A r c h i v e d I n f o r m a t i o n

U.S. Department of Education FY 1999 Annual Plan - February 27, 1998

Student Financial Assistance

Office of Postsecondary Education (OPE): Office-Wide Performance Indicators

Goal: To ensure access to postsecondary education.

Objectives Indicators Source and Next Update Strategies

1. Low- and middle-income students will have the same access to postsecondary education as high-income students. 1.1 Percent of unmet need. Considering all sources of financial aid, the percent of unmet need, especially for low-income students, will show continuous decreases over time. In 1994-95, percent of unmet need was 27% for all students ranging from 44% for low-income independent students to 6% for upper-income dependent students. The gap for low-income independent students decreased by 10% since 1992-93 when it was 54%.
1.2 College enrollment rates. Postsecondary education enrollment rates will increase each year for all students, while the enrollment gap between low- and high-income and minority and non-minority high school graduates will decrease each year. In 1996, there was a 30.2 percent gap between low- and high-income high school graduates aged 18-19 enrolled in college. This represents a 4.9 percent decrease from 1995 when the gap was 35.1 percent.
High income (top 20%) 79.3 %
Middle income (middle 60%) 58.2 %
Low income (bottom 20%) 49.1%
1.3 Student-focused system to support postsecondary education. By October 2001, there will be a single point of contact that allows students to get information on federal student aid, apply for aid, and have their eligibility for aid determined within four days of electronic application, cutting in half the current processing time.
1.1 National Postsecondary Student Aid Study (NPSAS) 1995/96 survey, 2001.
1.2 Current Population Statistics (CPS), 1997, and annual.
1.3 OPE Program Data, 1997.
• Work to implement the HOPE Scholarship initiative and tax deduction for postsecondary education and lifelong learning.
• Further expand funding for the Pell Grant Program and College Work Study Program. Work to assure that TRIO and other support programs are effective and available to needy students.
• Expand upon the current information dissemination strategies.
• Monitor loan availability and assess the adequacy of current loan limits.
• Monitor enrollment and population trends and identify any problems in enrollment of low-income students.
• Develop procedures to give students and families a simple mechanism for electronically applying for student financial aid through the WWW (legislative authority may be needed for full implementation).

2. More students will persist in postsecondary education and attain degrees and certificates. 2.1 Completion rate. Completion rates for all full-time, eligible, degree-seeking students in four-year and two-year colleges will improve, while the gap in completion rates between low- and high- income and minority and non-minority students will decrease. As a baseline, BPS data indicate a gap of approximately 23% in four-year college completion within five years between low and high income students. For students entering four-year colleges in 1990, the percentage that had completed by 1994, is as follows:
Highest income quartile: 57.2%
Second income quartile: 47.4%
Third income quartile: 40.4%
Lowest income quartile: 34.4% 2.1 Beginning Postsecondary Students (BPS) Survey (completion rates), 2001. • Enhance the effectiveness of TRIO projects through (1) implementation of recommendations arising from the on-going evaluation of the programs and, (2) through more effective monitoring and dissemination of information regarding effective practices.

3. Taxpayers will have a positive return on investment in the federal student financial assistance programs. 3.1 Employment rate. Title IV recipients will maintain employment at rates at least equal to non-recipients. BPS data suggest that employment rates of Title IV recipients and non-recipients are equal for both graduates and non- graduates.
3.2 Return on investment. The benefits of the student aid programs, in terms of increased tax revenues, will continue to exceed their costs. ED study found that for every dollar spent on borrowers to obtain two years of college, $2.19 was returned to the treasury for men and $1.24 for women. The comparable return to treasury for each dollar spent in obtaining four years of college was $5.86 for men and $2.65 for women.
3.1 BPS, 1998 (employment of those attaining a certificate or associate degree) and Baccalaureate and Beyond (B&B), 2001 (employment of those attaining a bachelors degree)
3.2 Analysis of Census data by Office of the Under Secretary's Planning and Evaluation Service (PES), 1998.
• Continue to monitor trends regarding costs/benefits and lifetime earnings.
• Carry out activities described above to increase persistence, degree attainment, and job placement which have direct impact on investment.

4. Ensure high quality program management by institutions. 4.1 QA program participation rate. Increase the number of institutions participating in the Quality Assurance Program to 200 by the year 2000. Currently there are 130 institutions participating in the program.
4.2 Compliance rate. The percentage of postsecondary institutional found to be in compliance with federal requirements will increase each year. Calculated as the number of schools that have had no adverse action (fines, termination, etc.) taken against them compared to the number of schools monitored. A dollar rate based on student aid amounts awarded will also be calculated. Baseline to be determined by November 1998.
4.3 Customer satisfaction. Surveys of institutions will show satisfaction with OPE efforts to ensure increases in management flexibility and reduced burden. Baseline to be determined by July 1998.
4.1 IPOS data, annual, 1997.
4.2 Contractor and IPOS data; annual, 1998.
4.3 OPE/PES customer survey, annual, 1998.
• See key strategies on following page regarding case management and risk analysis.
Other strategies include:
• Promote prevention-based Quality Assurance strategies.
• Continue efforts to reduce regulatory burden, where appropriate.
• Implement incentive-based approach to default prevention (Guaranty Agencies).
• Continue to provide leadership in the community in support of the national priority for quality education.

5. Provide effective program management to ensure that programs are efficiently administered and are cost-effective. 5.1 Application data quality. The accuracy and integrity of data supplied by students to determine aid eligibility, will show continuous yearly improvements. Baseline to be determined by July 1998.
5.2 Timely delivery of the programs. Continue to meet Master Calendar established rates. Baseline is 100%.
5.3 Reduce cost of major student aid computer systems. Per unit contract costs of operation and maintenance of the mission critical systems, including NSLDS, will decrease over time. Baseline to be developed by July 1998.
5.4 Effectiveness of case management targeting. The effectiveness of Institutional Participation and Oversight Service (IPOS) targeting activities will show continuous improvement over baseline. Effectiveness will be measured by the percentage of targeted schools that face adverse action within one year of targeting. A dollar rate will also be computed. Baseline to be determined by November, 1998.
5.5 Sustainment rate. The rate at which adverse findings (e.g., audit liabilities, terminations, fines, program review liabilities) are sustained will show continuous improvement over baseline. Calculated as the percentage of adverse findings upheld/sustained and as the percentage of the amount of fines/liabilities assessed to the amount imposed within one year. Baseline to be developed by November 1998.
5.6 Institutional cash management. Cash management ratios, such as 30-day reporting rates and disbursements to draw down rates, calculated for individual schools and the program as a whole will show the degree to which schools expend their funds according to regulation (e.g within three days of receipt). These ratios will improve over time. Baseline to be developed by May, 1998.
5.7 Increased use of electronic student aid applications. The annual number of students and families submitting or renewing their federal student aid applications electronically will continue to increase each year, almost doubling to 3 million by October 2001.
5.8 System architecture for enhanced aid delivery. By September 1998, ED will have a complete system architecture development and transition strategy for the delivery of federal student financial aid; implementing this design will improve customer service and increase control over federal costs.
5.9 Administrative cost. On a per unit basis, administrative costs will be benchmarked against other comparable programs, e.g. Sallie Mae. Baseline under development.
5.1 Central Processor System data, Quality Assurance Program statistics; annual, 1997.
5.2 OPE program data; annual, 1997.
5.3 OPE program data; annual, 1997.
5.4 IPOS data (risk analysis system), annual, 1997.
5.5 IPOS data, 1998, and annual; Postsecondary Education Participant System, 1998, and annual.
5.6 OPE Program data, quarterly, 1998.
5.7 OPE Program Data, 1997 and annual.
5.8 OPE Data, 1998.
5.9 OPE/Budget Service, annual, 1997.
• Continue Project EASI as well as shorter-term initiatives to increase use of electronic data transmission.
• Pursue data matching with the IRS to improve data quality and reduce burden for Title IV applicants.
• Continue Title IV-wide initiative to improve quality in data systems.
• Expand performance-based contracting.
• Improve responsiveness to customers (e.g. grants reengineering) and regular measurement of customer satisfaction.
• Implement Case Management team monitoring approach in the IPOS to improve school eligibility processes.
• Complete testing of the Risk Analysis model by 09/30/97, modify model, as needed, and implement across IPOS.
• Encourage improved accreditation processes as a means of eliminating poorly performing institutions from participation in the Title IV Programs.
• Promote expanded performance measurement in the administration of the Title IV Programs to better assess and monitor institutional performance.
• More aggressively monitor school and program cash management and accountability performance.
• Integrate the multiple student aid databases based on student level records.
• Use mutually agreed-upon industry standards for data exchanges to stabilize data requirements, improve data integrity, and reduce costly errors.

6. Ensure greater integrity in the National Student Loan Data System (NSLDS) and guarantor and lender reporting systems. 6.1 Data quality. Improvements will be realized in data quality including reliability of data provided by Guaranty Agencies (GAs) and institutions to the NSLDS and data reported by lenders and GAs for ED reporting systems. All potential baselines for NSLDS data quality improved significantly during 1997. Edit failure rates decreased from 15.0 percent to 3.6 percent during the year. Percentage of accounts with current principal balances increased from 50.8% percent to 68.3%. Final decisions on baselines to be selected for data quality will be developed by July 1998. 6.1 Analysis of NSLDS and other systems, ongoing (error rates will be compared with the "to be developed" baseline), 1998. • An NSLDS data integrity plan is under development. Adherence to this plan is expected to increase data quality considerably. Also, the guaranty agencies have recently pledged their support by making their partnership with OPE in resolving NSLDS data problems a high priority.

7. Provide effective information to prospective students and their families about the true cost of obtaining a postsecondary education and the availability of student financial aid. 7.1 Early understanding. Increasing percentages of students from age 12 through high school and their parents will have an accurate assessment of the cost of attending college and the aid available for college by 2002. Baseline to be developed by October 1998.
7.2 Understanding of student academic responsibilities. The percentage of students from age 12 through high school who are aware of the academic requirements for college or postsecondary vocational enrollment will increase annually. Baseline to be developed by October 1998.
7.1 Polling data, annual, 1998.
7.2 Polling data, 1998, and annual.
• Develop partnerships with secondary and middle school counseling organizations, and expand efforts to develop outreach and early awareness materials that emphasize financial planning strategies, and relate postsecondary education costs to available aid.
• Develop outreach program using public service announcements, visual media, and other means to increase student awareness among low-income and at-risk students.
• Information on postsecondary educational costs and availability have been added to the OPE Home Page on the Internet.

Pell Grant Performance Measures -- $7,594,000,000 (FY 99)

Goal: To assist financially needy undergraduate students meet their postsecondary education costs.

Objective Indicators Source and Next Update Strategies

Recipients

1. Provide continued access to low income strata students. 1.1 Student income distribution. Pell grant funds will continue to be targeted to those students with the greatest financial need. At least 75% of Pell Grant funds will go to students below 150% of poverty level. Currently 76% of Pell Grant funds do so. 1.1 Program data, annual, 1998. • OPE will help to assure that the maximum Pell award is high enough so that the Pell Grant, along with other financial aid, will ensure access for all eligible recipients. In addition, we expect that our reauthorization proposals will address effective targeting.

2. Maintain a high level of recipient satisfaction. 2.1 Overall satisfaction with Pell Grant Program. Satisfaction will show continuous improvement over time. Baseline measure will be established via initial survey. 2.1 Office of Postsecondary Education (OPE)/Office of the Under Secretary's Planning and Evaluation Service (PES) student aid applicant survey, annual, 1998. • Establish a "backup" processing system that will eliminate the possibility of any major delays in application processing.
• Improved monitoring of the Central Processing System and Public Inquiry Contract to help assure reasonable turnaround time in application processing and better communications with recipients.

Institutions

3. To streamline delivery of funds to institutions and return high quality data to the department. 3.1 To continue to reduce the transaction turnaround time. Decrease the current transaction turnaround time through implementation of the just-in-time delivery system. Current turnaround is 7-10 days. 3.1 Program data, annual, 1998. • Publication of the "just-in-time" payment regulations will serve to streamline delivery of funds.
• Elimination of the paper Financial Aid Transcripts as well as implementation of the "just-in-time" delivery system, should increase school satisfaction.

4. Maintain a high level of institutional satisfaction. 4.1 Overall satisfaction with the Pell Grant Program. Institutions have a high degree of satisfaction with the delivery of the program. Initial survey will establish baseline satisfaction rate. 4.1 Survey, annual, 1998.

Taxpayers

5. Provide a program that is cost-effective for the taxpayer. 5.1 Contractor performance. All major deliverables will meet established quality standards and be produced on time and within cost. Prototype contractor report is under development. 5.1 Evaluation by GCS and COTR, monthly, 1998. • Incorporation of performance based provisions in the major Pell contracts, as the procurements come up for recompetition, will make the program more cost-effective for the taxpayer.

6. Provide strong fiscal management of the program. 6.1 Positive audits results, (no material internal control weaknesses for the Pell Grant Program). No material internal control weaknesses identified in the Pell Grant portion of ED's Department-wide financial statement audit. No material weaknesses were identified as a result of the most recent financial statement audit. 6.1 Financial program audits, annual, 1998. • Enhancements to data through our Data Quality Plan as well as increased automation of financial reporting through the EDCAPS system will improve the fiscal management of the program.

Campus-Based Programs -- $1,649,000,000 (FY 99)

Goal: To successfully manage the Campus-Based Programs in an efficient and cost-effective manner to help students and their parents meet postsecondary education costs.

Objective Indicators Source and Next Update Strategies

Students

1. Maintain a high level of student satisfaction. 1.1 Overall satisfaction with campus-based programs. Benchmark to be determined via initial survey. 1.1 Office of Postsecondary Education (OPE)/ Office of the Under Secretary's Planning and Evaluation Service (PES) student aid applicants survey, annual, 1998. • Students will be more satisfied due to the increased funding for Federal Work- Study and our efforts to align jobs better with academic and career goals. In addition we are strongly encouraging schools to make jobs available tutoring underprivileged children in their communities. We believe students will find this tutoring to be very rewarding.

Institutions - all Campus-Based programs

2. Improve institutional utilization of campus-based program funds. 2.1 Percent of funds available for reallocation. Amount of funds available for reallocation will be maintained at current low level. For 1995-96, reallocations ($12.5 million) represented about 1% of the funds allocated ($1.3 billion). 2.1 OPE program data, annual, 1998. • A workgroup has been formed which will be instructing schools on the appropriate expenditure of funding.

3. Maintain a high level of institutional satisfaction. 3.1 Overall institutional satisfaction with the campus-based programs. Exceed the overall satisfaction rate of 75%. Baseline to be determined via initial survey. 3.1 Performance report, annual, 1998. Benchmark data to be established via survey OPE Customer Complaints • Elimination of paper Financial Aid Transcripts will make schools happier with our services. Also in FY 1998, we plan to make the FISAP available to schools in a windows environment.

Federal Work-Study (FWS) Program

4. Improve the level of participation in community service under the FWS Program. 4.1 Percent of program funds spent on community service. Meet or exceed the current percent of expenditures used for community service, especially America Reads. Preliminary level = 7.93% 4.1 OPE program data, annual, 1998. • As an incentive, schools using reading tutors are waived from having to provide their "match" to federal funds.
• Assure timely disbursement of funds in support of America Reads.

5. Improve placement of FWS students in jobs related to academic/career goals. 5.1 Student placement rates. Rates at which students are placed in related jobs will increase. Baseline to be developed. 5.1 National Center for Education Statistics (NCES) data, survey of institutions, annual, 1998. • Our Job Locator and Development Program uses Federal Work/Study money to create jobs that are relevant for students.

Federal Perkins loan program

6. Improve the management of the Federal Perkins Loan Program portfolio. 6.1 Cohort default rate. Rate will decrease from current level. For borrowers entering repayment during the 1993-94 award year and who were more than 240 days in default on June 30, 1995, the national cohort default rate is 10.75%. For the previous year, the rate was 11.42%.
6.2 Collection rate. The program collection rate will continually increase over baseline. Baseline to be developed.
6.1 OPE program data, annual, 1998.
6.2 OPE program data, annual, 1998.
• Our Default Reduction Assistance Program serves to help schools in preventing defaults.

Taxpayers

7. Provide a program that is cost-effective for the taxpayer. 7.1 Contractor performance. All major deliverables will meet established quality standards and be produced on time and within cost or budget. Prototype contractor report is under development. 7.1 Evaluation by ED's Grants and Contracts Service (GCS) and OPE's contract monitor, monthly, 1998. • All Task Orders under the new Campus-Based Systems and Development Contract will be performance-based. The contract also contains an automated statistically driven quality control/quality assurance (QC/QA) subsystem. Also under EDCAPS, we are re-engineering the Campus-based accounting system which will promote the continued ability to reconcile Campus-based expenditures.

8. Provide strong fiscal management of the program. 8.1 Positive audit results, i.e., no material weaknesses for the Campus- Based Programs. No material internal control weaknesses will be identified in the Campus-Based Programs' portion of ED's Department-wide financial statement audit. No material weaknesses were identified in the FY 1995 Department-wide financial statement audit. 8.1 Financial program audits, annual, 1998. • As indicated above, the improved campus-based accounting system will result in improved fiscal management.

State Student Incentive Grant (SSIG) Program -- $0 (FY 99)

Goal: To provide increased access to postsecondary education for low-income students.

Objectives Indicators Source and Next Update Strategies

1. Eligible low- and middle-income students will have the same access to postsecondary education as high-income students. 1.1 Student income distribution. SSIG Program funds will continue to be targeted to those students with the greatest financial need. At least 70% of SSIG Program funds will go to students having income of $20,000 or less. Currently 72% of SSIG Program funds go to students having income of $20,000 or less.
1.2 Availability of program funds. SSIG federal funds will be accurately allocated to states and state matching will be monitored to ensure funds are available to eligible students. Currently, all states participating in SSIG meet or exceed the required state match.
1.3 Leveraging effects. SSIG federal incentive funds will leverage increasing amounts of state grant monies. (Baseline to be developed.)
1.1 Performance report data, annual, 1998.
1.2 Performance report data, annual, 1998.
1.3 Performance report data, annual, 1998.
• Ensure that state student eligibility systems target grants to neediest students.
• Closely monitor state matching.

Federal Family Education Loan Program (FFEL) -- $1,764,317,000 (FY 99)

Goal: To successfully deliver and manage the FFEL Program in an efficient and cost-effective manner to help students and their parents meet postsecondary education costs.

Objectives Indicators Source and Next Update Strategies

Borrowers

1. Undertake initiatives to keep default rate at a minimum. 1.1 Program default rate. The FFEL cohort default rate, the percentage of borrowers leaving school who default within two years, will decline to a level of 10% or less by 2002 (rate to be compared to other similar government and consumer ). For FY 1990 - 1995, the rates were 22.4%, 17.8%, 15.0%,, 11.6%, and 10.7%, and 10.4% respectively, dropping by more than 53% over the five year period. 1.1 Office of Postsecondary Education (OPE) data, annual, 1998. • Make it economically attractive for lenders and guaranty agencies to prevent defaults. (HEA reauthorization proposal).
• Hold schools liable for loan costs if a cohort default rate appeal is unsuccessful, thus discouraging frivolous appeals and removing high default rate schools more quickly.
• Encouraging the use of flexible repayment options to reduce delinquencies and defaults.
• Disseminate information to students on the cost of defaulting.

2. Help students to manage debt burden. 2.1 Debt burden. The percentage of students with student loan debt repayments exceeding 10% of their income will remain stable or decline over time. Among 1992-1993 bachelor's degree recipients making loan payments, 29% had required payments that were more than 10% of their income. (Analysis of 1994 Baccalaureate and Beyond Study)
2.2 Cost of flexible repayment. Impact will be budget neutral.
2.1 Baccalaureate and Beyond Study, 2001. (Efforts are also underway to develop an annual measure of debt burden).
2.2 Office of the Under Secretary's budget service, annual 1998.
• Monitor debt burden and default rates to assess the costs and benefits of flexible repayment options.
• Work to lower the in-school interest rate, reduce loan origination fees, and reduce allowable frequency of capitalization of interest by lenders.
• Allow borrowers who are consolidating subsidized loans into the FFEL Consolidation Program to keep the interest subsidy benefit.
• Provide electronic exit counseling to assure graduating students will understand repayment obligations and be able to manage their debt burden.

3. Maintain a high level of borrower satisfaction. 3.1 Overall satisfaction with the FFEL Program. FFEL borrower satisfaction will continue to improve until at least a 90% level is achieved. One measure of satisfaction with the loan process - "overall level of ease in obtaining a loan" - shows that 84% of FFEL student borrowers found the process to be somewhat or very easy. Satisfaction measures related to borrowers in repayment are currently being collected. 3.1 Program evaluation, Macro, Inc., 1997. • Reduce loan processing time by use of a multi-year promissory note.
• Competition with Direct Loans will lead to service improvements by lenders and guaranty agencies.
• Expansion of the "common line" electronic application process will reduce borrower burden and application turnaround time.

Schools, lenders, guaranty agencies

4. Ensure access to loans. 4.1 Continued access to FFEL loans. No eligible student will be denied access to a loan. Based on monitoring of borrower complaints, we are not aware of any major current problems with eligible student access to loans. 4.1 Borrower complaint data (GLOS), ongoing, 1998. • Strengthen lenders of last resort to assure no significant access problems will develop. (HEA reauthorization proposal).
• Consult with the community and take quick action to resolve any access problems that may arise.

5. Maintain a high level of school satisfaction. 5.1 Overall satisfaction with the FFEL Program. Level of satisfaction will meet or exceed the level of school satisfaction measured last year. In award year 1995-96, 79% of FFEL schools reported they were satisfied with the program. 5.1 Program evaluation, Macro, 1997. • Enhancements to NSLDS and elimination of the Financial Aid Transcripts will improve schools' ability to access borrower records and reduce burden.
• Ease institutional burden through the use of a multi-year promissory note and by requiring a single loan proration formula and eliminating proration requirements for programs of study longer than two years. (HEA reauthorization proposal)

Effective program management

6. Provide a program that is cost-effective for the taxpayer. 6.1 Gross default rate. Projects future defaults over the life a loan cohort. The rates, for the FY '92-'96 cohorts are currently estimated at 32.4%, 27.5%, 23.4%, 21.1%, and 20% respectively.
6.2 Loss rate. Projects the overall rate of the Department's liability for a cohort of defaulted loans after taking into account collections on defaulted loans. The rates for the FY '92-'96 cohorts are currently estimated at 8%, 5.2%, 3.5%, 2.6%, and 2.1% respectively.
6.3 Annual delinquency rate. Measures the dollar amount of loans "past due" as a percentage of dollars in repayment. This rate will remain level or decrease each year (to be measured by a floating three year average). Baseline to be determined by June 1998.
6.4 Annual collection rate. Measures annual net default dollars collected divided by dollars in default. This rate will increase each year until reaching 10 percent. This rate, as of 9/30/97, is 8.6%, reflecting total collections of over $2.1 billion compared to total amount owed of nearly $24.5 billion.
6.5 Contractor performance. All major deliverables will be produced on time, within cost or budget, and meet an independent assessment of quality. Prototype contractor report is under development.
6.1 Office of the Under Secretary, Budget Service, annual, 1997.
6.2 Budget Service, annual, 1997.
6.3 OPE data, annual, 1997.
6.4 OPE data, quarterly, 1997.
6.5 Evaluation by contract monitor, monthly (exceptions reporting on deliverables and dollars expended), 1997.
• Closely monitor the gross default and loss rates while striving toward continuous improvement. Any adverse trends will be carefully analyzed for development of appropriate management corrective action.
• Implement incentive-based approach to default prevention, as stated under the first "Borrower" objective. To minimize the loss on defaults, see to (1) access data on employment from the states, (2) insure that states offset their employees salaries upon ED's request, (3) access data from state licensing agencies, and, (4) access to information from all federal agencies for purposes of debt collection.
• Expand performance-based contracting.
• Seek authority to eliminate bankruptcy as an option for discharging student loans in order to save government resources and provide for more equitable treatment of borrowers.
• Seek to extend the period for reporting negative credit information from the currently allowable seven years to until the loan is paid in full.
• Seek authority to compute lender special allowance on an annual basis instead of the current quarterly basis and for the direct collection of lender fees.

7. Continue to provide strong fiscal management of the program. 7.1 FFEL financial statements. No material internal control weaknesses will be identified for FFEL in ED's department-wide financial statement audit (fault free audit). Three material internal control weaknesses were cited in the FFEL portion of ED's 1995 department-wide financial statement audit.
7.2 Lender and guaranty agency audit results. The percent of lenders and guaranty agencies that are found to be in compliance in all significant program areas will approach 100%. Baseline will be development by May, 1998.
7.3 Strengthening quality of audits. Assessments of guaranty agency and lender audits will show steadily improved quality over time. Baseline will be developed by May, 1998.
7.1 Financial statement audits, annual, 1997.
7.2 Lender and guaranty agency audits, annual, 1997.
7.3 OIG, ongoing, 1997.
• Work with ED's Office of the Inspector General (OIG) to assure that all audits, including third party audits, are conducted in accordance with auditing standards.
• Work with OIG and OMB to refine audit guidance so that program specific information can be obtained This will enhance our ability to monitor program funds and assets and will improve ED's financial statement.

Federal Direct Student Loans Program -- $525,484,000 (FY 99)

Goal: To successfully deliver and manage the Direct Loan Program in an efficient and cost-effective manner to help students and their parents meet postsecondary education costs.

Objective Indicators Source and Next Update Strategies

Borrowers

1. Undertake initiatives to keep default rate at a minimum. 1.1 Program default rate. The Direct Loan Program cohort default rate, the percentage of borrowers leaving school who default within two years, will remain at a level of 10% or less through 2002. (Rate will be compared to other similar government and consumer loans.) The FY 1995 cohort default rate for direct loans was 3.8%. This was the first year a rate was measured for the program as the repayment portfolio had previously been too young and not reflective of total population in a mature portfolio. 1.1 Office of Postsecondary Education (OPE) data, annual, beginning in 1998. • Use performance-based incentives and disincentives in the servicing contract to help reduce the number of delinquent loans and the number of loans that default.
• Hold schools liable for loan costs if a cohort default rate appeal is unsuccessful, thus discouraging frivolous appeals and removing high default rate schools more quickly.
• Encouraging the use of income-contingent and other flexible repayment options to reduce delinquencies and defaults.
• Disseminating information to students on the cost of defaulting.

2. Help students to manage debt burden. 2.1 Debt burden. The percentage of students with student loan debt repayments exceeding 10% of their monthly income will remain stable or decline over time. Among 1992-1993 bachelor's degree recipients making loan payments, 29% had required payments that were 10% or more of their income. (Analysis of 1994 Baccalaureate and Beyond Study)
2.2 Cost of flexible repayment. Impact will be budget neutral. Flexible repayment, under current credit reform accounting rules, are currently projected to show a cost savings.
2.1 Baccalaureate and Beyond Study, 2001. (Efforts are also underway to develop an annual measure of debt burden).
2.2 Office of the Under Secretary's budget service, 1998, and annual.
• Monitor debt burden and default rates to assess the costs and benefits of flexible repayment options.
• Work to implement proposals to lower the in-school interest rate and reduce loan origination fees.
• Provide electronic exit counseling to assure graduating students will understand repayment obligations and be able to manage their debt burden.

Schools

3. Maintain a high level of borrower satisfaction. 3.1 Borrowers' overall satisfaction with Direct Loan Program. Direct Loan borrower satisfaction will increase until a rate of at least 90% is achieved. One measure of satisfaction with the direct loan program--"overall level of ease in obtaining a loan"--shows that 85% of direct loan student borrowers found the process to be somewhat or very easy. Satisfaction measures related to borrowers in repayment are currently being collected. 3.1 Macro, Inc., program evaluation, 1997. • Assure the smooth running of the Direct Loan origination and servicing contracts.
• Reduce loan processing time by use of a multi-year promissory note.
• Develop Direct Plus Loan Repayment Book to address the specific needs of parent borrowers.
• Allow borrowers to review and submit changes to their loan information with the Direct Loan Servicer via the Internet.

4. Streamline loan consolidation process. 4.1 Time taken for consolidation process. During 1998, the length of time to fully complete a loan consolidation application will average no more than 60-90 days.
4.2 Borrower satisfaction with consolidation. Future surveys of borrowers will show that an increasing percentage of applicants for loan consolidation are highly satisfied with the timeliness and accuracy of the loan consolidation process.
4.1 OPE data, annual.
4.2 Customer Satisfaction Surveys, annual beginning in 1998.
• Assure the smooth running of the loan consolidation contract by providing incentives to consolidate loans accurately within an industry-wide accepted time frame.
• Improve the loan verification process.
• Work toward electronic payment to holders of loans being consolidated. A pilot project with Sallie Mae has begun where payment by check has been replaced with electronic payment.

5. Maintain a high level of school satisfaction. 5.1 Institutional participation rate. The institutional Direct Loan participation rate will continue to increase each year. Current direct loan participation rate is about 35%..
5.2 Schools' overall satisfaction with the Direct Loan Program. Level of satisfaction will meet or exceed the level of school satisfaction measured last year. (Will track as a 3-year average.) In award year 1995-96, 83% of Direct Loan institutions reported satisfaction with the program.
5.1 OPE Program data, annual, 1998.
5.2 Macro, Inc. program evaluation, 1997.
• Maintain a commitment to enhanced program delivery through integrated processes and systems that are responsive to customer needs.
• Enhancements to NSLDS and elimination of the Financial Aid Transcripts will improve schools' ability to access borrower records and reduce burden.
• Ease institutional burden through the use of a multi-year promissory note and by requiring a single loan proration formula and eliminating proration requirements for programs of study longer than two years. (HEA reauthorization proposal)

6. Provide a program that is cost-effective for the taxpayer. 6.1 Gross default rate. Projects future defaults over the life a loan cohort. The rates for the FY '94-'96 cohorts are currently estimated at 19.2%, 19.7%, and 21%, respectively. Note: the upward trend in projected rates here (and in loss rates below) is largely a result in a shift in the mix of participating schools. Since the program's initial year, many more proprietary and other higher default rate schools have joined the program. These rate increases were not unexpected.
6.2 Loss rate. Projects the overall rate of the Department's liability for a cohort of defaulted loans after taking into account collections on defaulted loans. The rates for the FY '94-'96 cohorts are currently estimated at 6.7%, 6.5%, and 7%, respectively
6.3 Annual delinquency rate. Measures the dollar amount of loans "past due" as a percentage of dollars in repayment. Upon sufficient maturity of the Direct Loan repayment portfolio (estimated to be beginning in 2001), this rate will remain level or decrease each year (to be measured by a floating three year average rate). Until then, the FFEL delinquency rate will be a ceiling for Direct Loans. Baseline to be developed by June 1998.
6.4 Annual collection rate. Measures annual net default dollars collected divided by dollars in default. This rate will increase each year until reaching 10 percent. The annual collection rate as of 09/30/97 is about 1 percent. However, the portfolio will not reach sufficient maturity for the rate to be meaningful for the next few years.
6.5 Contractor performance. All major deliverables will be produced on time, within budget, and meet an independent assessment of quality. Prototype contractor report is under development.
6.1 Budget Service, annual, 1997.
6.2 Budget Service, annual, 1997.
6.3 OPE data, annual, 1997.
6.4 OPE data, annual, 1997.
6.5 Evaluation by contract monitoring staff, monthly (exceptions reporting on deliverables and dollars), 1997.
• Closely monitor the gross default and loss rates while striving toward continuous improvement. Any adverse trends will be carefully analyzed for development of appropriate management corrective action.
• Expand performance-based contracting.
• Seek authority to eliminate bankruptcy as an option for discharging student loans in order to save government resources and provide for more equitable treatment of borrowers.
• Seek to extend the period for reporting negative credit information from the currently allowable seven years to until the loan is paid in full.
• To minimize the loss on defaults, seek to (1) access data on employment from the states, (2) insure that states offset their employees salaries upon ED's request, (3) access data from state licensing agencies, and, (4) access to information from all federal agencies for purposes of debt collection.

7. Continue to provide strong fiscal management of the program. 7.1 Positive audit findings. No material internal control weaknesses will be identified for the Direct Loan Program in ED's Department-wide financial statement audit. No material internal control weaknesses were identified in 1995 audit. 7.1 Financial program audits, 1997. • Assure system design supports the accurate and timely reporting of direct loan financial transactions with emphasis on systems coordination and maintenance of audit trails.

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[Vocational and Adult Education]

[Higher Education]

Office of Postsecondary Education (OPE): Office-Wide Performance Indicators
Goal: To ensure access to postsecondary education.
Objectives	Indicators	Source and Next Update	Strategies
1. Low- and middle-income students will have the same access to postsecondary education as high-income students.	1.1 Percent of unmet need. Considering all sources of financial aid, the percent of unmet need, especially for low-income students, will show continuous decreases over time. In 1994-95, percent of unmet need was 27% for all students ranging from 44% for low-income independent students to 6% for upper-income dependent students. The gap for low-income independent students decreased by 10% since 1992-93 when it was 54%. 1.2 College enrollment rates. Postsecondary education enrollment rates will increase each year for all students, while the enrollment gap between low- and high-income and minority and non-minority high school graduates will decrease each year. In 1996, there was a 30.2 percent gap between low- and high-income high school graduates aged 18-19 enrolled in college. This represents a 4.9 percent decrease from 1995 when the gap was 35.1 percent. High income (top 20%) 79.3 % Middle income (middle 60%) 58.2 % Low income (bottom 20%) 49.1% 1.3 Student-focused system to support postsecondary education. By October 2001, there will be a single point of contact that allows students to get information on federal student aid, apply for aid, and have their eligibility for aid determined within four days of electronic application, cutting in half the current processing time.	1.1 National Postsecondary Student Aid Study (NPSAS) 1995/96 survey, 2001. 1.2 Current Population Statistics (CPS), 1997, and annual. 1.3 OPE Program Data, 1997.	• Work to implement the HOPE Scholarship initiative and tax deduction for postsecondary education and lifelong learning. • Further expand funding for the Pell Grant Program and College Work Study Program. Work to assure that TRIO and other support programs are effective and available to needy students. • Expand upon the current information dissemination strategies. • Monitor loan availability and assess the adequacy of current loan limits. • Monitor enrollment and population trends and identify any problems in enrollment of low-income students. • Develop procedures to give students and families a simple mechanism for electronically applying for student financial aid through the WWW (legislative authority may be needed for full implementation).
2. More students will persist in postsecondary education and attain degrees and certificates.	2.1 Completion rate. Completion rates for all full-time, eligible, degree-seeking students in four-year and two-year colleges will improve, while the gap in completion rates between low- and high- income and minority and non-minority students will decrease. As a baseline, BPS data indicate a gap of approximately 23% in four-year college completion within five years between low and high income students. For students entering four-year colleges in 1990, the percentage that had completed by 1994, is as follows: Highest income quartile: 57.2% Second income quartile: 47.4% Third income quartile: 40.4% Lowest income quartile: 34.4%	2.1 Beginning Postsecondary Students (BPS) Survey (completion rates), 2001.	• Enhance the effectiveness of TRIO projects through (1) implementation of recommendations arising from the on-going evaluation of the programs and, (2) through more effective monitoring and dissemination of information regarding effective practices.
3. Taxpayers will have a positive return on investment in the federal student financial assistance programs.	3.1 Employment rate. Title IV recipients will maintain employment at rates at least equal to non-recipients. BPS data suggest that employment rates of Title IV recipients and non-recipients are equal for both graduates and non- graduates. 3.2 Return on investment. The benefits of the student aid programs, in terms of increased tax revenues, will continue to exceed their costs. ED study found that for every dollar spent on borrowers to obtain two years of college, $2.19 was returned to the treasury for men and $1.24 for women. The comparable return to treasury for each dollar spent in obtaining four years of college was $5.86 for men and $2.65 for women.	3.1 BPS, 1998 (employment of those attaining a certificate or associate degree) and Baccalaureate and Beyond (B&B), 2001 (employment of those attaining a bachelors degree) 3.2 Analysis of Census data by Office of the Under Secretary's Planning and Evaluation Service (PES), 1998.	• Continue to monitor trends regarding costs/benefits and lifetime earnings. • Carry out activities described above to increase persistence, degree attainment, and job placement which have direct impact on investment.
4. Ensure high quality program management by institutions.	4.1 QA program participation rate. Increase the number of institutions participating in the Quality Assurance Program to 200 by the year 2000. Currently there are 130 institutions participating in the program. 4.2 Compliance rate. The percentage of postsecondary institutional found to be in compliance with federal requirements will increase each year. Calculated as the number of schools that have had no adverse action (fines, termination, etc.) taken against them compared to the number of schools monitored. A dollar rate based on student aid amounts awarded will also be calculated. Baseline to be determined by November 1998. 4.3 Customer satisfaction. Surveys of institutions will show satisfaction with OPE efforts to ensure increases in management flexibility and reduced burden. Baseline to be determined by July 1998.	4.1 IPOS data, annual, 1997. 4.2 Contractor and IPOS data; annual, 1998. 4.3 OPE/PES customer survey, annual, 1998.	• See key strategies on following page regarding case management and risk analysis. Other strategies include: • Promote prevention-based Quality Assurance strategies. • Continue efforts to reduce regulatory burden, where appropriate. • Implement incentive-based approach to default prevention (Guaranty Agencies). • Continue to provide leadership in the community in support of the national priority for quality education.
5. Provide effective program management to ensure that programs are efficiently administered and are cost-effective.	5.1 Application data quality. The accuracy and integrity of data supplied by students to determine aid eligibility, will show continuous yearly improvements. Baseline to be determined by July 1998. 5.2 Timely delivery of the programs. Continue to meet Master Calendar established rates. Baseline is 100%. 5.3 Reduce cost of major student aid computer systems. Per unit contract costs of operation and maintenance of the mission critical systems, including NSLDS, will decrease over time. Baseline to be developed by July 1998. 5.4 Effectiveness of case management targeting. The effectiveness of Institutional Participation and Oversight Service (IPOS) targeting activities will show continuous improvement over baseline. Effectiveness will be measured by the percentage of targeted schools that face adverse action within one year of targeting. A dollar rate will also be computed. Baseline to be determined by November, 1998. 5.5 Sustainment rate. The rate at which adverse findings (e.g., audit liabilities, terminations, fines, program review liabilities) are sustained will show continuous improvement over baseline. Calculated as the percentage of adverse findings upheld/sustained and as the percentage of the amount of fines/liabilities assessed to the amount imposed within one year. Baseline to be developed by November 1998. 5.6 Institutional cash management. Cash management ratios, such as 30-day reporting rates and disbursements to draw down rates, calculated for individual schools and the program as a whole will show the degree to which schools expend their funds according to regulation (e.g within three days of receipt). These ratios will improve over time. Baseline to be developed by May, 1998. 5.7 Increased use of electronic student aid applications. The annual number of students and families submitting or renewing their federal student aid applications electronically will continue to increase each year, almost doubling to 3 million by October 2001. 5.8 System architecture for enhanced aid delivery. By September 1998, ED will have a complete system architecture development and transition strategy for the delivery of federal student financial aid; implementing this design will improve customer service and increase control over federal costs. 5.9 Administrative cost. On a per unit basis, administrative costs will be benchmarked against other comparable programs, e.g. Sallie Mae. Baseline under development.	5.1 Central Processor System data, Quality Assurance Program statistics; annual, 1997. 5.2 OPE program data; annual, 1997. 5.3 OPE program data; annual, 1997. 5.4 IPOS data (risk analysis system), annual, 1997. 5.5 IPOS data, 1998, and annual; Postsecondary Education Participant System, 1998, and annual. 5.6 OPE Program data, quarterly, 1998. 5.7 OPE Program Data, 1997 and annual. 5.8 OPE Data, 1998. 5.9 OPE/Budget Service, annual, 1997.	• Continue Project EASI as well as shorter-term initiatives to increase use of electronic data transmission. • Pursue data matching with the IRS to improve data quality and reduce burden for Title IV applicants. • Continue Title IV-wide initiative to improve quality in data systems. • Expand performance-based contracting. • Improve responsiveness to customers (e.g. grants reengineering) and regular measurement of customer satisfaction. • Implement Case Management team monitoring approach in the IPOS to improve school eligibility processes. • Complete testing of the Risk Analysis model by 09/30/97, modify model, as needed, and implement across IPOS. • Encourage improved accreditation processes as a means of eliminating poorly performing institutions from participation in the Title IV Programs. • Promote expanded performance measurement in the administration of the Title IV Programs to better assess and monitor institutional performance. • More aggressively monitor school and program cash management and accountability performance. • Integrate the multiple student aid databases based on student level records. • Use mutually agreed-upon industry standards for data exchanges to stabilize data requirements, improve data integrity, and reduce costly errors.
6. Ensure greater integrity in the National Student Loan Data System (NSLDS) and guarantor and lender reporting systems.	6.1 Data quality. Improvements will be realized in data quality including reliability of data provided by Guaranty Agencies (GAs) and institutions to the NSLDS and data reported by lenders and GAs for ED reporting systems. All potential baselines for NSLDS data quality improved significantly during 1997. Edit failure rates decreased from 15.0 percent to 3.6 percent during the year. Percentage of accounts with current principal balances increased from 50.8% percent to 68.3%. Final decisions on baselines to be selected for data quality will be developed by July 1998.	6.1 Analysis of NSLDS and other systems, ongoing (error rates will be compared with the "to be developed" baseline), 1998.	• An NSLDS data integrity plan is under development. Adherence to this plan is expected to increase data quality considerably. Also, the guaranty agencies have recently pledged their support by making their partnership with OPE in resolving NSLDS data problems a high priority.
7. Provide effective information to prospective students and their families about the true cost of obtaining a postsecondary education and the availability of student financial aid.	7.1 Early understanding. Increasing percentages of students from age 12 through high school and their parents will have an accurate assessment of the cost of attending college and the aid available for college by 2002. Baseline to be developed by October 1998. 7.2 Understanding of student academic responsibilities. The percentage of students from age 12 through high school who are aware of the academic requirements for college or postsecondary vocational enrollment will increase annually. Baseline to be developed by October 1998.	7.1 Polling data, annual, 1998. 7.2 Polling data, 1998, and annual.	• Develop partnerships with secondary and middle school counseling organizations, and expand efforts to develop outreach and early awareness materials that emphasize financial planning strategies, and relate postsecondary education costs to available aid. • Develop outreach program using public service announcements, visual media, and other means to increase student awareness among low-income and at-risk students. • Information on postsecondary educational costs and availability have been added to the OPE Home Page on the Internet.

Pell Grant Performance Measures -- $7,594,000,000 (FY 99)
Goal: To assist financially needy undergraduate students meet their postsecondary education costs.
Objective	Indicators	Source and Next Update	Strategies
Recipients
1. Provide continued access to low income strata students.	1.1 Student income distribution. Pell grant funds will continue to be targeted to those students with the greatest financial need. At least 75% of Pell Grant funds will go to students below 150% of poverty level. Currently 76% of Pell Grant funds do so.	1.1 Program data, annual, 1998.	• OPE will help to assure that the maximum Pell award is high enough so that the Pell Grant, along with other financial aid, will ensure access for all eligible recipients. In addition, we expect that our reauthorization proposals will address effective targeting.
2. Maintain a high level of recipient satisfaction.	2.1 Overall satisfaction with Pell Grant Program. Satisfaction will show continuous improvement over time. Baseline measure will be established via initial survey.	2.1 Office of Postsecondary Education (OPE)/Office of the Under Secretary's Planning and Evaluation Service (PES) student aid applicant survey, annual, 1998.	• Establish a "backup" processing system that will eliminate the possibility of any major delays in application processing. • Improved monitoring of the Central Processing System and Public Inquiry Contract to help assure reasonable turnaround time in application processing and better communications with recipients.
Institutions
3. To streamline delivery of funds to institutions and return high quality data to the department.	3.1 To continue to reduce the transaction turnaround time. Decrease the current transaction turnaround time through implementation of the just-in-time delivery system. Current turnaround is 7-10 days.	3.1 Program data, annual, 1998.	• Publication of the "just-in-time" payment regulations will serve to streamline delivery of funds. • Elimination of the paper Financial Aid Transcripts as well as implementation of the "just-in-time" delivery system, should increase school satisfaction.
4. Maintain a high level of institutional satisfaction.	4.1 Overall satisfaction with the Pell Grant Program. Institutions have a high degree of satisfaction with the delivery of the program. Initial survey will establish baseline satisfaction rate.	4.1 Survey, annual, 1998.
Taxpayers
5. Provide a program that is cost-effective for the taxpayer.	5.1 Contractor performance. All major deliverables will meet established quality standards and be produced on time and within cost. Prototype contractor report is under development.	5.1 Evaluation by GCS and COTR, monthly, 1998.	• Incorporation of performance based provisions in the major Pell contracts, as the procurements come up for recompetition, will make the program more cost-effective for the taxpayer.
6. Provide strong fiscal management of the program.	6.1 Positive audits results, (no material internal control weaknesses for the Pell Grant Program). No material internal control weaknesses identified in the Pell Grant portion of ED's Department-wide financial statement audit. No material weaknesses were identified as a result of the most recent financial statement audit.	6.1 Financial program audits, annual, 1998.	• Enhancements to data through our Data Quality Plan as well as increased automation of financial reporting through the EDCAPS system will improve the fiscal management of the program.

Campus-Based Programs -- $1,649,000,000 (FY 99)
Goal: To successfully manage the Campus-Based Programs in an efficient and cost-effective manner to help students and their parents meet postsecondary education costs.
Objective	Indicators	Source and Next Update	Strategies
Students
1. Maintain a high level of student satisfaction.	1.1 Overall satisfaction with campus-based programs. Benchmark to be determined via initial survey.	1.1 Office of Postsecondary Education (OPE)/ Office of the Under Secretary's Planning and Evaluation Service (PES) student aid applicants survey, annual, 1998.	• Students will be more satisfied due to the increased funding for Federal Work- Study and our efforts to align jobs better with academic and career goals. In addition we are strongly encouraging schools to make jobs available tutoring underprivileged children in their communities. We believe students will find this tutoring to be very rewarding.
Institutions - all Campus-Based programs
2. Improve institutional utilization of campus-based program funds.	2.1 Percent of funds available for reallocation. Amount of funds available for reallocation will be maintained at current low level. For 1995-96, reallocations ($12.5 million) represented about 1% of the funds allocated ($1.3 billion).	2.1 OPE program data, annual, 1998.	• A workgroup has been formed which will be instructing schools on the appropriate expenditure of funding.
3. Maintain a high level of institutional satisfaction.	3.1 Overall institutional satisfaction with the campus-based programs. Exceed the overall satisfaction rate of 75%. Baseline to be determined via initial survey.	3.1 Performance report, annual, 1998. Benchmark data to be established via survey OPE Customer Complaints	• Elimination of paper Financial Aid Transcripts will make schools happier with our services. Also in FY 1998, we plan to make the FISAP available to schools in a windows environment.
Federal Work-Study (FWS) Program
4. Improve the level of participation in community service under the FWS Program.	4.1 Percent of program funds spent on community service. Meet or exceed the current percent of expenditures used for community service, especially America Reads. Preliminary level = 7.93%	4.1 OPE program data, annual, 1998.	• As an incentive, schools using reading tutors are waived from having to provide their "match" to federal funds. • Assure timely disbursement of funds in support of America Reads.
5. Improve placement of FWS students in jobs related to academic/career goals.	5.1 Student placement rates. Rates at which students are placed in related jobs will increase. Baseline to be developed.	5.1 National Center for Education Statistics (NCES) data, survey of institutions, annual, 1998.	• Our Job Locator and Development Program uses Federal Work/Study money to create jobs that are relevant for students.
Federal Perkins loan program
6. Improve the management of the Federal Perkins Loan Program portfolio.	6.1 Cohort default rate. Rate will decrease from current level. For borrowers entering repayment during the 1993-94 award year and who were more than 240 days in default on June 30, 1995, the national cohort default rate is 10.75%. For the previous year, the rate was 11.42%. 6.2 Collection rate. The program collection rate will continually increase over baseline. Baseline to be developed.	6.1 OPE program data, annual, 1998. 6.2 OPE program data, annual, 1998.	• Our Default Reduction Assistance Program serves to help schools in preventing defaults.
Taxpayers
7. Provide a program that is cost-effective for the taxpayer.	7.1 Contractor performance. All major deliverables will meet established quality standards and be produced on time and within cost or budget. Prototype contractor report is under development.	7.1 Evaluation by ED's Grants and Contracts Service (GCS) and OPE's contract monitor, monthly, 1998.	• All Task Orders under the new Campus-Based Systems and Development Contract will be performance-based. The contract also contains an automated statistically driven quality control/quality assurance (QC/QA) subsystem. Also under EDCAPS, we are re-engineering the Campus-based accounting system which will promote the continued ability to reconcile Campus-based expenditures.
8. Provide strong fiscal management of the program.	8.1 Positive audit results, i.e., no material weaknesses for the Campus- Based Programs. No material internal control weaknesses will be identified in the Campus-Based Programs' portion of ED's Department-wide financial statement audit. No material weaknesses were identified in the FY 1995 Department-wide financial statement audit.	8.1 Financial program audits, annual, 1998.	• As indicated above, the improved campus-based accounting system will result in improved fiscal management.

State Student Incentive Grant (SSIG) Program -- $0 (FY 99)
Goal: To provide increased access to postsecondary education for low-income students.
Objectives	Indicators	Source and Next Update	Strategies
1. Eligible low- and middle-income students will have the same access to postsecondary education as high-income students.	1.1 Student income distribution. SSIG Program funds will continue to be targeted to those students with the greatest financial need. At least 70% of SSIG Program funds will go to students having income of $20,000 or less. Currently 72% of SSIG Program funds go to students having income of $20,000 or less. 1.2 Availability of program funds. SSIG federal funds will be accurately allocated to states and state matching will be monitored to ensure funds are available to eligible students. Currently, all states participating in SSIG meet or exceed the required state match. 1.3 Leveraging effects. SSIG federal incentive funds will leverage increasing amounts of state grant monies. (Baseline to be developed.)	1.1 Performance report data, annual, 1998. 1.2 Performance report data, annual, 1998. 1.3 Performance report data, annual, 1998.	• Ensure that state student eligibility systems target grants to neediest students. • Closely monitor state matching.

Federal Family Education Loan Program (FFEL) -- $1,764,317,000 (FY 99)
Goal: To successfully deliver and manage the FFEL Program in an efficient and cost-effective manner to help students and their parents meet postsecondary education costs.
Objectives	Indicators	Source and Next Update	Strategies
Borrowers
1. Undertake initiatives to keep default rate at a minimum.	1.1 Program default rate. The FFEL cohort default rate, the percentage of borrowers leaving school who default within two years, will decline to a level of 10% or less by 2002 (rate to be compared to other similar government and consumer ). For FY 1990 - 1995, the rates were 22.4%, 17.8%, 15.0%,, 11.6%, and 10.7%, and 10.4% respectively, dropping by more than 53% over the five year period.	1.1 Office of Postsecondary Education (OPE) data, annual, 1998.	• Make it economically attractive for lenders and guaranty agencies to prevent defaults. (HEA reauthorization proposal). • Hold schools liable for loan costs if a cohort default rate appeal is unsuccessful, thus discouraging frivolous appeals and removing high default rate schools more quickly. • Encouraging the use of flexible repayment options to reduce delinquencies and defaults. • Disseminate information to students on the cost of defaulting.
2. Help students to manage debt burden.	2.1 Debt burden. The percentage of students with student loan debt repayments exceeding 10% of their income will remain stable or decline over time. Among 1992-1993 bachelor's degree recipients making loan payments, 29% had required payments that were more than 10% of their income. (Analysis of 1994 Baccalaureate and Beyond Study) 2.2 Cost of flexible repayment. Impact will be budget neutral.	2.1 Baccalaureate and Beyond Study, 2001. (Efforts are also underway to develop an annual measure of debt burden). 2.2 Office of the Under Secretary's budget service, annual 1998.	• Monitor debt burden and default rates to assess the costs and benefits of flexible repayment options. • Work to lower the in-school interest rate, reduce loan origination fees, and reduce allowable frequency of capitalization of interest by lenders. • Allow borrowers who are consolidating subsidized loans into the FFEL Consolidation Program to keep the interest subsidy benefit. • Provide electronic exit counseling to assure graduating students will understand repayment obligations and be able to manage their debt burden.
3. Maintain a high level of borrower satisfaction.	3.1 Overall satisfaction with the FFEL Program. FFEL borrower satisfaction will continue to improve until at least a 90% level is achieved. One measure of satisfaction with the loan process - "overall level of ease in obtaining a loan" - shows that 84% of FFEL student borrowers found the process to be somewhat or very easy. Satisfaction measures related to borrowers in repayment are currently being collected.	3.1 Program evaluation, Macro, Inc., 1997.	• Reduce loan processing time by use of a multi-year promissory note. • Competition with Direct Loans will lead to service improvements by lenders and guaranty agencies. • Expansion of the "common line" electronic application process will reduce borrower burden and application turnaround time.
Schools, lenders, guaranty agencies
4. Ensure access to loans.	4.1 Continued access to FFEL loans. No eligible student will be denied access to a loan. Based on monitoring of borrower complaints, we are not aware of any major current problems with eligible student access to loans.	4.1 Borrower complaint data (GLOS), ongoing, 1998.	• Strengthen lenders of last resort to assure no significant access problems will develop. (HEA reauthorization proposal). • Consult with the community and take quick action to resolve any access problems that may arise.
5. Maintain a high level of school satisfaction.	5.1 Overall satisfaction with the FFEL Program. Level of satisfaction will meet or exceed the level of school satisfaction measured last year. In award year 1995-96, 79% of FFEL schools reported they were satisfied with the program.	5.1 Program evaluation, Macro, 1997.	• Enhancements to NSLDS and elimination of the Financial Aid Transcripts will improve schools' ability to access borrower records and reduce burden. • Ease institutional burden through the use of a multi-year promissory note and by requiring a single loan proration formula and eliminating proration requirements for programs of study longer than two years. (HEA reauthorization proposal)
Effective program management
6. Provide a program that is cost-effective for the taxpayer.	6.1 Gross default rate. Projects future defaults over the life a loan cohort. The rates, for the FY '92-'96 cohorts are currently estimated at 32.4%, 27.5%, 23.4%, 21.1%, and 20% respectively. 6.2 Loss rate. Projects the overall rate of the Department's liability for a cohort of defaulted loans after taking into account collections on defaulted loans. The rates for the FY '92-'96 cohorts are currently estimated at 8%, 5.2%, 3.5%, 2.6%, and 2.1% respectively. 6.3 Annual delinquency rate. Measures the dollar amount of loans "past due" as a percentage of dollars in repayment. This rate will remain level or decrease each year (to be measured by a floating three year average). Baseline to be determined by June 1998. 6.4 Annual collection rate. Measures annual net default dollars collected divided by dollars in default. This rate will increase each year until reaching 10 percent. This rate, as of 9/30/97, is 8.6%, reflecting total collections of over $2.1 billion compared to total amount owed of nearly $24.5 billion. 6.5 Contractor performance. All major deliverables will be produced on time, within cost or budget, and meet an independent assessment of quality. Prototype contractor report is under development.	6.1 Office of the Under Secretary, Budget Service, annual, 1997. 6.2 Budget Service, annual, 1997. 6.3 OPE data, annual, 1997. 6.4 OPE data, quarterly, 1997. 6.5 Evaluation by contract monitor, monthly (exceptions reporting on deliverables and dollars expended), 1997.	• Closely monitor the gross default and loss rates while striving toward continuous improvement. Any adverse trends will be carefully analyzed for development of appropriate management corrective action. • Implement incentive-based approach to default prevention, as stated under the first "Borrower" objective. To minimize the loss on defaults, see to (1) access data on employment from the states, (2) insure that states offset their employees salaries upon ED's request, (3) access data from state licensing agencies, and, (4) access to information from all federal agencies for purposes of debt collection. • Expand performance-based contracting. • Seek authority to eliminate bankruptcy as an option for discharging student loans in order to save government resources and provide for more equitable treatment of borrowers. • Seek to extend the period for reporting negative credit information from the currently allowable seven years to until the loan is paid in full. • Seek authority to compute lender special allowance on an annual basis instead of the current quarterly basis and for the direct collection of lender fees.
7. Continue to provide strong fiscal management of the program.	7.1 FFEL financial statements. No material internal control weaknesses will be identified for FFEL in ED's department-wide financial statement audit (fault free audit). Three material internal control weaknesses were cited in the FFEL portion of ED's 1995 department-wide financial statement audit. 7.2 Lender and guaranty agency audit results. The percent of lenders and guaranty agencies that are found to be in compliance in all significant program areas will approach 100%. Baseline will be development by May, 1998. 7.3 Strengthening quality of audits. Assessments of guaranty agency and lender audits will show steadily improved quality over time. Baseline will be developed by May, 1998.	7.1 Financial statement audits, annual, 1997. 7.2 Lender and guaranty agency audits, annual, 1997. 7.3 OIG, ongoing, 1997.	• Work with ED's Office of the Inspector General (OIG) to assure that all audits, including third party audits, are conducted in accordance with auditing standards. • Work with OIG and OMB to refine audit guidance so that program specific information can be obtained This will enhance our ability to monitor program funds and assets and will improve ED's financial statement.