid.gov site.

Data Source FSA’s online platform analytics.

Data Validation and Verification

The data is an absolute number so no calculation and methodology are 

performed. The metric is a direct reflection of the data platform 

analytics. FSA constantly monitors the analytics platform to ensure the 

system is secure and the query results are consistent. The metric value 

is based on the number of visits (as opposed to unique visitors or page 

views). FSA operational systems have procedures in place to address 

potential data quality issues. 

The process for querying system data is consistent and disciplined. A 

separate data analyst from a different office within FSA validates the 

accuracy of the query and the resulting data and validates any 

anomalous data. The Customer Analytics Group is responsible for the 

primary calculation of the metric as well as the technical validation of 

the metric, which is done by reviewing for accuracy the query used to 

pull the data.

Table 93: Performance Data Validation and Verification for Metric 2.1.B

Performance Metric 2.1.B Percentage of high school seniors submitting the FAFSA.

Data Source FSA’s online platform analytics.

Data Validation and Verification

FSA operational systems have procedures in place to address potential 

data quality issues. The process for querying system data is consistent 

and disciplined. A separate data analyst from a different office within 

FSA validates the accuracy of the query and the resulting data and 

validates any anomalous data. Queries and calculations are 

simultaneously conducted on data from previous years by FSA’s 

Business Intelligence Team to ensure technical definitions remain 

consistent. The Customer Analytics Group is responsible for the 

primary calculation of the metric as well as the technical validation of 

the metric, which is done by reviewing for accuracy the query used to 

pull the data and all calculations made with the data. 

The data is pulled from the FSA’s Central Processing System. Finally, 

the Financial Reporting and Analysis Branch is responsible for ensuring 

that documentation is complete and archived. These calculations also 

restrict the application period to the first nine months of the application 

cycle (through the close of the fiscal year) rather than the entire 18 

months. Since most applicants, including high school seniors, file their 

FAFSA prior to the start of the upcoming academic year (usually before 

fiscal year end), this decision better aligns the performance metric with 

the fiscal year where most of the performance occurred.
230 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Table 94: Performance Data Validation and Verification for Metric 2.1.C

Performance Metric 2.1.C Number of customers submitting the FAFSA via a mobile 

platform—the myStudentAid mobile app or fafsa.gov.

Data Source FSA’s online platform analytics.

Data Validation and Verification

The data is an absolute number so no calculation and methodology are 

performed. The metric is a direct reflection of the data platform 

analytics. FSA constantly monitors the analytics platform to ensure the 

system is secure and the query results are consistent. FSA operational 

systems have procedures in place to address potential data quality 

issues. The process for querying system data is consistent and 

disciplined.

A separate data analyst from a different office within FSA validates the 

accuracy of the query and the resulting data and validates any 

anomalous data. The Customer Analytics Group is responsible for the 

primary calculation of the metric as well as the technical validation of 

the metric, which is done by reviewing for accuracy the query used to 

pull the data 

Table 95: Performance Data Validation and Verification for Metric 2.1.D

Performance Metric 2.1.D Persistence among first-time filing aid recipients.

Data Source EDWA and Central Processing System.

Data Validation and Verification

Data results are ascertained through standardized system queries. 

These queries are used to rerun and match calculations for earlier 

cycles as part of the verification and validity assessment. 

Table 96: Performance Data Validation and Verification for Metric 2.2.A

Performance Metric 2.2.A Number of customers checking loan balances via the 

myStudentAid mobile app.

Data Source FSA’s online platform analytics.

Data Validation and Verification

The data is an absolute number as the number of customers checking 

their loan balances, so no calculation and methodology are 

performed. This metric is a direct reflection of the data platform 

analytics. FSA monitors to ensure the system is secure and the query 

results are consistent. FSA operational systems have procedures in 

place to address potential data quality issues. The process for querying 

system data is consistent and disciplined.

A separate data analyst from a different office within FSA validates the 

accuracy of the query and the resulting data and validates any 

anomalous data. The Customer Analytics Group is responsible for the 

primary calculation of the metric as well as the technical validation of 

the metric, which is done by reviewing for accuracy the query used to 

pull the data. 
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Appendices

Table 97: Performance Data Validation and Verification for Metric 2.2.B

Performance Metric 2.2.B Number of borrowers who view their aid summary 

information on StudentAid.gov.

Data Source FSA’s online platform analytics.

Data Validation and Verification

The data is an absolute number as the value is based on the number of 

users (as opposed to sessions or page views), so no calculation and 

methodology are performed. This metric is a direct reflection of the data 

platform analytics. FSA monitors to ensure the system is secure and 

the query results are consistent. FSA operational systems have 

procedures in place to address potential data quality issues. The 

process for querying system data is consistent and disciplined.

A separate data analyst from a different office within FSA validates the 

accuracy of the query and the resulting data and validates any 

anomalous data. The Customer Analytics Group is responsible for the 

primary calculation of the metric as well as the technical validation of 

the metric, which is done by reviewing for accuracy the query used to 

pull the data. 

Table 98: Performance Data Validation and Verification for Metric 2.2.C

Performance Metric 2.2.C Number of users of “Aidan,” the StudentAid.gov virtual 

assistant.

Data Source FSA’s online platform analytics.

Data Validation and Verification

This metric is a direct reflection of the data platform analytics. FSA 

monitors to ensure the system is secure and the query results are 

consistent. The total users are defined as individuals that interact with 

Aidan beyond the initial greeting button prompt provided to customers. 

An FSA contractor performs a two-step validation of the Aidan data in 

the DCC Tableau system prior to sharing with FSA. 

Table 99: Performance Data Validation and Verification for Metric 2.2.D

Performance Metric 2.2.D Transactional email volume for outreach and 

communications to customers.

Data Source Digital Communications Tool & Marketing Communications Platform. 

Data Validation and Verification

There is no calculation necessary for this metric. It is reported by 

the MCP system. Several data analysts pull the system data, and a 

data analyst validates the numbers.
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Appendices

Table 100: Performance Data Validation and Verification for Metric 2.2.E

Performance Metric 2.2.E Recurring campaign email delivery volume for outreach and 

communications to customers.

Data Source Digital Communications Tool & Marketing Communications Platform

Data Validation and Verification

There is no calculation necessary for this metric. It is reported by 

the MCP system. Several data analysts pull the system data, and a 

data analyst validates the numbers. 

Table 101: Performance Data Validation and Verification for Metric 2.2.F

Performance Metric 2.2.F American Customer Satisfaction Index (ACSI) Aid Lifecycle 

Survey score.

Data Source

Multiple Servicer Survey, FAFSA.gov (housed on StudentAid.gov), 

and (federal student aid recipients) In-School customer satisfaction 

survey. 

Data Validation and Verification

Traditionally, the ACSI survey has been conducted annually for FSA’s 

major programs. The index provides a national, cross-industry, crosssector economic indicator, using widely accepted methodologies to 

obtain standardized customer satisfaction information. Survey scores 

are indexed on a 100-point scale. The ACSI scores for application, inschool experience, and servicing are weighted by the utilization of each 

process/service and the intensity of the service provided. This metric is 

a direct reflection of the data collected through the ACSI Aid Life Cycle 

Survey. 

FSA monitors to ensure the system is secure and the query results are 

consistent. This metric is calculated by using weighted customer 

satisfaction scores from the Multiple Servicer Survey, FAFSA.gov and 

the In-School customer satisfaction survey. Several data analysts pull 

the data, and a data analyst validates the numbers. 

Table 102: Performance Data Validation and Verification for Metric 2.2.G

Performance Metric 2.2.G Customer Satisfaction Survey(s) for StudentAid.gov site 

and associated tools.

Data Source N/A 

Data Validation and Verification N/A
Fiscal Year 2021 Annual Report | Federal Student Aid 233

Appendices

Table 103: Performance Data Validation and Verification for Metric 2.3.A

Performance Metric 2.3.A Quality Standard for Average Speed to Answer (ASA) at all 

Call Centers.

Data Source Federal servicers’ quarterly reports.

Data Validation and Verification

The verification and validation of performance by the nondefault federal 

student loan servicers is conducted by FSA and includes (but is 

not limited to): (1) review and validation of federal servicer reports; (2) 

ongoing/recurring quality assurance discussion with federal servicers; 

(3) site visits to federal servicer call center sites; and (4) documented 

on-phone (“mystery caller”) evaluations of services. Because the 

agency directive is succinct and builds on current contractor operational 

capabilities, FSA does not anticipate anomalous data or issues with 

implementation. However, in cases where verification and validation 

detect anomalies that suggest less-than-complete information, FSA will 

address any deficiencies through direct contact with federal servicers, 

requests for information, audits, site visits, and/or other assessment 

measures of performance, as applicable.

Table 104: Performance Data Validation and Verification for Metric 2.3.B

Performance Metric 2.3.B Quality Standard for Abandon Rate (AR) for Incoming Calls 

at all Call Centers.

Data Source The Federal servicers’ quarterly reports.

Data Validation and Verification

The verification and validation of performance by the nondefault federal 

student loan servicers is conducted by FSA and includes (but is not 

limited to): (1) review and validation of federal servicer reports; (2) 

ongoing/recurring quality assurance discussion with federal servicers; 

(3) site visits to federal servicer call center sites; and (4) documented 

on-phone (“mystery caller”) evaluations of services. Because the 

agency directive is succinct and builds on current contractor operational 

capabilities, FSA does not anticipate anomalous data or issues with 

implementation. However, in cases where verification and validation 

detect anomalies that suggest less-than-complete information, FSA will 

address any deficiencies through direct contact with federal servicers, 

requests for information, audits, site visits, and/or other assessment 

measures of performance, as applicable.
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Appendices

Table 105: Performance Data Validation and Verification for Metric 2.4.A

Performance Metric 2.4.A Number of borrowers using Make a Payment feature to pay 

student loans.

Data Source DCC Web Logs. 

Data Validation and Verification

No calculation is necessary as the data is an absolute number reported 

to FSA from the DCC Web Logs. This figure represents the number of 

student loan payments made on StudentAid.gov. FSA is unable to 

provide the unique number of customers who made payments. A 

separate data analyst pulls the data and then a different analyst pulls 

the data independently to validate the accuracy of the information and 

any anomalous data. 

Table 106: Performance Data Validation and Verification for Metric 2.4.B

Performance Metric 2.4.B Percentage of borrowers using auto-debit. 

Data Source NSLDS® database.

Data Validation and Verification

Enrollment in auto debit is reported by federal loan servicers to the 

NSLDS database. Accuracy of that data is validated by FSA using 

NSLDS monitoring techniques. NSLDS queries will provide the volume 

of borrowers enrolled in Automatic Direct Debit (auto debit) and the total 

volume of borrowers in repayment. The auto debit volume will be 

divided by the total borrowers in repayment volume and rounded to 

1/10th percent to calculate auto debit percentage. NSLDS queries and 

calculations are validated by FSA's Data Review Team for accuracy. 

Table 107: Performance Data Validation and Verification for Metric 2.4.C

Performance Metric 2.4.C

Percentage of users who start and complete the Public 

Service Loan Forgiveness (PSLF) Help Tool by generating a 

PSLF form.

Data Source COD Portal

Data Validation and Verification

The source of the data is on the COD Portal and provided by an FSA 

contract resource. The contractor assists with the monitoring of PSLF 

Help Tool usage and which form is generated based on customer 

interaction with the PSLF Help Tool.
Fiscal Year 2021 Annual Report | Federal Student Aid 235

Appendices

Strategic Goal 3: Increase Partner Engagement and Oversight Effectiveness

Table 108: Performance Data Validation and Verification for Metric 3.1.A

Performance Metric 3.1.A

FSA will annually conduct an Institutional Review for its 

participating partners including schools, third-party 

servicers, and financial institutions.

Data Source PEPS 

Data Validation and Verification

Metric calculations are based on data extracts from the data system. 

The data extracts are subject to quality checks and validation. After 

data are compiled, a staff member reviews the queries and formulas to 

ensure proper functioning and correct counting reviews/schools. Since 

PPO may perform more than one compliance review of an institution 

during a fiscal year, the data are de-duplicated to ensure an institution 

is counted only once. The count of unduplicated institutions for whom 

PPO performed a compliance review is compared with an unduplicated 

count of participating institutions to calculate the actual percentage for 

this performance metric.

Table 109: Performance Data Validation and Verification for Metric 3.1.B

Performance Metric 3.1.B Number of Borrower Defense (BD) applications adjudicated 

(subject to existing BD regulations).

Data Source Customer Engagement Management System

Data Validation and Verification

Weekly production data is derived from the borrower defense case 

management platform which tracks progress and status of borrower 

defense applications through intake, adjudication, borrower notification, 

and loan servicer documentation on effectuated loan relief, where 

applicable. Weekly data verification reviews are coordinated among the 

business unit and FSA’s enterprise data office. This production data is 

reported in weekly performance metrics evaluated by FSA and 

Department Senior Leadership.
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Appendices

Table 110: Performance Data Validation and Verification for Metric 3.2.A

Performance Metric 3.2.A FSA will measure institutional participation rates in Title IV 

training and specialized technical assistance programs

Data Source FSA LMS, PEPS, eZ-Audit, PCnet, FSA Data Center, and NSLDS

database. 

Data Validation and Verification

The activity is primarily a manual count (e.g., manual inbox count of 

Ask-a-Fed email inquiries), but FSA does remove duplicate OPEIDs to 

ensure its participation rate is non-duplicative. OPEID is self-reported 

by users of the training system. Reports run in the LMS 

(fsatraining.ed.gov) identify users of the site. The report is exported to 

Excel and manipulated to remove users without an OPEID and 

duplicate OPEIDs. The Federal Student Aid Training Center registrant 

data is also received from the conference team. 

Data is pulled from CVENT for registrants at state and regional 

association conferences where TISG staff presented. This data is 

merged with the LMS data to produce a list of OPEIDs who have 

received training. To minimize errors, the assessment process consists 

of batch loading the performance data in excel spreadsheets from the 

source databases into the Salesforce assessment tool. 

The quality of the data is impacted because not all instances of 

technical assistance and support have been tracked historically by FSA. 

Data collection from multiple systems using differing demographic 

points (e.g., user reported school name variances, branch campus 

OPEID v Main Campus) and manual counts of user emails can affect 

the consistency of the information used for analysis. 

Table 111: Performance Data Validation and Verification for Metric 3.2.B

Performance Metric 3.2.B

FSA will enhance the self-service training resource and 

informational platform to improve communication with 

participating partners, including schools, third-party 

servicers, and financial institutions.

Data Source FSA LMS.

Data Validation and Verification

This performance metric is a numerical count of changes within a 

defined electronic training environment. The TISG tracks additions, 

modifications, and removals within the FSA Training Center 

(fsatraining.ed.gov). 
Fiscal Year 2021 Annual Report | Federal Student Aid 237

Appendices

Table 112: Performance Data Validation and Verification for Metric 3.2.C

Performance Metric 3.2.C Ease of doing business with FSA.

Data Source FY 2021 Schools Partners Survey.

Data Validation and Verification

This performance metric is based on calculations from CFI Group. The 

FSA project officer verifies the FY 2021 School Partners survey scores 

for the Ease of Doing Business with FSA metric and coordinated 

validation through FSA Data Review Team. The survey contractor 

collects this data and calculates the results and presents findings and 

conclusions to FSA.

Strategic Goal 4: Strengthen Data Protection and Cybersecurity Safeguards

Table 113: Performance Data Validation and Verification for Metric 4.1

Performance Metric 4.1

Increase partner/vendor cybersecurity effectiveness by 

reducing the total number of FSA system assessment 

findings by 20% per year.

Data Source FSA Enterprise Cybersecurity Group, Department Cybersecurity 

Assessment and Management Shared Service.

Data Validation and Verification

The data for this performance metric is provided by the assessments 

conducted and utilized by the OCIO for the Department’s monthly 

cybersecurity scorecard. Data is verified through the assessment 

process as defined by the National Institute of Standards and 

Technology, the Department, and FSA guidance. The plan of action 

and milestone is a description of the vulnerability findings using the 

National Vulnerability Database.

Table 114: Performance Data Validation and Verification for Metric 4.2.A

Performance Metric 4.2.A

Increase Institutions of Higher Education cybersecurity 

effectiveness by reducing GLBA cybersecurity noncompliance by 20% per year.

Data Source The record of GLBA Audits managed by Partner Connect. 

Data Validation and Verification

The performance metric is a numerical count of the cybersecurity 

related audit findings. The finding count is provided by the Partner 

Connect staff and verified against the findings posted in eZ-Audit by the 

Technology Directorate.
238 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Table 115: Performance Data Validation and Verification for Metric 4.2.B

Performance Metric 4.2.B Reduce incident reporting time at Institutions of Higher 

Education. 

Data Source Self-reports from the schools, discovery through media reports, and 

information derived from internet research activities.

Data Validation and Verification

The calculation of this performance metric is from the date, hour, and 

minute that the school detected the event to the time that FSA receives 

the report. In the event the school does not provide the information, the 

time is calculated from the time FSA discovers the cybersecurity 

incident and the time that FSA is able to contact the appropriate school 

point of contact at the institution. The data is verified through a manual 

audit process comparing the security event report received from the 

school and the data discovered through incident response process with 

the data within SecOps.

Table 116: Performance Data Validation and Verification for Metric 4.3

Performance Metric 4.3

Decrease the number of employee-related cybersecurity 

events associated with inappropriate use, distribution, or 

storage of Personally Identifiable Information (PII) and 

financial information by 20% a year.

Data Source FSA SecOps, email reports, exercise results, and OCIO DLP metrics. 

Data Validation and Verification

The performance metric is a numerical count of events-based exercise 

results and actual incident reports over time. The data is validated 

through a manual review of automated reports from SecOps, which 

provide the test results for the cybersecurity exercises administer to 

employees.

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

Table 117: Performance Data Validation and Verification for Metric 5.1.A

Performance Metric 5.1.A Initiate monthly reporting to the public through the FSA 

data center.

Data Source FSA Data request process and queries 

Data Validation and Verification

FSA leverages a data request process to ensure queries are written by 

one subject matter expert and validated separately by a second subject 

matter expert to help ensure consistency and accuracy. Queries used 

to produce FSA Data Center reports are required to go through this 

data request process. Subject matter experts also review results prior to 

publication to help identify any potential areas of concern.
Fiscal Year 2021 Annual Report | Federal Student Aid 239

Appendices

Table 118: Performance Data Validation and Verification for Metric 5.1.B

Performance Metric 5.1.B Outstanding Direct Loan Portfolio in Current Repayment 

Status.

Data Source NSLDS database.

Data Validation and Verification

The calculation uses the rounded results appearing in the FSA Data 

Center’s Direct Loan Delinquency report. The fiscal year metric is a 

moving average of the four quarters. It is the outstanding principal and 

interest balance of “current” Direct Loans in the active repayment status 

divided by the total principal and interest balance of Direct Loans in an 

active repayment status at the non-default servicers. FSA validated the 

report when it was implemented, and subject matter experts review the 

results each month to assess data quality and initiate efforts to 

diagnose and resolve any anomalies.

Table 119: Performance Data Validation and Verification for Metric 5.2.A

Performance Metric 5.2.A

Using the Enterprise Risk Management (ERM) Maturity 

Model, move the organization towards a “Risk Intelligent” 

position. The model defines organizational progress in the 

following way: 

• 1 = Initial; 

• 2 = Fragmented; 

• 3 = Integrated; 

• 4 = Risk Intelligent.

Data Source Stakeholders’ surveys and ERM Maturity Matrix

Data Validation and Verification

The Risk Maturity Matrix is directly linked to the Committee of 

Sponsoring Organizations of the Treadway Commission ERM 

Framework, Enterprise Risk Management: Integrating with Strategy and 

Performance. The data is derived from surveys to stakeholders 

throughout the organization and is compiled and assessed against the 

ERM Maturity Matrix. The evaluation and validation of data is subjective 

within guidelines established by the model.

Table 120: Performance Data Validation and Verification for Metric 5.2.B

Performance Metric 5.2.B Implementation timeline for FUTURE Act. 

Data Source N/A

Data Validation and Verification

The FUTURE Act team continues to work closely with other offices 

within the Department, the IRS, and Treasury to establish a FUTURE 

Act implementation schedule. While the team has established a 

notional implementation schedule, all offices continue to work on critical 

dependencies to finalize the implementation schedule. Variances to the 

schedule caused by these dependences will impact the quality of the 

implementation timeline. The FUTURE Act team also works closely with 

the ERM Office to monitor any risks and limitations.
240 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Table 121: Performance Data Validation and Verification for Metric 5.3.A

Performance Metric 5.3.A Identify and provide intervention actions for customers at 

risk of default.

Data Source FSA’s project plans for each individual intervention project. 

Data Validation and Verification

This performance metric will leverage high-level project data as its 

source: the project plans FSA uses for each individual intervention 

project, and possibly include specific measures to be determined on a 

project-by-project basis. The projects within the default prevention 

definition are expected to use new interventions and actions to reduce 

customer risks, therefore it is necessary to first collect data on customer 

outcomes given they have received the new interventions and actions 

to support Contextual Bandits model training.

Different methodologies for initially collecting data have been designed 

and implemented in a reusable fashion. Contextual Bandits models 

have been designed to further collect required model training data, 

incorporating experimental design into the model development process. 

Data collected from projects for use in creating and updating models 

has a high probability of bias due to impacts from COVID-19, especially 

when analyzing outcomes of default, based on the CARES Act 

forbearance. 

Table 122: Performance Data Validation and Verification for Metric 5.3.B

Performance Metric 5.3.B Default rate by borrower count.

Data Source NSLDS database. 

Data Validation and Verification

The metric leverages a report that is used for several other purposes, 

including the public-facing FSA Data Center. The report methodology 

was validated through FSA’s Data Request Team in 2015. Because the 

nature of this metric is to compare to same quarter of earlier years and 

to calculate rolling four-quarter averages, this helps facilitate spotting 

anomalies. FSA also continues to monitor overall performance of the 

federal loan servicers to identify any areas where errors have occurred 

and notifies servicers of results and corrective actions as needed. By 

design, the data directorate is separated from the servicers' staff and 

systems, so there is currently no direct communication between EDD 

and loan servicers to verify servicer reporting. For this reason, the data 

directorate worked with the servicer monitoring team during FY 2020 

and FY 2021 to address reporting issues identified.
Fiscal Year 2021 Annual Report | Federal Student Aid 241

Appendices

Table 123: Performance Data Validation and Verification for Metric 5.3.C

Performance Metric 5.3.C Percent of borrowers > 90 days delinquent.

Data Source NSLDS database.

Data Validation and Verification

The calculation uses the rounded results appearing in the FSA Data 

Center’s Direct Loan Delinquency report. The fiscal year metric is a 

moving average of the four quarters. This allows FSA to account for 

changes relating to seasonality and indirect factors that could be false 

indicators of change. FSA also continues to monitor overall 

performance of the federal loan servicers to identify any areas where 

errors have occurred and notifies servicers of results and corrective 

actions as needed. 

Table 124: Performance Data Validation and Verification for Metric 5.3.D

Performance Metric 5.3.D Percentage of borrowers who did not make the first three 

payments.

Data Source EDWA servicing data.

Data Validation and Verification

EDWA receives data from the Direct Loan servicers over the Student 

Aid Internet Gateway connection/interface. Each Direct Loan servicer 

reports weekly, and not all on the same day. The Direct Loan servicers 

report on different days of the week to manage FSA’s operational 

burden. FSA monitors overall performance of the federal loan servicers 

to identify any areas where errors have occurred and notifies servicers 

of results and corrective actions as needed.

Table 125: Performance Data Validation and Verification for Metric 5.4

Performance Metric 5.4 Conduct three vendor examinations annually.

Data Source Internal OIO Reports. 

Data Validation and Verification The performance metric is calculated by the number of completed 

quality assurance reviews for all loan servicers.
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Appendices

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Fiscal Year 2021 Annual Report | Federal Student Aid 243

Appendices

Appendix C: Glossary of Acronyms and Terms

Acronym Description 

A

ABCP Conduit Asset-Backed Commercial Paper Conduit

ACSI American Customer Satisfaction Index

Acknowledgment Annual Student Loan Acknowledgment

AFGE American Federation of Government Employees

AFR U.S. Department of Education FY 2021 Agency Financial Report

Annual Report Federal Student Aid Fiscal Year (FY) 2021 Annual Report

APG Agency Priority Goal

AR Abandon Rate

ASA Average Speed to Answer

ATO Authorities to Operate

B 

BD Borrower Defense 

BDG Borrower Defense Group

Borrower Defense Borrower Defense to Repayment

BPO Business Process Operations

C

CAP Corrective Action Plan

CAIVRS Credit Alert Verification Reporting System

CARES Act Coronavirus Aid, Relief, and Economic Security Act

CDM Continuous Diagnostics and Mitigation

CDR Cohort Default Rate

Clery Act Jeanne Clery Disclosure of Campus Security Policy and Campus 

Crime Statistics Act

COD Common Origination and Disbursement

Congress U.S. Congress

COO Chief Operating Officer

COVID-19 Coronavirus Disease 2019
244 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Acronym Description 

C

CSRS Civil Service Retirement System

CUI Controlled Unclassified Information

D

DCC Digital Customer Care

DDB Death, Disability, and Bankruptcy

the Department U.S. Department of Education

Direct Loan William D. Ford Federal Direct Loan

DLP Data Leakage Prevention

DOL U.S. Department of Labor

E

ECASLA Ensuring Continued Access to Student Loans Act of 2008

EDD Enterprise Data Directorate

EDWA Enterprise Data Warehouse and Analytics

EEI Employee Engagement Index

ERM Enterprise Risk Management

e-QIP Electronic Questionnaires for Investigations Processing

F

FA-DDX FUTURE Act Direct Data Exchange interface

FAFSA® Free Application for Federal Student Aid®

FAFSA Simplification 

Act 

Free Application for Federal Student Aid (FAFSA) Simplification Act

FASAB Financial Accounting Standards Advisory Board

FCRA Federal Credit Reform Act of 1990

FECA Federal Employees’ Compensation Act

Federal Funds Federal Student Loan Reserve Funds

FERS Federal Employees Retirement System

FEVS Federal Employee Viewpoint Survey

FFEL Federal Family Education Loan 

FHA U.S. Federal Housing Administration 

FOIA Freedom of Information Act
Fiscal Year 2021 Annual Report | Federal Student Aid 245

Appendices

Acronym Description 

F

FSA Federal Student Aid

FSATC Federal Student Aid Training Center

FSEM Facilities, Security, and Emergency Management

FSEOG Federal Supplemental Educational Opportunity Grant

FTI Federal Tax Information

FUTURE Act Fostering Undergraduate Talent by Unlocking Resources for 

Education Act

FY Fiscal Year

FY 2018–22 Strategic 

Plan 

Department of Education Strategic Plan for Fiscal Year 2018–22

FY 2020–24 Strategic 

Plan 

Federal Student Aid: Strategic Plan Fiscal Years 2020–24 

G

GAAP Generally Accepted Accounting Principles

GAO Government Accountability Office

GLBA Gramm-Leach-Bliley Act

GPRA Modernization 

Act 

Government Performance and Results Modernization Act of 2010

H

HBCU Historically Black College or University

HCERA Health Care and Education Reconciliation Act of 2010

HEA Higher Education Act of 1965, as amended

HEAL Health Education Assistance Loan

I

IDR Income Driven Repayment

IHE Institution of Higher Education

IP Internet Protocol

IRC Internal Revenue Code

IRS Internal Revenue Service

IT Information Technology
246 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Acronym Description 

L 

LMS Learning Management System

M

MCP Marketing Communications Platform

Met Performance result met or exceeded target

MOU Memorandum of Understanding

MSI Minority-Serving Institution

MSURSD Minority-Serving Under-Resourced Schools Division

N

N/A Performance result is not applicable because the performance metric

was not developed, the performance metric was not implemented, or 

the required data were not available in time for inclusion.

Next Gen FSA Next Gen Federal Student Aid 

NFP Not-For-Profit 

Not met Performance result did not meet target

NSLDS® National Student Loan Data System

O

OCIO Office of the Chief Information Officer

OIG Office of Inspector General

OIO Operational Improvement and Oversight Directorate

OMB U.S. Office of Management and Budget

OMB Circular A-11 OMB Circular A-11, Preparation, Submission and Execution of the 

Budget, Part 6, Section 260

OMB Circular A-123 OMB Circular A-123, Management’s Responsibility for Enterprise 

Risk Management and Internal Control

OMB Circular A-123, 

Appendix A

OMB Circular A-123, Appendix A, Management of Reporting and 

Data Integrity Risk

OMB Circular A-136 OMB Circular A-136, Financial Reporting Requirements

OPEID Office of Postsecondary Education Identification

OPM U.S. Office of Personnel Management

P

Partner Connect FSA Partner Connect

PAYE Pay As You Earn
Fiscal Year 2021 Annual Report | Federal Student Aid 247

Appendices

Acronym Description 

P

PBO Performance-Based Organization

Pell Grant Federal Pell Grant Program

PEOS Partner Eligibility and Oversight Services Directorate

PEPS Postsecondary Education Participants System

PERM Partner Engagement & Relationship Management Group

PII Personally Identifiable Information

PLUS Parent Loan for Undergraduate Students

POE Principles of Excellence

PPO Office of Partner Participation and Oversight

President’s Budget Budget of the United States Government

Pub. L Public Law

PSLF Public Service Loan Forgiveness

S

SABER Student Aid & Borrower Eligibility Reengineering

SAR Satisfaction Assessment Rating

SSA U.S. Social Security Administration

SBR Statement of Budgetary Resources

Secretary Secretary of Education

SecOps Security Operations

SES Senior Executive Service

SULA Subsidized Usage Limit Applies

T

TEACH Grant Teacher Education Assistance for College and Higher Education 

Grant

TEDI Targeted Early Delinquency Intervention

TEPSLF Temporarily Expanded Public Service Loan Forgiveness

TISG Training and Information Services Group

Title IV Title IV of the Higher Education Act of 1965, as amended

TIVAS Title IV Additional Servicers

TPD Total and Permanent Disability
248 Fiscal Year 2021 Annual Report | Federal Student Aid

Appendices

Acronym Description 

T

TPDR Third-Party Debt Relief

Treasury U.S. Department of the Treasury

U

U.S. United States

V 

VA U.S. Department of Veterans Affairs

VOG Vendor Oversight Group
Fiscal Year 2021 Annual Report | Federal Student Aid 249

Appendices

Appendix D: Availability of the FSA Report

The Federal Student Aid Fiscal Year 2021 Annual Report and the Annual Reports from prior

years are available on the following websites:

• FSA: StudentAid.gov/strategic-planning-reporting

• The Department: http://www.ed.gov/about/reports/annual/index.html

The Federal Student Aid: Strategic Plan, Fiscal Years 2020–24 and prior years’ strategic plans 

are also available at StudentAid.gov/strategic-planning-reporting.

Stay connected to Federal Student Aid through social media: 

• Visit the FSA website: StudentAid.gov

• Like FSA on Facebook : Facebook.com/federalstudentaid

• Follow FSA on Twitter : @FAFSA

• Follow FSA on LinkedIn : linkedin.com/company/federalstudentaid

• Find FSA on YouTube : YouTube.com/user/federalstudentaid
Acknowledgments

The FSA FY 2021 Annual Report was prepared with the energies and talents of many Federal 

Student Aid employees. To these dedicated individuals, the Chief Operating Officer and Chief 

Financial Officer would like to offer their sincere appreciation and recognition.

In particular, we would like to recognize the following Federal Student Aid offices for their 

contributions:

• Finance Directorate. 

• Strategic Planning and Reporting Directorate. 

• Office of the Ombudsman. 

• Office of Strategic Communications. 

• COO Front Office. 

We also offer our sincerest thanks and acknowledgement to the staff of the following other 

offices within the Department of Education for their contributions: 

• Office of Finance and Operations. 

• Budget Service. 

• Office of the Secretary. 

• Office of Legislation and Congressional Affairs. 

• Office of Chief Information Officer. 

We would also like to acknowledge the Office of Inspector General and KPMG LLP for the 

professional manner in which they conducted the audit of the FY 2021 Financial Statements. 

The Federal Student Aid FY 2021 Annual Report

Federal Student Aid

A Principal Office of the U.S. Department of Education

Finance Directorate

November 2021