Information Technology: Education Needs to Address Student Aid Modernization Weaknesses

GAO-23-105333 Published: Oct 20, 2022. Publicly Released: Oct 20, 2022.
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Fast Facts

The Department of Education's Next Gen program—started in 2017—aims to modernize the Office of Federal Student Aid's technology and operations to improve the experiences of students, parents, and its partners.

FSA has 4 of 9 modernization projects remaining—all of which have had delays. And 3 of the 4 don't have set implementation dates—limiting FSA's ability to retire 2 older systems. In addition, FSA's total reported spending of $502 million on the program didn't include all costs, such as government labor costs. We also found that the program's cost and schedule estimates are unreliable. Our 14 recommendations address these and other issues.

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Highlights

What GAO Found

Education's Office of Federal Student Aid (FSA) initiated the Next Gen program in 2017. Next Gen's purpose was to modernize the systems and processes that students, parents, borrowers, and school partners use to apply for, administer, and/or process federal student aid. As of August 2022, FSA had modified the initial scope of Next Gen from 13 projects to nine projects. Of the nine projects, five are considered complete—a data strategy plan, a systems architecture document, a pilot effort on payments, deployment of a data management platform, and deployment of a loan data system. The four remaining projects had each experienced schedule delays with interim milestones. Further, FSA does not know when three of the four projects would be fully implemented (see table).

Schedule Status for Ongoing Federal Student Aid (FSA) Next Gen Projects, as of June 2022

Project name

Original planned full implementation date

Current planned full implementation date as of June 2022

Business Process Operations

7/26/2022

3/31/2024

Digital and Customer Care

8/12/2021

Not yet determined

Partner Participation and Oversight

3/1/2022

Not yet determined

Unified Servicing and Data Solution (previously called Enhanced Processing Solution and Interim Servicing Solution)

9/22/2022a

Not yet determined

Source: GAO analysis of Next Gen FSA program documentation and data provided by FSA officials. | GAO-23-105333

aThis date represents when FSA planned to implement the Interim Servicing Solution environment.

FSA reported that it has spent a total of $502 million on the Next Gen program, as of June 2022. However, this amount does not include all program costs because FSA has not tracked government-related labor costs. Even with this omission, the amount reported has already exceeded FSA's September 2021 life cycle cost estimate of $415 million.

FSA's schedule and cost shortcomings reflect its lack of alignment with GAO best practices. Specifically, FSA's cost estimation guidance does not fully address these practices. Further, the Next Gen program did not substantially or fully meet best practices for any of the key characteristics of a reliable cost or schedule estimate. Until these weaknesses are addressed, FSA cost and schedule estimates will continue to be unreliable. In turn, this will impair the ability of senior leadership to make informed decisions on the program's future.

Next Gen's school partnership project is intended to, among other things, deliver to schools a central point of access to FSA. In carrying out the project, FSA partially implemented each of the 11 selected best practices on project scope, system development quality, and stakeholder management. For example, although the project relied on performance reports to monitor system development quality, project officials did not verify that contractor deliverables met criteria specified in the contract prior to their acceptance. Until the project fully implements all selected best practices, its efforts are at risk of additional delays, cost increases, and system capabilities that do not meet schools' needs.

Why GAO Did This Study

In fiscal year 2021, the Department of Education's FSA spent about $1.3 billion to process federal student aid totaling about $112 billion. To modernize processing of student aid, Education initiated an effort, referred to as the Next Gen program. One of the most critical and expensive projects within Next Gen is a system development effort focused on strengthening partnerships with participating schools.

The House report accompanying the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Bill, 2021 included a provision for GAO to examine FSA's efforts to transition to the Next Gen program. This report examines (1) the status of FSA's Next Gen program; (2) the extent to which FSA cost estimation guidance and the Next Gen program's cost and schedule estimates aligned with GAO best practices; and (3) the extent to which FSA implemented best IT practices on scope, system development quality, and stakeholder management for the school partnership project.

GAO reviewed Next Gen program and project planning documentation, and evaluated the Next Gen program's cost and schedule estimates against GAO best practices. GAO also assessed the school partnership project against selected project management best practices.

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Recommendations

GAO is making 14 recommendations to Education, including addressing weaknesses in cost, scheduling, and project management practices. FSA, on behalf of Education, generally concurred with the recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that, moving forward, the Next Gen program tracks and monitors all of its costs, including government labor costs. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should update FSA's cost estimation guidance for its acquisition programs to incorporate the best practices called for in GAO Cost Estimating and Assessment Guide. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should update the cost estimate for the Next Gen program to ensure it accounts for all costs and incorporates the best practices called for in GAO Cost Estimating and Assessment Guide. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should revise the schedule estimate for the Next Gen FSA program to incorporate the best practices called for in GAO Schedule Assessment Guide. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project defines metrics for tracking the baseline requirements and the rationale for using the metrics. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project documents how detailed requirements meet the business need for the project. (Recommendation 6)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project captures work performance data and information to identify scope variances and their causes. (Recommendation 7)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project identifies success criteria and measurable project objectives. (Recommendation 8)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project updates the quality management section of its project management plan, and other related quality management documentation, to account for actual project results. (Recommendation 9)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project develops executable quality activities that incorporate FSA's quality policies into the project. (Recommendation 10)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project determines that contractor deliverables meet the terms of the contract prior to acceptance. (Recommendation 11)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project develops and maintains a stakeholder register that includes identification information or specifics around the level of engagement for each stakeholder. (Recommendation 12)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project defines specific strategies for engaging with stakeholders and updates its stakeholder engagement plan to reflect new or changed management strategies required to effectively engage stakeholders. (Recommendation 13)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of Federal Student Aid The Chief Operating Officer of FSA should ensure that the PPO project monitors work performance information that reflects the actual level of stakeholder support and engagement relative to the desired level during all phases of the project lifecycle. (Recommendation 14)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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