Risk Management for the U.S. Department of Education Office of Federal Student Aid
Challenge: With a $1.5 trillion loan portfolio, the U.S. Department of Education’s Office of Federal Student Aid (FSA) is the largest provider of the nation’s federal student aid. FSA must effectively mitigate risks to students and taxpayers as well as share information on risk reduction with executive offices of the administration and Congress that provide regulatory standards and establish policy for the distribution of aid and collection of loan payments.
The broad scope of work across the Next Gen Program Office and the Student Aid and Borrower Eligibility Reform (SABER) initiative creates challenges for effectively coordinating and aligning project risk activities and communications across program offices and within the department. In addition, the Department of Education must continually refine its internal controls framework to better promote a world-class student aid customer experience while addressing the financial challenges posed by a slow economic recovery following the COVID-19 pandemic and an ongoing risk of fraudulent or noncompliant institutional activities.
Solution: Since 2019, the Summit team has been instrumental in supporting the Next Gen Program Office and SABER teams at FSA. Our team supported the development of a risk management plan and processes in alignment with FSA’s broader enterprise risk management framework, leveraging the experience of our embedded teams across multiple workstreams. The team worked to identify challenges of current processes and ensure risks are managed at the appropriate level.
To standardize activities among project teams, a form to identify risks and issues was developed to improve risk validation and tracking. In addition, the Summit team meets weekly with department risk team staff, vendors, and project support teams, which has improved communication and coordination across the project through clarifying identified risks and issues and assessing, monitoring, and tracking mitigation activities on the risks-and-issues register. The team seeks to further streamline existing SABER risk assessment and monitoring practices by improving common process workflows identified as pain points using Microsoft SharePoint and Power Automate.
Result: Due to the ongoing support of the Summit team, FSA has further expanded internal collaboration among department staff, optimizing organizational performance and mission delivery of critical funds to student borrowers and families seeking higher education. As a result of our team’s support in drafting and submitting approximately 900 GAO and OIG audit responses, the department has increased its responsiveness and accountability of taxpayer funds through audit correspondence, detailed documentation, and further development of an internal library of evidence.
Our expert risk, internal control, and audit staff continue to build upon a 3-year legacy of successful program management with tailored approaches that best suit the context of FSA’s risk governance structure. The financial landscape has shifted dramatically for student borrowers, their families, institutions of higher education, and third-party servicers, as well as the financial institutions administering Title IV funds. Thus, our team works to not only continuously improve performance and compliance with new legislative mandates but also to enable FSA to mitigate the downstream effects of student loan debt on homeownership and expand the opportunity for more individuals to earn a college degree and build wealth for themselves and their families.