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    Subject Term: "Direct loans"

    8 publications with a total of 25 open recommendations including 3 priority recommendations
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    6 open recommendations
    including 2 priority recommendations
    Recommendation: The Secretary of Education should assess and improve, as necessary, the quality of data and methods used to forecast borrower incomes, and revise the forecasting method to account for inflation in estimates.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed to assess and improve its borrower income forecasts. The agency reported that it is working with Treasury and other federal partners to obtain the best income data while ensuring that taxpayer privacy is protected to the full extent of the law. Education noted it will establish a timeframe for improvements to the IDR model that allows for adequate and thorough analysis and quality control. It will also consider including an adjustment for inflation in our income estimates and will document the results of our analysis for the next version of the IDR model. The agency wants to guarantee that an inflation adjustment is appropriate for this subpopulation of IDR borrowers, therefore they will conduct further analysis to ensure that any inflation adjustment is appropriately incorporated into the model. The agency anticipates completing these efforts by September 29, 2017. When these efforts are complete, GAO will await documentation that Education has assessed and improved the quality of data quality and methods it uses to forecast borrower incomes, and that it has revised its forecasting methods to account for inflation.
    Recommendation: The Secretary of Education should obtain data needed to assess the impact of income recertification lapses on borrower payment amounts, and adjust estimated borrower repayment patterns as necessary.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed to attempt to obtain data to assess the impact of income recertification lapses on borrower payment amounts. The agency reported that it started to collect more detailed information on borrowers who fail to recertify their income. It will analyze these data to see if they can be used to adjust borrower repayment patterns in the model. The agency will also consider whether to include behavioral effects to account for targeted borrower outreach to recertify their income. GAO will monitor the progress of these efforts. Education expects to complete these efforts by September 29, 2017. At that time, GAO will await documentation that Education has obtained the necessary data to assess the impact of recertification lapses on borrower repayment patterns and adjusted estimated borrower repayments in its model, as necessary.
    Recommendation: The Secretary of Education should complete efforts to incorporate repayment plan switching into the agency's redesigned student loan model, and conduct testing to help ensure that the model produces estimates that reasonably reflect trends in Income-Driven Repayment plan participation.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to incorporate repayment plan switching into its redesigned student loan model, and reiterated that efforts to incorporate this capability had begun despite challenges inherent in predicting borrower behavior. GAO will monitor the progress of these efforts.
    Recommendation: The Secretary of Education should, as a part of the agency's ongoing student loan model redesign efforts, add the capability to produce separate cost estimates for each Income-Driven Repayment plan and more accurately reflect likely repayment patterns for each type of loan eligible for these plans.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education asserted that as they redesign its current cost estimation model, it will consider adding the capability to produce separate cost estimates for each IDR plan and allow for separate, more accurate estimates by loan type.
    Recommendation: The Secretary of Education should more thoroughly test the agency's approach to estimating Income-Driven Repayment plan costs, including by conducting more comprehensive sensitivity analysis on key assumptions and adjusting those assumptions (such as the agency's Public Service Loan Forgiveness participation assumption) to ensure reasonableness.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to test its approach to estimating IDR plan costs more thoroughly, including through more comprehensive sensitivity analysis. The agency included in its FY16 Annual Financial Report, sensitivity analyses for Public Service Loan Forgiveness participation and borrower incomes. In the future, the agency will consider conducting additional sensitivity to analyses as well as other kind of analysis to ensure reasonableness. GAO will consider closing this recommendation when the agency has completed these efforts.
    Recommendation: The Secretary of Education should publish more detailed Income Driven Repayment plan cost information-- beyond what is regularly provided through the President's budget--including items such as total estimated costs, sensitivity analysis results, key limitations, and expected forgiveness amounts.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to publish more detailed IDR plan cost information and stated that it plans to present sensitivity analysis results and key limitations in upcoming financial reports. GAO will consider closing this requirement when the agency has completed this effort.
    Director: Daniel Garcia-Diaz
    Phone: (202) 512-8678

    3 open recommendations
    Recommendation: To better inform Congress and improve what is known about the extent to which elderly residents of Section 202 properties are assisted by service coordinators, the Assistant Secretary for Housing should implement HUD's guidance on processes to improve the accuracy of information on Section 202 properties with budget-based service coordinators, and take steps to evaluate whether the guidance has improved the reliability of this information.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In November 2016, HUD noted that the Multifamily Housing's Office of Program Systems Management is working to make adaptive changes to iREMS to better support data for the Service Coordinator program. Upon completion of this effort, written instructions will be made available in the iREMS user guide. HUD plans to complete this effort by December 31, 2017.
    Recommendation: To better inform Congress and improve what is known about the extent to which elderly residents of Section 202 properties are assisted by service coordinators, the Assistant Secretary for Housing should develop and implement written guidance that describes how HUD staff should assess Section 202 properties' compliance with the program's supportive services requirement. Such guidance should include information on the roles and responsibilities of HUD staff for (1) identifying stand-alone Section 202 properties and (2) monitoring the supportive services requirement for Section 202 properties with grant- and budget-based service coordinators, Section 202 properties that do not have service coordinators, and stand-alone Section 202 properties.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In November 2016, HUD noted that it is in the process of working with a consulting firm to develop guidance and training related to Quality Assurance providers (which Section 202 properties have the option of funding to oversee the quality of Service Coordinators). The guidance is intended to standardize the role of Quality Assurance providers. HUD plans to complete this effort by December 2017. HUD also noted that it will create a working group to develop additional guidance that might assist in monitoring the supportive services requirement for Section 202 properties, including stand-alone properties. HUD plans to complete this effort by December 2019.
    Recommendation: To better inform Congress and improve what is known about the extent to which elderly residents of Section 202 properties are assisted by service coordinators, the Assistant Secretary for Housing should develop and implement policies and procedures for (1) verifying the accuracy of a sample of the performance information that Section 202 properties submit through semiannual performance reports and (2) analyzing the performance information collected.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In November 2016, HUD noted that it is developing a new grant reporting framework, which will be piloted in 2017. According to HUD, the pilot will inform HUD's efforts to improve reporting, verification, and analysis of performance data related to HUD's grant programs. HUD plans to complete this effort by October 2017.
    Director: Cheryl E. Clark
    Phone: (202) 512-9377

    4 open recommendations
    Recommendation: To help ensure that subsidy cost estimates for the Mutual Mortgage Insurance Fund are supported, reliable, and reasonable, the Secretary of Housing and Urban Development should direct the Principal Deputy Assistant Secretary for the Office of Housing to develop detailed policies and procedures over the subsidy cost estimation process that address, at a minimum, the documentation that should be prepared and maintained to support subsidy cost estimates and the process to document management review and approval of subsidy costs estimates.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In response to our recommendation, HUD said that a new contract was issued that will address documentation of the MMI cash flow model and the subsidy cost estimation process. HUD also said that it was in the process of developing a solicitation for a contractor to perform an independent verification and validation of the MMI cash flow model. HUD stated that completing this documentation of the subsidy cost estimation process will help management oversee the program as required by internal control standards and help support its subsidy cost estimates. We are awaiting supporting documentation for actions taken by HUD to address this recommendation.
    Recommendation: To help ensure that subsidy cost estimates for the Direct Student Loan Program are supported, reliable, and reasonable, the Secretary of Education should direct the Assistant Secretary for the Office of Planning, Evaluation and Policy Development to develop detailed policies and procedures over the subsidy cost estimation process that address, at a minimum, the documentation that should be prepared and maintained to support subsidy cost estimates and the process to document management review and approval of subsidy cost estimates.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education (Education) agreed with this recommendation. Education stated that has detailed procedures for developing and validating subsidy cost estimates. These procedures include, but are not limited to, establishing a baseline scenario, documenting each assumption individually, comparing estimates to actual data, and management review and sign-off. Education has begun drafting a more detailed document that will describe policies and procedures.
    Recommendation: To help ensure that subsidy cost estimates for the Direct Student Loan Program are supported, reliable, and reasonable, the Secretary of Education should direct the Assistant Secretary for the Office of Planning, Evaluation and Policy Development to develop detailed documentation of the cash flow model used to estimate subsidy costs, including the rationale for model calculations, all formulas and assumptions used in the model, data sources, the process to update and document changes to the model, and the process to document management review and approval of the model, which may be based on an independent verification and validation of the model to ensure that calculations are accurate and consistent with the model documentation.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education (Education) agreed with this recommendation. Education stated that it is committed to continuous improvements in its cash flow model and how it is documented. The cash flow model includes inputs of modeled data, referred to as assumptions, together with program-determined static values, such as interest rates and fees. Education stated that it will update its detailed documentation of its cash flow model. In addition, Education is investing staff and resources into developing a new cash flow model to estimate subsidy costs. Detailed documentation of this new cash flow model will be prepared before the model becomes operational. We will review Education's new cash flow model documentation once it is completed.
    Recommendation: To help ensure that subsidy cost estimates for the Direct Student Loan Program are supported, reliable, and reasonable, the Secretary of Education should direct the Assistant Secretary for the Office of Planning, Evaluation and Policy Development to document the procedures and results of such procedures used to develop or support key elements of the subsidy cost estimation process, addressing at a minimum (1) the reliability of historical data, (2) the rationale for informed opinion when applicable, (3) the methods used to calculate cash flow assumptions, (4) the process to ensure that subsidy cost estimates are consistent with the terms and conditions of the program, (5) the process to assess estimated cash flows for reasonableness, and (6) the process used to perform sensitivity analysis.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education (Education) agreed with this recommendation. Education stated that it will work on developing more detailed policies and procedures which will address the key elements referenced in this recommendation.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    3 open recommendations
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should develop a minimum standard that specifies core call center operating hours to provide borrowers, including those on the West Coast, with improved access to servicers.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agreed to establish core hours in the requirements for servicers to help borrowers access live customer service representatives. Education also noted that borrowers can use interactive voice response and web technology to access information from their servicers during periods when live operators are not available. While these are additional tools for borrowers, they do not replace the need for access to live representatives, and, as we note in the report, Education's customer satisfaction surveys of borrowers in 2014 and 2015 raised concerns about the usefulness of servicers' automated voice response systems. Establishing core call center hours in servicer requirements, if implemented as Education described, would meet the intent of the recommendation.
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should ensure the new unified borrower complaint tracking system includes comprehensive and comparable information on the nature and status of borrower complaints made to both Education and servicers, to allow Education to track trends and better manage the program to effectively meet borrower needs.

    Agency: Department of Education
    Status: Open

    Comments: Education reported that it will conduct communication and awareness campaigns to ensure borrowers know of the existence and purpose of the feedback system, which includes comprehensive and comparable information on the nature and status of borrower complaints about servicers. One of the communication channels used will be through the servicers. In addition, the agency reported that it will establish a common borrower experience and common branding in the requirements for the ongoing student loan servicing solicitation by, among other things, requiring the creation of a single web portal clearly labeled as representing the agency. Through that system, all borrowers will be ale to access information, make payments, apply for benefits and manage their accounts. When implemented, this new platform, in conjunction with FSA's Feedback System, will collect complaint information at FSA comprehensively.
    Recommendation: To help address Education's strategic goal of providing superior customer service to borrowers, and to strengthen oversight of the Direct Loan program, the Secretary of Education should evaluate and make needed adjustments to Direct Loan servicer performance metrics and compensation to improve assessment, including using baseline data, and alignment with Federal Student Aid's strategic goals aimed at superior customer service and program integrity, and to ensure that the assignment of new loans to servicers takes program compliance into account.

    Agency: Department of Education
    Status: Open

    Comments: Education stated that it would evaluate existing and alternative performance metrics and compensation strategies as part of the ongoing student loan servicing procurement. The agency noted that the results of this evaluation, along with information gleaned form other market research conducted in the context of the procurement and proposals submitted by prospective vendors, will be reflected in future servicing contracts.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    1 open recommendations
    including 1 priority recommendation
    Recommendation: To strengthen management of the Direct Loan Program and ensure good customer service for borrowers, the Secretary of Education should direct the Office of Federal Student Aid's Chief Operating Officer to review its methods of providing instructions and guidance to servicers, identifying areas to improve clarity and sufficiency, and ensure consistent delivery of instructions and guidance to ensure program integrity and improve service to borrowers. For example, the Department could consider implementing a detailed, common servicing manual for the Direct Loan program.

    Agency: Department of Education
    Status: Open
    Priority recommendation

    Comments: The Department of Education agreed with this recommendation and has reviewed its guidance to servicers, as of October 2016. It has issued clarifications to servicers in several areas. In addition, the Department had been in the process of an acquisition for a new loan servicing solution but, as of September 2017, is reassessing its acquisition strategy. While the plan for the revised acquisition is not finalized, FSA expects its approach to significantly streamline the process of communicating instructions and guidance to servicers, as well as improve the overall experience for students and borrowers. Upon resolution of its acquisition strategy, Education needs to demonstrate that its final contract for a new loan servicing solution is structured to provide clear and consistent instructions and guidance to servicers to ensure program integrity and improve service to borrowers.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    1 open recommendations
    Recommendation: To help ensure that Income-Based Repayment, Pay As You Earn, and Public Service Loan Forgiveness serve their intended beneficiaries to the greatest extent possible, the Secretary of Education should take steps to consistently and regularly notify all borrowers who have entered repayment of income-driven repayment plan options, including Income-Based Repayment and Pay As You Earn.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education generally concurred with our recommendation, stating that it is committed to ensuring that federal student loan borrowers have the information they need to manage their debt, including details regarding income-driven repayment plans and loan forgiveness programs. However, Education stated that it is not clear that providing information on repayment options to all borrowers is the most efficient or effective way to achieve this goal. Beginning in 2015, Education directed its loan servicers to start sending detailed income-driven repayment information, such as projected monthly payment amounts and total amounts paid over the life of the loan under each plan, on a quarterly basis to all borrowers who are in school or in the 6-month grace period after leaving school. Education reported that in 2016 its loan servicers also began sending an email to borrowers in the fifth month of their grace period with information about applying for income-driven repayment plans and Public Service Loan Forgiveness. Education also reported that in December 2016 it began sending emails about the Revised Pay As You Earn plan directly to certain groups of borrowers, including those who expressed interest in income-driven plans during exit counseling, were less than 227 days delinquent, or had Federal Family Education Loans. While these are positive steps, we maintain it is important for Education to notify all borrowers in repayment of these options to support its goal to provide superior information and service to borrowers.
    Director: J. Christopher Mihm
    Phone: (202) 512-6806

    4 open recommendations
    Recommendation: Recognizing that moving toward a more customer-oriented culture within federal agencies is likely to be a continuous effort, the Secretary of Agriculture should direct the Under Secretary for Natural Resources and Environment, to improve Forest Service's customer service standards and feedback review, to: (1) ensure standards include performance targets or goals, (2) ensure standards include performance measures, (3) ensure standards are easily publicly available, (4) develop a feedback mechanism to collect comments agency-wide, which should include guidance or criteria to elevate customer feedback from local and regional offices to identify the need for and to make service improvements.

    Agency: Department of Agriculture
    Status: Open

    Comments: In August 2017, Forest Service provided an update for completing the tasks necessary to respond to our recommendations. In accordance with our recommendations, for each of its customer service standards, the Forest Service has developed goals, targets and measures and we consider this part of the recommendation closed. Forest Service stated the remaining part of the recommendation will be implemented by December 2018. Specifically, the Forest Service stated by December 2018 it will begin to make standards easily publicly available on its public-facing websites. The Forest Service provided the criteria for elevating customer comments and by December 2018 stated it will begin to deploy and collect feedback forms. We will close this recommendation as implemented when standards are publicly available and customer feedback forms are deployed.
    Recommendation: Recognizing that moving toward a more customer-oriented culture within federal agencies is likely to be a continuous effort, the Secretary of Education should direct Federal Student Aid's Chief Operating Officer, to improve Federal Student Aid's customer service standards and feedback review, to: (1) ensure standards are easily publicly available, (2) develop a feedback mechanism that includes guidance or criteria for service providers to elevate customer feedback to identify the need for and to make service improvements.

    Agency: Department of Education
    Status: Open

    Comments: We emailed Department of Education in June 2017 for an update on the status of this recommendation. Once a response is received we will update this recommendation.
    Recommendation: Recognizing that moving toward a more customer-oriented culture within federal agencies is likely to be a continuous effort, the Commissioner of U.S. Customs and Border Protection should, to improve CBP's customer service standards: (1) ensure standards include performance targets or goals, (2) ensure standards include performance measures.

    Agency: Department of Homeland Security: United States Customs and Border Protection
    Status: Open

    Comments: In January 2017, CBP sent an email stating that the agency has done all it can to fully implement the recommendation at this time. Because CBP does not have performance goals or targets for customer service standards this recommendation remains open. In April 2016, CBP provided us with customer service survey questions they use to collect data. Based on our review of that information, we were unable to confirm CBP had established performance targets and goals for the data being collected. As we stated in the report, performance goals should be in a quantifiable and measurable form to define the level of performance to be achieved for program activities each year. Although CBP is collecting new customer service data based on survey responses, without predetermined performance targets that align with a customer service standard it is not clear what or if internal targets or customer needs are being met. In June 2017, we emailed CBP for an update on the status of this recommendation. Once a response is received we will update this recommendation.
    Recommendation: Recognizing that moving toward a more customer-oriented culture within federal agencies is likely to be a continuous effort, the Secretary of the Interior should direct the Assistant Secretary of Fish, Wildlife and Parks, to improve the National Park Service's customer service standards and feedback review, to: (1) ensure standards include performance targets or goals, (2) ensure standards include performance measures, (3) ensure standards are easily publicly available, (4) develop a feedback mechanism that includes guidance or criteria to review and elevate customer feedback from local and regional offices to identify the need for and to make service improvements.

    Agency: Department of the Interior
    Status: Open

    Comments: According to NPS officials, NPS plans on defining a strategy that describes the intended customer experience for highest customer interactions such as Volunteer in Parks program and Teacher engagement program. NPS will align the strategy with overall organizational strategy, share the strategy with all employees (e.g., documentation, training), and update strategy plans to include performance targets and goals for customer service. NPS also plans on soliciting feedback from customers about their experiences with the VIP and Teacher Outreach Programs, collecting unsolicited feedback from customers about their experiences with the organization (e.g., by mining calls, emails, or social media posts), and gathering input from employees about their experiences with customers and their role in delivering the customer experience. NPS plans to share customer experience metrics and models with all employees (e.g., distribute reports and dashboards, conduct training sessions), publish customer service standards on website so that customers know what to expect, and publish customer service data to ensure actual service levels are transparent. Finally NPS plans on piloting the "Federal Feedback" Button and evaluate for expanded use in fiscal year 2018. In June 2017, we emailed NPS for an update on this recommendation. Once a response is received we will update this recommendation.
    Director: Shames, Lisa R
    Phone: (202)512-9692

    3 open recommendations
    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should develop and promulgate a policy statement that lays out the factors USDA considers in issuing stays of foreclosure in class action lawsuits.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of March 2017, we have requested documentation from the Office of the Assistant Secretary for Civil Rights that would demonstrate this recommendation has been implemented.
    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should maintain historic information, by race, on foreclosures completed by FSA.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of March 2017, we have requested documentation from the Office of the Assistant Secretary for Civil Rights that would demonstrate this recommendation has been implemented.
    Recommendation: To help address problems related to FSA foreclosures, the Secretary of Agriculture should direct FSA and OCR to improve communications to ensure that foreclosure actions are not taken against borrowers with pending complaints.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of March 2017, we have requested documentation from the Office of the Assistant Secretary for Civil Rights that would demonstrate this recommendation has been implemented.