6 FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

challenges the Department faces from the perspective 

of the Department’s Office of Inspector General are 

provided in the Other Information section of the report.

AGENCY ACHIEVEMENTS AND LOOKING AHEAD 

The U.S. Department of Education’s mission is to 

promote student achievement and preparation for global 

competitiveness by fostering educational excellence 

and ensuring equal access. This mission is manifested 

in the Department’s efforts to continually improve the 

educational environment for all students, and address 

their education needs. The Department’s National 

Center for Education Statistics (NCES) estimates that 

50.7 million students are attending public elementary 

and secondary schools in the fall of 2017, with a 

projected 35.6 million in prekindergarten through grade 

8 and a projected 15.1 million in grades 9 through 12. 

An additional 5.2 million students are expected to attend 

private elementary and secondary schools. In fact, NCES 

predicts that the total P–12 enrollment will continue 

to grow to an all-time high of 56.8 million by 2026, 

indicating the increasing need for the highest quality 

agency performance. 

Looking to the future, the Department plans to focus in 

the key areas of: (1) supporting state and local efforts to 

improve learning outcomes for all P–12 students in every 

community; (2) expanding postsecondary education 

options and improving outcomes to foster economic 

opportunity and informed, thoughtful, and productive 

citizens; (3) strengthening the quality, accessibility, and 

use of education data through better management, 

increased privacy protections, and transparency; and (4) 

reforming the effectiveness, efficiency, and accountability 

of the Department.

SUPPORTING STATE AND LOCAL EFFORTS 

TO IMPROVE LEARNING OUTCOMES FOR 

P–12 STUDENTS

In March, the Department released a revised 

consolidated state plan template to support states 

in meeting the requirements of the Elementary 

and Secondary Education Act of 1965 (ESEA), as 

PERFORMANCE MANAGEMENT FRAMEWORK 

The Government Performance and Results 

Act Modernization Act of 2010 (GPRAMA)

requires agencies to establish a strategic plan that 

presents the long-term goals that the agency intends to 

accomplish. GPRAMA requires agencies to establish 

a four-year strategic plan at the beginning of each 

Administration. The Strategic Plan describes the key 

policy and operational priorities for the agency, detailing 

the Department’s strategic performance goals that will 

guide human capital and budget planning.

Throughout Fiscal Year (FY) 2017, the Department 

conducted a series of strategic planning meetings to 

develop the FY 2018–22 Strategic Plan. These meetings 

included a focus on capturing lessons learned and 

developing a framework for the new Strategic Plan. The 

Department also consulted with Congress and the Office 

of Management and Budget (OMB). The Department 

plans to publish the FY 2018–22 Strategic Plan with the 

President’s FY 2019 Budget in February 2018. Questions 

or comments about the Department’s performance 

management framework and reporting should be 

e-mailed to PIO@ed.gov.

INFORMATION IN THE AGENCY 

FINANCIAL REPORT

The Department has elected to produce separate financial 

and performance reports. The Agency Financial Report for 

FY 2017 provides a high-level description of performance 

measures and goals based on the FY 2014–18 Strategic 

Plan. A detailed discussion of performance information 

for FY 2017 will be provided in the Department’s Annual 

Performance Report to be released at the same time as the 

President’s FY 2019 Budget. The Department’s annual 

performance reports for prior years are available online. 

We also urge readers to seek programmatic data as it is 

reported in the Congressional Budget Justification, as 

well as on the web pages of individual programs.

The high-level discussion of performance information 

in this year’s AFR includes performance matters that 

inform decisions of the Department and its partners. 

Discussions about the most serious management 

THE DEPARTMENT’S APPROACH TO 

PERFORMANCE MANAGEMENT
FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

7

amended by the Every Student Succeeds Act (ESSA). The 

Department worked with state educational agencies 

(SEAs), and other state and local stakeholders, to develop 

a revised template that is structured to reduce burden 

and promote innovation, flexibility, transparency, and 

accountability, while maintaining essential protections 

for all students. The revised template asks states only 

to provide detail on their plans in areas (a) explicitly 

required by law and (b) deemed absolutely necessary 

for consideration of such a plan, consistent with ESEA 

section 8302(b)(3), leveraging input of states, local 

educators, and parents. State plans have been submitted 

to the Department, peer-reviewed, and approved. 

Looking Ahead: Every student—regardless of 

background or circumstance—deserves an opportunity 

to fulfill his or her potential. High-quality educational 

opportunities are critical when it comes to achieving 

that goal, especially for the most vulnerable students 

and communities. The President’s FY 2018 Budget is 

an indication of the commitment to support the most 

vulnerable. Level funding of the Title I Grants program

totaling $14.9 billion would be allocated to local 

educational agencies’ programs to support state and local 

efforts to ensure that more than 25 million students in 

high-poverty schools have access to rigorous coursework 

and teaching. Additionally, the federal investment in 

the Individuals with Disabilities Education Act

formula grant programs at $12.7 billion would support 

services to 6.8 million children with disabilities and 

to states to design and implement special education 

program improvement efforts under the Department’s 

Results Driven Accountability framework. The English 

Language Acquisition program would receive $736 

million to implement effective language instruction 

programs designed to help English learners attain English 

language proficiency. 

The Administration’s education priority is to help ensure 

every student in America has an equal opportunity for 

a great education by giving parents more control and 

greater options. The proposed FY 2018 budget includes 

a $167 million increase for the Charter Schools Grants 

program to strengthen state efforts to start new charter 

schools or expand and replicate existing high-performing 

charter schools while providing up to $100 million to 

meet the demand for charter school facilities.

The Department is also focused on promoting evidencebased decision making with the intention to support 

states and districts in using and building evidence 

effectively. To this end, in FY 2017, the Department 

published revised evidence definitions and related 

selection criteria for competitive grant programs 

in Education Department General Administrative 

Regulations that align with ESSA; disseminated 

nonregulatory guidance on evidence in ESSA, Using 

Evidence to Strengthen Education Investments, 

which contains a five-step decision-making framework 

that shapes evidence as a mechanism for continuous 

improvement and recommends criteria for each of the 

four evidence levels in ESSA; awarded $16 million to 

support rigorous evaluations and researcher-practitioner 

partnerships focused on state and local education 

priorities; and awarded 60-month contracts for nine 

Regional Educational Laboratories, which work in 

partnership with states and districts to bridge research, 

policy, and practice in education. 

EXPANDING POSTSECONDARY EDUCATION 

OPTIONS AND IMPROVING OUTCOMES 

With the passage of the FY 2017 spending bill, yearround Pell grants were restored, and the Department 

announced that these grants would become available 

to college students beginning July 1, 2017. The 

Department recommended that unless a student had 

remaining eligibility from the 2016–17 award year, 

institutions should award Pell Grant funds for this 

past summer out of the 2017–18 award year since the 

additional funding will be available later in the year (e.g., 

spring or summer of 2018). The change allows an eligible 

student to receive up to 150 percent of the student’s 

scheduled Pell Grant for an award year beginning with 

the 2017–18 award year. This change gives hundreds of 

thousands of college students more resources to finish 

their coursework in a timeframe meeting their individual 

needs. Students will be able to graduate more quickly and 

with less debt. 

The Department is transforming how Federal Student 

Aid (FSA) provides customer service to more than 42 

million student loan borrowers. FSA customers will 

transition to a new processing and servicing environment 

in 2019, providing a customer support system that will 

give a better experience for students and benefits for 

taxpayers. The FSA Next Generation Processing and 

Servicing Environment will provide for a single data 

processing platform to house all student loan information 

while also allowing for customer account servicing to 

be performed either by a single contract servicer or by 

multiple contract servicers. This approach is expected to 

require separate acquisitions for database housing, system 

processing, and customer account servicing, allowing 
8 FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

for maximum flexibility. These changes to the servicing 

and processing environment are expected to provide 

the opportunity for additional companies to submit 

proposals for contracting with FSA. 

The Department issued a reset, or pause, regarding 

two postsecondary regulations—Borrower Defense to 

Repayment, concerning forgiveness of student loan 

debt, and Gainful Employment, concerning educational 

programs that prepare students for gainful employment 

in a recognized occupation. Two negotiated rulemaking 

committees have been established to rethink these two 

higher education regulations, with the intent to develop 

fair, effective, and improved regulations to protect 

individual borrowers from fraud, ensure accountability 

across institutions of higher education, and protect 

taxpayer interests. It is the Department’s aim to protect 

students from predatory practices while also providing 

clear, fair, and balanced rules for colleges and universities 

to follow. 

Looking Ahead: Year-round Pell grants were proposed 

in the 2018 President’s Budget, which should safeguard 

and strengthen the Pell Grant program by level funding 

the discretionary appropriation and the year-round Pell 

grants. It is estimated that year-round Pell grants will 

increase aid available to eligible students by $16.3 billion 

over 10 years.

In an effort to address the fact that student loan financing 

can be confusing for millions of students and families 

who want to invest in postsecondary education, the 2018 

budget proposal lays out changes in repayment and loan 

forgiveness plans for new borrowers after July 1, 2018. 

The changes simplify loan repayment for students by 

replacing five different income-driven repayment plans 

with a single plan aimed at prioritizing expedited loan 

repayment for undergraduate borrowers. These changes 

will save taxpayers an estimated $143 billion over the 

next decade while insulating current borrowers from 

changes to their loan programs. Proposed funding of 

$492 million is intended to help close gaps among racial 

and socioeconomic groups in college enrollment and 

degree attainment by improving academic programs, 

institutional capacity and student support services for 

Historically Black Colleges and Universities, MinorityServing Institutions, and Hispanic-Serving Institutions. 

The proposed budget also provides $808.3 million for 

students from disadvantaged backgrounds, who are part 

of the Federal TRIO Programs and $219 million for 

those in the Gaining Early Awareness and Readiness 

for Undergraduate Programs. 

STRENGTHENING THE QUALITY, ACCESSIBILITY, 

AND USE OF EDUCATION DATA 

The Department’s College Scorecard supports 

postsecondary students by providing the public with 

clear, easily accessible, and critical information on 

college performance. Feedback from the intended 

users—students, parents, counselors, and others—helps 

determine the design of the site and the information it 

contains. The College Scorecard integrates self-reported 

data from institutions of higher education collected by 

NCES with administrative data from FSA and U.S. 

Department of Treasury’s tax data. The Department 

established a data-sharing agreement with Treasury’s 

Statistics of Income (SOI) for five years to obtain 

administrative earnings data to inform the College 

Scorecard. The Department will continue to provide SOI 

with individual-level data on several cohorts of students 

from all Title IV institutions and receive back institutionlevel data on salary after attending the institution. Most 

recently, the Department developed a user-requested 

comparison tool feature for the College Scorecard to 

allow users to compare multiple school profiles and data 

points at once.

The Department’s National Assessment of Educational 

Progress (NAEP), the largest nationally representative 

and continuing assessment of student knowledge in 

various subject areas, is evolving to address schools’ 

transition to digitally based assessments. Since 1969, 

NAEP has provided a common measure of student 

achievement across the country, continuing to explore 

new testing methods and question types that reflect the 

growing use of technology in education, and continuing 

to work to be paperless.

The Department’s InformED initiative is intended to 

transform how the Department makes information 

available—and actionable—for internal users and for 

the public. Through a cross-office steering committee, 

InformED has led in the identification and development 

of high-priority open data initiatives. In addition, to 

ensure coordination around the collection, use, and 
FY 2017 AGENCY FINANCIAL REPORT | U.S. DEPARTMENT OF EDUCATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

9

analysis of agency data, the Department has supported 

the Data Strategy Team with representatives from the 

Department’s Office of Management, NCES, and Office 

of Planning, Evaluation and Policy Development.

Looking Ahead: The President’s Budget includes $616.8 

million for the Department’s Institute of Education 

Sciences to continue to support state and local-based 

research, evaluations, and statistics that help educators, 

policymakers, and other stakeholders improve student 

outcomes. $42 million is suggested for Supporting 

Effective Educator Development grants to provide 

evidence-based professional development activities and 

prepare teachers and principals from nontraditional 

preparation and certification routes to serve in highneed LEAs.

$120 million is suggested for Education Innovation 

and Research (EIR) grants to develop and expand the 

evidence base for effective interventions and innovations 

responding to other education needs, including those 

identified by Secretarial priorities and those emerging 

from the field. This continued investment is particularly 

necessary in light of new ESEA requirements for states 

and school districts to support the use of evidence-based 

interventions in schools identified for comprehensive 

support and improvement or implementing targeted 

support and improvement plans. Robust Federal 

investment in identifying such interventions through 

the EIR program is essential to ensuring that LEAs have 

the tools they need to address the persistent challenges 

in their lowest-performing schools.

REFORMING THE EFFECTIVENESS, 

EFFICIENCY, AND ACCOUNTABILITY OF 

THE DEPARTMENT

In response to President Trump’s Executive Order 

13777, Enforcing the Regulatory Reform Agenda, 

the Department established a Regulatory Reform Task 

Force that has catalogued over 150 regulations and more 

than 1,700 items of policy guidance at the Department. 

The task force, comprised of agency political appointees 

and career staff, provided recommendations on which 

regulations and guidance documents to repeal, modify, 

or keep in an effort to ensure those items that remain 

adequately protect students while giving states, 

institutions, teachers, parents, and students the flexibility 

to improve student achievement. Each principal office has 

made initial recommendations to the task force whether 

regulations and guidance under its purview meet the 

Order’s criteria for repeal, replacement, or modification. 

As previously discussed, candidates for modification that 

have been identified include the Gainful Employment 

and Borrower Defense to Repayment, and a reset for 

these regulations is underway.

Also, in response to Executive Order 13781, 

Comprehensive Plan for Reorganizing the Executive 

Branch, which requires development of a plan to enhance 

employee performance, the Department submitted an 

Agency Reform Plan to OMB, describing proposals the 

Department is considering. For the OMB submission, 

work groups considered the areas of: (a) reviewing 

potential reform areas, (b) determining if reform is 

needed or helpful and whether reform will benefit the 

agency and the public, and (c) developing proposals for 

implementing the reform if the work group determines 

it is needed or helpful. Agency staff continue to assess 

reform factors that include: new activities or functions 

the Department should initiate; ways the agency can be 

more efficient in meeting the needs of students, families, 

and education partners; activities or functions the 

Department should consider combining or modifying; 

agency activities or functions that duplicate what others 

are doing; and how the Department could best deliver the 

education services or products to students and educators. 

Looking Ahead: The Department intends to continue 

to build on what’s working well to create an agency that 

better serves America’s students and educators. Beginning 

with its FY 2018 Annual Performance Report, the 

Department will report the appropriate performance data 

for performance indicators that will relate to deregulatory 

actions, as outlined in the Executive Order 13777. 

The results of this internal reform will better align and 

support the new strategic plan, which is the basis for the 

Department’s performance management framework. 

The Department uses quarterly performance reviews, 

targeted strategic initiatives, and outreach to leaders and 

stakeholders to assess progress and garner engagement 

toward achieving strategic goals and outcomes. The 

FY 2018–22 Strategic Plan will be published with the 

President’s FY 2019 Budget.