Federal Student Aid:

Progress in Integrating Pell Grant and Direct Loan Systems and Processes, but Critical Work Remains

GAO-03-241: Published: Dec 31, 2002. Publicly Released: Dec 31, 2002.

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To address system problems and other long-standing management weaknesses, in 1998, the Congress created a discrete unit within the Department of Education, the Office of Federal Student Aid (FSA). This office subsequently adopted a new approach to systems integration using middleware (a type of software that can allow an application to access data residing in different databases) and Extensible Markup Language (XML)--a flexible, nonproprietary set of standards that is intended to make it easier to identify, integrate, and process information widely dispersed among systems and organizations. FSA's first use of this approach is the Common Origination and Disbursement (COD) process for the Direct Loan, Pell Grant, and campus-based programs. GAO initiated a follow-up review to assess FSA's progress in implementing this process.

FSA has made progress in implementing the COD process. Specifically, it has implemented (1) a new information technology infrastructure that uses middleware to enable data exchange among disparate systems; (2) the initial version of the basic COD system, which replaces two existing systems and is being used by schools participating in the Pell Grant and Direct Loan programs; (3) middleware into existing systems to support the COD process; and (4) a common record based on XML that schools can use to submit student financial data for the Pell Grant and Direct Loan programs. However, the implementation of the COD process is behind schedule, and its ultimate success hinges on FSA's completing critical work, including addressing serious postimplementation operational problems, and having thousands of postsecondary schools implement the common record. Further, there are important elements to managing any information technology investment that FSA has not yet completed: Determining whether expected benefits are being achieved. FSA has only some of the metrics, baseline data, and tracking processes necessary to determine whether it is achieving all expected benefits. Tracking lessons learned. FSA has relied on an ad hoc approach for gathering and disseminating lessons learned related to schools' implementation of the common record. To address this issue, FSA plans to include lessons learned as part of an update to its school testing guide. However, this does not replace the need for an ongoing mechanism to capture and disseminate lessons learned, without which schools may encounter problems that could have been avoided or mitigated.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Education has implemented this recommendation in that it has established customer satisfaction and financial integrity performance measures and is tracking against them. In particular, it (1) administered a questionnaire to Common Origination and Disbursement (COD) users to measure their satisfaction for the past 2 years, and (2) is using a Percent of Funds Substantiated report to measure financial integrity.

    Recommendation: To determine the extent to which the new COD process is achieving expected results related to customer satisfaction and financial integrity, the Secretary of Education should direct FSA's Chief Operating Officer to expeditiously develop metrics and baseline data to measure these benefits and develop a tracking process to assess the extent to which the expected results are being achieved.

    Agency Affected: Department of Education

  2. Status: Closed - Implemented

    Comments: Education has developed a process to capture lessons learned and uses a variety of mechanisms to disseminate these lessons to schools that have not yet implemented the COD system.

    Recommendation: To ensure that the schools that have not yet implemented the common record benefit from the experiences of those that have, the Secretary of Education should direct the FSA's Chief Operating Officer to establish a process for capturing lessons learned in written product or knowledge base and for disseminating them to these schools.

    Agency Affected: Department of Education


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