On November 18, the U.S. Department of Education (ED) came before a joint hearing of the House Education and the Workforce Committee's Subcommittee on Higher Education and Workforce Training and the House Oversight and Government Reform's Subcommittee on Government Operations entitled "Federal Student Aid: Performance-Based Organization Review." At the hearing significant and serious criticism was aimed at the department, and specifically the Office of Federal Student Aid (FSA), for its management of the federal student financial aid system. Members of Congress highlighted concerns about the ability of the FSA to efficiently and effectively run the $1.2 trillion student loan system.
The FSA was established as the government's first "performance-based organization," organizations intended to "encourage a group of Government executives in an organization to bear responsibility for its level of performance." Formed in 1998, the FSA was designed to give ED more freedom to run the student loan program in exchange for meeting measurable performance goals. Most committee members, however, indicated that, in their view, the office has not been meeting those goals.
A majority of the hearing focused on FSA's lack of oversight in relation to the companies the department hires to collect and manage student loan payments; concerns about the rollout of gainful employment; and the new error rate calculations put into effect in 2014 and used by the department to determine the amount of funds improperly dispersed through Pell Grants and other loans. However, a portion of the hearing was dedicated to ED data security practices in relation to the personal information of its borrowers. The department's inspector general, Katherine Tighe, noted that she has had significant difficulties in her attempts to obtain information from the department's contractors and subcontractors with regard to the data security of its loan disbursement systems. She said the department currently has "no visibility into the data security" of one of the major computer systems it uses to track loans.
Moving forward we can expect to see continued focus on the FSA by Congress. EDUCAUSE will continue to monitor this activity.
Jen Ortega serves as a consultant to EDUCAUSE on federal policy and government relations. She has worked with EDUCAUSE since 2013 and assists with monitoring legislative and regulatory proposals across a range of policy areas, including cybersecurity, data privacy, e-learning, and accessibility.