Department of Education

This testimony discusses the Education Department's information management systems that support student financial aid programs, including the Federal Family Education Loan Program, the Ford Direct Loan Program, the Federal Pell Grant Program, and campus-based programs. In academic year 1998-99, these programs will make more than $47 billion available in loans, grants, and other aid to about 8.1 million students. GAO is concerned that without effective information management that would result from fully implementing recent legislation (the Clinger-Cohen Act), the multiple, nonintegrated information systems run by the Department may hamper its management of student financial aid programs.

GAO noted that: (1) while the Department has taken actions to comply with HEA requirements for the National Student Loan Data System (NSLDS), it still does not yet have an accurate, efficient, and integrated system for national student financial aid data; (2) over the past 30 years, separate information systems, including the Federal Family Education Loan Program System for the guaranteed loan program, the Pell Grant Recipient and Financial Management System, the Ford Direct Loan Program systems, and NSLDS have been developed to support student financial aid programs; (3) these multiple systems contain incompatible data in nonstandard formats, a situation that has led to inaccurate information, inefficient systems, and high costs; (4) the fiscal year (FY) 1997 budget for contracts to maintain 11 separate, nonintegrated systems was $281.9 million and is expected to climb to $320.5 million in FY 1998, an increase of $38.6 million, or 14 percent; (5) federal student financial aid programs remain vulnerable to losses as a result of fraud, waste, abuse, and mismanagement due to a large extent because the Department, guaranty agencies, schools, and lenders often do not have the accurate, complete, and timely information they need to effectively and efficiently operate and manage the programs; (6) one of the causes of the current information systems' difficulties appears to be the lack of a sound, integrated information technology or systems architecture for managing the Department's portfolio of information systems that support student financial aid programs; (7) the lack of a sound information systems architecture seems to have contributed, in part, to the development of a multitude of nonintegrated systems across the Department; (8) this, in turn, has led to problems in systems interface and data exchange, confusion for users, and delays in program operations; (9) another related cause of the current information problems is a lack of common identifiers for students and institutions, making it difficult to track students and institutions across systems; and (10) full implementation of the Clinger-Cohen Act would provide another opportunity to correct many of the Department's student financial aid system weaknesses; however, because the law is in the early stages of implementation, it is too early to predict how well the Department will implement the law.