Information Technology: Education Needs to Address Student Aid Modernization Weaknesses
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.
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.
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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that it was tracking and monitoring costs, including government labor costs, for the Next Gen program. In addition, the office reported that it had started producing a quarterly report to inform Next Gen and upper FSA Leadership on the program's costs. However, as of May 2024, the office had not yet provided sufficient evidence to demonstrate that it had been tracking and monitoring all costs, including government labor costs, for the Next Gen program. To fully implement this recommendation, FSA will need to provide evidence that the office is tracking and monitoring all of the Next Gen program's costs.
|
| Office of Federal Student Aid |
Priority Rec.
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) |
FSA agreed with this recommendation. In April 2023, the office reported that the FSA Chief Operating Officer directed the senior leadership team to establish a working group to identify potential improvements to its project management guidance and practices. To fully implement this recommendation, FSA should update its cost estimate guidance to include all 12 steps of the cost estimating process identified in the GAO Cost Estimating and Assessment Guide. FSA reported that it aims to address this recommendation by August 2024. Establishing this revised cost estimating guidance would help FSA develop reliable cost estimates for its acquisition programs. Further, it could position FSA to effectively estimate funding needs for its investments and use more reliable data to make budgetary decisions. We will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that it was in the process of updating the Next Gen program's cost estimate. Further, FSA reported that the updated cost estimate should be available by May 2024. However, we have not yet received the program's updated cost estimate as of May 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office described multiple actions it was taking to improve the schedule estimate for the Next Gen program. For example, FSA stated that the Next Gen program had begun monitoring the contractor schedules for its new projects to ensure that the schedules adhere to the best practices called for in the GAO Schedule Assessment Guide. However, as of May 2024, the office had not yet provided the updated schedule estimate for the Next Gen program. To fully implement this recommendation, FSA will need to provide the updated schedule estimate for the Next Gen program so we can assess it against the best practices called for in the GAO Schedule Assessment Guide.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project would define metrics for tracking and validating baseline requirements. In addition, FSA reported that it would document these metrics as well as the rationale for using them in the project management plan by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project would begin documenting how the requirements meet the stated business need for each project release for future major releases by September 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project needed to determine appropriate data points to collect to identify scope variances. Further, once those data points are identified, the PPO project will add these components to its project monitoring tools to proactively mitigate the potential for schedule delays. FSA reported that it aims to fully address this recommendation by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will conduct brainstorming sessions to define a set of measurable success criteria to evaluate the PPO project's objectives. FSA reported that it aims to fully address this recommendation by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will update the quality management section of its project management plan, and other related quality management documentation, to account for process changes and recommended improvements gathered through lessons learned exercises. FSA reported that it aims to fully address this recommendation by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will update the quality management section of its project management plan to include executable quality activities that will be carried out to ensure that a high-quality system is being developed and implemented. FSA said the project will also collaborate with other offices to incorporate all FSA standards and policies for system development quality into the quality management section of the project management plan. FSA reported that it aims to fully address this recommendation by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
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| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project has a formal practice in place to evaluate each contractual deliverable against its acceptance criteria. In addition, FSA reported that, in March 2024, the PPO project conducted a review on the proper procedures for deliverable review standards, acceptance criteria, and documentation of feedback. However, as of May 2024, the office had not yet provided sufficient evidence to demonstrate that it had implemented processes to ensure that contractor deliverables met the terms of the contract prior to acceptance. To fully implement this recommendation, FSA will need to provide evidence that demonstrates that contractor deliverables met the terms of the contract prior to acceptance.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will enhance its current stakeholder list to serve as the stakeholder register that will include specifics around the level of engagement for each stakeholder and other identification information, such as the stakeholder's organizational position and role on the project. FSA reported that it aims to fully address this recommendation by September 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
|
| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will define strategies for engaging with stakeholders. FSA also reported that it will update its stakeholder engagement plan to include these specific strategies by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
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| 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) |
FSA generally agreed with this recommendation. In April 2024, the office reported that the PPO project will define methods and metrics and to monitor the actual level of stakeholder engagement. FSA added that the PPO project will update its stakeholder engagement plan to include these methods and metrics by June 2024. As such, we will continue to monitor FSA's efforts to implement this recommendation.
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