Program Plan
Department of Education - Student Aid Administration Recovery Act Recovery Plan
Updated 05/15/2009
Objectives
Program Purpose
Federal Student Aid (FSA) plays a central and essential role in America's postsecondary education community by ensuring that all eligible individuals benefit from federal financial assistance for education beyond high school. The funding provided by the American Recovery and Reinvestment Act (ARRA) will increase the number of Title IV student loan servicing vehicles and improve operational performance to collect and deliver loan and grant data between program participants and the system.
Public Benefits
With the current economic and liquidity uncertainty facing financial markets, many student loan lenders are dropping out of the market. With more than $65 billion in 2008- 09 loans and approximately $130 billion in eligible 2003-07 student loans on bank balance sheets and auction rate securitizations, the capital markets are currently unable to generate adequate funds at prices that will ensure 2009-10 loans can be made. Recent legislation, including the College Cost Reduction Authorization Act of 2008 (CCRAA) (Pub. Law 110-84) and the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) (Pub. Law 110-227) enabled the Department to accept former Federal Family Education Loan Program (FFELP) loans in the form of additional Direct Loan (DL) capacity, and to purchase FFELP loans as far back as 2003, in an effort to bring liquidity and stability back to the student loan market. With the sudden increase in current and potential loan volume that the Department will be responsible for servicing, the need for increasing the Title IV student aid servicing vehicles is determined appropriate at this time. ARRA funding will enable the Department to increase its capacity for loan servicing and assist in providing stability in the student loan market. This will give applicants confidence that student loans would be available to assist them and also provide increased aid.
The National Student Loan Data System (NSLDS) aims to collect, store and make available detailed data about Title IV aid disbursed and the aid recipients. It aims to simplify and streamline aid delivery processes used by schools, lenders and guarantors throughout the county, replacing paper driven techniques with efficient electronic communications. NSLDS generates summary details to aid the Financial Management System (FMS) with Account Maintenance and Loan processing Fee payments to Guarantors. It supports elimination of improper payments by providing loan level detail for reasonability checks against FMS financial reports for Guaranty Agencies. It supports eGovernment initiatives through the NSLDS websites that provide services to individuals as a single point of entry for accessing Title IV aid information. In addition, NSLDS calculates official Cohort Default Rates used for oversight of program participants. ARRA funding will improve financial performance by using loan and grant data within NSLDS to screen aid applicants for eligibility to receive Title IV aid by not being in default or owe an overpayment of Title IV aid. This will improve efficiency in information delivery and determining Title IV aid eligibility to applicants
Measures
The measures have been revised to enrich the performance metrics for Recovery targets. In some instances, targets will not be available until additional baseline data has been collected.
| Measure | Target/Actual |
|---|
| 2009 | 2010 | 2011 | 2012 |
|---|
[-]
Number of student and parent borrowers actively being serviced due to the Recovery Act | 0/0 | 0/0 | - | - |
Measure Information
| Frequency : Annual | | Direction : Increasing | | Type : Output | | Explanation : This measure represents the number of student borrowers whose loans are being actively serviced using Recovery Act funds. Ensuring that students have continual access to financial aid is an important objective of the Department. The number of student borrowers is a concrete example of how the Recovery Act is assisting them to afford college. | | Unit : Borrowers |
|
[-]
Dollar amount of outstanding loans actively being serviced due to the Recovery Act | 0/0 | 0/0 | - | - |
Measure Information
| Frequency : Annual | | Direction : Increasing | | Type : Output | | Explanation : This measure represents how much in outstanding loans are being actively serviced using Recovery Act funds. This will show how much the Department is able to provide more servicing due to increased investment by the Recovery Act. | | Unit : Dollars |
|
[-]
Number of student and parent Title IV student aid recipients provided online access to their student loan information through the National Student Loan Data System (NSLDS). | 0/0 | 0/0 | - | - |
Measure Information
| Frequency : Annual | | Direction : Increasing | | Type : Output | | Explanation : This measure represents the number of student and parent Title IV student aid recipients provided online access to their student loan information through NSLDS. One of the key goals of NSLDS is to improve accessibility of student aid. It does this by providing student aid recipients access to basic information about their Federal loans at a secure website accessible to standard web browers. | | Unit : Recipients |
|
Schedule and Milestones
The Department will award contracts to additional servicer contractor(s) and to NSLDS contractor(s) in order to accomplish the two activities described earlier. In additional, the Department will develop performance measures for those contracts. The current plan is to have the additional servicer contract awarded and funds obligated by June 30, 2009, and the NSLDS contract awarded and funds obligated by July 1, 2009. In addition, the performance measures are planned to be complete for the additional servicer contract by June 30, 2009, and for the NSDLS contract by August 31, 2009.
Milestones
| Milestone |
Completion Date |
| Award contract(s) to additional servicer contractor(s) and include performance measures in the contract award. |
06/30/2009 |
| Award contract(s) to NSLDS contractor(s). |
07/01/2009 |
| Develop Performance Measures for NSLDS contract |
08/31/2009 |
Projects and Activities
The primary activity that will stem from the $60 million appropriated will be loan servicing. The scope of the activity would be to acquire efficient and effective commercial contract services to manage all types of Title IV student aid obligations, including, but not limited to, servicing and consolidation of outstanding debt. $52 million will be allotted to provide increased loan servicing.
Of the $60 million, $8 million will be applied to the National Student Loan Data System (NSLDS) contract. The scope of the contract is to provide operations and maintenance of the NSLDS, provide customer support to system users, assist data providers with data collection processes, and to perform required business functions for Federal Student Aid. The requirements of this activity include capturing information regarding loans and grants made, and providing for the electronic exchange of data between program participants and the system. Information concerning the characteristics of borrowers and the extent of student loan indebtedness on a statistically valid sample of borrowers is also collected for research, budget formulation, and policy analysis. NSLDS is used to calculate cohort default rates, prevent fraud and abuse through pre-screening and post-screening for Title IV aid eligibility, and calculate statutory guaranty agency payments.
Review Process
The requirements for monitoring and evaluation of the ARRA funds are currently being developed. For the additional loan servicing activity, the requirements for monitoring, reporting, and evaluation will be part of the final contract(s) – expected award date is June 30, 2009.
For the NSLDS activity, the requirements for monitoring, reporting, and evaluation of contract performance will be part of the final contract and will be conducted on an ongoing quarterly basis to ensure the contractor meets performance objectives. A formal performance measurement plan will be developed and quarterly evaluation of performance will be conducted per the plan requirements. Performance measures are used for each scope area. The performance measurement plan and specific measures and methods for evaluation shall be completed by August 31, 2009.
Cost and Performance Plan
The cost and performance plans of the additional servicers contract(s) are currently being developed. For the cost and performance plan of the NSLDS contract(s), the base cost will be a firm fixed price and the award fee is based on exceeding quarterly performance expectations. In addition, the Department will use the performance measures to ensure accountability of the activities.
In addition, the Department will post summaries to Recovery.gov and the Department Weekly ARRA Reports. These summaries will include total appropriations, obligations, and total outlays.
Energy Efficiency Spending Plans
Program Plan Award Types
No Data Available