Kicking off the first day of the Office of Federal Student Aid (FSA) Training Conference in Reno, Nevada, Education Secretary Betsy DeVos told a room full of financial aid professionals that FSA would function better as a stand-alone agency, arguing that its “mission is to serve students and their families, but its structure is set up to serve politicians and their policies.” Following her opening remarks, FSA Chief Operating Officer Mark Brown unveiled a handful of forthcoming online tools for student borrowers and financial aid administrators.
“One has to wonder, why isn’t FSA a stand-alone government corporation, run by a professional, expert, and apolitical Board of Governors?” DeVos asked the crowd Tuesday. “A separate FSA would be better positioned to deliver world-class service to students and their families as they finance higher education. It would manage the student loan portfolio and work to secure its financial strength and sustainability. And it would do all the things it’s been charged to do — only far better.”
During her speech, DeVos cited a NASFAA white paper that proposed structural changes to help FSA fulfill its mission as a performance-based organization (PBO), such as creating an oversight board that reports directly to the public, the secretary of education, and Congress. NASFAA did not recommend a stand-alone agency.
4/ Much more is needed in terms of oversight, goals, and transparency for us to get to the Congressional vision outlined in 1998 and I applaud @usedgov for making this a priority & we look forward to hearing more details. (note: @nasfaa did not recommend a stand-alone agency)— Justin Draeger (@justindraeger) December 3, 2019
DeVos said that the concept of a stand-alone FSA “warrants far more discussion,” adding that “we should be talking about the benefits of professional, experienced leadership who, as in the private sector, would be responsible for setting strategy for FSA, for overseeing the management of the loan portfolio, for ensuring institutions hold up their end of the bargain, and for reporting to Congress.”
DeVos also told conference attendees that ED is continuing to improve FSA “with the limited tools Congress gave us.”
During the 2018 FSA conference, DeVos announced the office would focus on financial literacy through its overhaul of the federal student loan system — the NextGen Financial Services Environment — and modernize the financial aid application process through efforts such as the myStudentAid mobile app.
On Tuesday, DeVos told conference attendees that “this year, ‘NextGen’ is ‘NowGen,’” as she unveiled a new chatbot — “Aidan” — that’s intended to answer students questions about the federal student aid system, especially as ED continues to update the app with “more real-time and transparent information.”
“At last year’s conference, I urged everyone to rethink student lending. ... The financial aid process must be modern, streamlined, and simply easier for students — and for you,” DeVos said. “... So, we are modernizing FSA’s infrastructure and totally revamping the way we connect with students.”
Following DeVos’ remarks, Brown previewed two new online tools he said will be launching in a few months: the “Informed Borrower Tool” and “Loan Simulator.” The first tool, Brown explained, will be initially hosted on the MyStudentAid website and integrate information from the recently updated College Scorecard to help borrowers “know what they are getting into before they take out student loans.” The tool will allow students to see how much they have borrowed, preview what their monthly payments might be, and explain concepts such as capitalization and the difference between federal and private loans. Brown said that, beginning with loans disbursed for the 2020-21 award year, both students and parents will have to certify that they have used the tool before receiving their funds. During a federal update following the opening remarks, ED representatives said they plan to roll out the tool in April 2020.
Brown said the Loan Simulator will function as an online wizard that will suggest loan options for students based on their “goals and personal information,” and allow them to “test drive and compare personalized scenarios” with regard to repayment. It will also guide students to enroll in the repayment plan they choose, he said.
Brown also previewed a new online resource for financial aid administrators, the “NextGen PPO,” which he said will be rolled out at next year’s conference and was developed with input from six instituions.
Brown explained that the resource, which will require a one-time sign-in, will feature “real-time FSA interaction,” and allow financial aid administrators to electronically sign and upload documents. The interface that Brown previewed to conference attendees included a dashboard with data such as open financial aid cases, the amount of loans disbursed at the institution, the number of students receiving aid at the institution, and the Direct Loans and Pell Grants disbursed and drawn down.
“[The NextGen PPO] is more than just a website, it’s a single gateway for everything you do with federal student aid,” he said.
Brown also discussed upcoming plans to redesign both the FSA Handbook and the Information for Financial Aid Professionals (IFAP) website, and intentions to create a new training model to allow financial aid administrators more flexibility to take FSA classes — and to develop classes that will be better tailored to their needs.
“I want your administrative headaches to go away so you can focus on what really matters — helping students,” he said, referring to FSA and financial aid administrators as partners.
During the federal update, ED representatives said they will next month be releasing a new process for reporting foreign gifts that they believe will result in a larger number of schools reporting more gifts, which will require “more time at your schools” and collaboration between institutional departments. They also said that this summer they planned to implement the second phase of a help tool for the Public Service Loan Forgiveness (PSLF) program they revealed at last year’s conference, which will include a database of qualifying employers and the ability to sign and submit PSLF forms online, among other things.
Stay tuned to Today’s News for continued coverage of the FSA conference this week.
Publication Date: 12/4/2019