OIG to Evaluate ED’s Handling of Improper Payments, Oversight of Aid Regulations in FY 2018
By Joelle Fredman, Communication’s Staff
The Department of Education's (ED) Office of Inspector General (OIG) outlined new goals to improve ED’s process for resolving improper payments and assess the management of certain programs and regulations, such as the Public Service Loan Forgiveness (PSLF) program in its plan for fiscal year (FY) 2018.
The annual plan is part of OIG’s five-year Strategic Plan, which includes proposals to strengthen ED’s implementation of programs and regulations related to financial aid, among other improvements.
In this report, Inspector General Kathleen Tighe determined that improper payments would continue to be a significant management challenge for ED. Tighe has repeatedly found FSA to be noncompliant with the Improper Payments Elimination and Recovery Act (IPERA) and has reported that FSA failed to accurately estimate improper payments. NASFAA President Justin Draeger testified on the mishandling of improper payments before House subcommittees in May, stating that while there has been some progress made to stop improper payments, there is more that needs to be done to ease the burden on students and institutions.
Tighe wrote that OIG would be conducting an annual review of ED’s compliance with improper payment reporting requirements. The audit would include an assessment of the accuracy of ED’s reporting, and the effectiveness of the financial controls ED implemented to avoid improper payments. The office also outlined plans to continue to determine whether the FSA Ombudsman Group is reviewing and resolving borrower complaints in an accurate and timely manner.
In addition, OIG established a set of new goals to assess ED’s oversight of aid-related programs and processes, including plans to focus on ED’s administration of the PSLF program. OIG is specifically seeking to determine whether only eligible borrowers are being approved to benefit from the program. The program, which was implemented to incentivize students to fill jobs in the public sector, has been a controversial topic this year, with some arguing that there may be unintended beneficiaries due to broad terms in the program guidelines. While it faces elimination in the House Republicans’ bill to reauthorize the Higher Education Act, NASFAA has suggested that lawmakers preserve the essential program with new regulations such as borrowing caps.
OIG also wrote of plans to oversee FSA’s management of satisfactory academic progress (SAP) regulations and to determine whether FSA is ensuring that select schools receiving Title IV funds are developing processes to assist students in meeting GPA requirements.
Other new priorities included determining whether FSA is ensuring schools follow the verification process when processing FAFSAs and investigating institutions that have been flagged for abusing federal funds.
In addition to new goals, OIG included a list of its ongoing work to better ED’s management of student aid.
OIG outlined intentions to continue to assess ED’s process for vetting accrediting agencies as well as FSA’s effectiveness for collecting data on students applying for aid. Tighe also wrote about ongoing efforts to ensure that the costs of programs such as income-driven repayment plans and loan forgiveness programs are available to the public and lawmakers.
OIG detailed plans to continue to determine whether FSA has protections in place to mitigate the risks associated with contracted student loan servicers that are not following federal requirements, and to assess whether FSA is making use of heightened cash monitoring as an oversight tool and administering it consistently.
Other goals unrelated to financial aid in the report included improving ED’s implementation of programs related to students’ access to elementary and secondary schools, establishing safeguards to protect programs from fraud, and revamping ED’s business operations.
Publication Date: 12/21/2017
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