Information Technology: Education Must Address Weaknesses in Modernizing Student Aid


What the GAO found

The Office of Federal Student Aid (FSA) for Education launched the Next Gen program in 2017. Next Gen’s goal was to modernize the systems and processes that students, parents, borrowers, and school partners use to apply, administer and/or process federal students. assistance. In August 2022, the FSA had changed 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, the deployment of a data management platform, and the deployment of a loan data system. The remaining four projects had each experienced schedule delays with intermediate milestones. Moreover, FSA does not know when three of the four projects would be fully implemented (see table).

Schedule status for current Federal Student Aid (FSA) Next Generation Projects, as of June 2022

name of the project

Initially planned full implementation date

Full implementation date currently expected from June 2022

Business process operations



Digital Service and Customer Service


Not yet determined

Participation and supervision of partners


Not yet determined

Unified Service and Data Solution (formerly known as Enhanced Processing Solution and Interim Service Solution)


Not yet determined

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

aThis date corresponds to the date when FSA has planned to implement the interim maintenance solution environment.

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

The FSA’s schedule and cost gaps reflect its lack of alignment with GAO best practices. Specifically, the FSA cost estimating guidelines do not fully address these practices. Additionally, 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 corrected, the FSA’s cost and schedule estimates will continue to be unreliable. This, in turn, will compromise senior management’s ability to make informed decisions about the future of the program.

The Next Gen School Partnership Project aims, among other things, to provide schools with a central point of access to the FSA. During the delivery of the project, FSA partially implemented each of the 11 selected best practices on project scope, quality of system development and stakeholder management. For example, although the project relied on performance reports to monitor the quality of system development, project managers did not verify that the contractor’s deliverables met the criteria specified in the contract before they were released. acceptance. Until the project fully implements all of the selected best practices, its efforts risk further delays, cost increases, and system capacities that do not meet the needs of schools.

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 the processing of student financial aid, Education has launched an effort, called the Next Gen program. One of Next Gen’s most critical and costly projects is a system development effort focused on building partnerships with participating schools.

The House Report accompanying the Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Bill, 2021 included a provision for the GAO to review the FSA’s efforts to upgrade to the Next Gen program. This report examines (1) the status of FSA’s Next Gen program; (2) the extent to which FSA cost estimating guidelines and Next Gen program cost and schedule estimates are aligned with GAO best practices; and (3) the extent to which the FSA has implemented IT best practices in scope, quality of system development and stakeholder management for the School Partnership Project.

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

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