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OCR for page 163
9
Further Initiatives for
Improvement in the System
In its review of the issues related to quality in the delivery of student
financial aid, the panel has endorsed a customer-oriented focus that is con-
sistent with a mission of supporting the educational needs of the student
applicant while making the most efficient use possible of taxpayer dollars.
A customer service philosophy must embrace all of the internal customers
of the system: students, postsecondary educational institutions, lenders,
guaranty agencies, various relevant units within the Department of Educa-
tion, and the Congress.
In this concluding chapter of the report, we discuss the directions for
change that we believe are most likely to improve the quality of the student
financial aid award determination system. We also provide a final set of
recommendations designed to achieve that end.
REAUTHORIZATION OF THE HIGHER EDUCATION ACT
The most recent reauthorization of the Higher Education Act occurred
in 1992, as the panel was engaged in its deliberations. One of the main
goals of the reauthorization legislation was to simplify the student aid pro-
grams. The House Committee on Education and Labor defined the issue as
follows:
Many students and their families are denied access to student aid because
they cannot navigate through the bewildering complexity of the current
student aid forms and delivery system. This complexity has become a new
barrier to educational opportunity (U.S. Congress, 19921.
163
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64
QUALITY IN STUDENT FINaNCIAL AID PROGRAMS
As a result of the passage of the bill, some of the concerns already
expressed in this report concerning the complexity of the application and its
effect on student error have been reduced or even eliminated. Following are
some of the simplifying features of the 1992 reauthorization:
· A single needs analysis replaces the two methodologies, Pell and
Congressional, with one formula.) The analysis is used to determine a
family's eligibility for all federal student aid.
· Expansion of the simplified needs test leads to a less complex analy-
sis for families with adjusted gross income under $50,000 who file either a
1040A or 1040EZ income tax form. Prior to the 1992 reauthorization, the
simplified needs test was restricted to students and families with income of
less than $15,000. The simplified calculation, when it applies, excludes all
family assets in determining eligibility.
.
The "effective family contribution" is automatically zero for the lowest
income dependent students and independent students with dependents other
than a spouse. This treatment will be based on an income equal to or less
than the income allowed for receiving the maximum earned-income credit
under IRS rules.
· A single form is used to determine the need and eligibility of a
student for Title IV financial assistance and the need for guaranteed student
loans. The bill also requires that the secretary of education develop a
separate, single loan application document [or all students applying for the
guaranteed student loan program.
.
Eligibility for federal aid is to be determined at no charge. No
student or parent will be charged a fee for the collection, processing, or
delivery of federal financial aid.
· A streamlined reapplication process simplifies subsequent applica-
tions for federal student aid.
· A direct loan demonstration project will help determine whether there
is any advantage to having the U.S. Treasury, through the Department of
Education, fund and administer loans directly to students without use of
private institutions, such as commercial lenders or guaranty agencies.
A new section ("H") was added to the Higher Education Act. This
section is designed to improve accountability and integrity in the student aid
programs without precluding needy students from receiving the education
they deserve and without preventing quality institutions from providing the
educational services that foster productive and contributing citizens. Sec-
tion H. entitled "Program Integrity," focuses on strengthening the process
by which institutions of higher education are allowed to participate in fed
1 Recall the description of the two methodologies in Chapter 3.
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
165
eral student aid programs through state licensure, accreditation, and federal
eligibility, certification, and program review processes. The panel hopes
that enactment of this section will lead to development of performance-
based statutes that avoid affixing common-cause solutions to special-case
events and that aim at achieving measurable and meaningful outcomes rather
than additional layers of bureaucracy. Examples of meaningful outcomes
would include lower default rates, higher graduation and employment rates,
and improved customer satisfaction.
In response to the problem of regulations being changed without pro-
viding sufficient notice for the institutions to adapt to those changes, the
reauthorization calls for a master calendar. With this requirement, any Title
IV regulatory changes not published in final form by December 1, prior to
the start of the next award year, will not become effective until the begin-
ning of the second award year after that December 1 date. This provision,
along with negotiated rule making (which requires public involvement in
the development of proposed regulations), should reduce the burden on
institutions and result in the reduction of error, if the mandate is not vio-
lated.
TOWARD A NEW APPLICANT PROCESSING SYSTEM
Important measures of increased quality in the student financial aid
system include the reduction of the time required to complete the applica-
tion process and the reduction of unnecessary work or burden (such as that
measured in person-hours). In the applicant verification and loan certifica-
tion process, considerable work and redundancy add time from the point
that the student initially applies to the point of certification or noncertification
of eligibility, but they add little or no value to the product. Consider, for
example, a student applying to five universities. The student may iterate
several times in submitting and resubmitting the student aid application to
one of the multiple data entry (MDE) contractors. After this first step, the
student then sends the resulting Student Aid Report (SAR) to each of the
five institutions. For all centrally selected SARs, each institution is re-
quired to verify the data up to a maximum of 30 percent of applicants,
although they often verify more. Thus, this student's application could be
chosen for verification by all five of the schools. Imagine five student
financial aid officers all sitting next to each other verifying the same file.
Although in reality the five financial aid officers are at different schools,
the result is the same as five inspectors doing the same work. This is
redundant and wasteful of time that could be better spent in counseling
students or in other value-enhancing work.
Prior verification results are not used to form a risk-based strategy for
selection of reapplicants for verification. Thus, the verification process
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66
QUALITY IN STUDENT FINANCIAL AID PROGRAMS
may be repeated at the school where the student is attending (or at other
schools if the student wishes to transfer) for another three or four years.
This is because the student has to reapply for financial aid each year, iterat-
ing again with the MDE contractor and institution. The process adds uncer-
tainty and time delays to the student's decision making, as well as burden
for the institution.
A "New" Approach
While some further improvements are possible, the current institutional
verification process is fundamentally redundant and inefficient, as described
above. In addition, errors in the system are seldom corrected until long
after they occur. To improve the system, a greater emphasis on cooperation
and coordination between customer and provider is crucial. In addition,
there must be a move to Reemphasize ineffective, time-consuming, and ex-
pensive efforts to eliminate 100 percent of error through inspection and
reinspection. A process that treats program participants as miscreants rather
than customers must be changed.
The panel suggests that the Department of Education weigh more heavily
the comments made in many of the commissioned studies that have ad-
dressed verification. Those studies have indicated that (1) large errors re-
main even after verification, (2) the cause of much of "student error" lies in
the complicated application process, and (3) data items that must be fore-
cast (e.g., estimated income, household size, and number in college) are
main contributors to student error. The studies have produced little evi-
dence that institutions can develop procedures that will further reduce stu-
dent error very much. Thus, the panel believes that further improvement
possibilities, that is, true corrective actions, lie mainly in the hands of the
Department of Education and Congress, since only they can make the nec-
essary systemic and legislative changes.
Ideally, the process could be greatly simplified if the MDE contractors
or the central processor (also a contractor) took over most if not all of the
verification/certification steps. Only one resource would be used rather
than up to six as in the previous example (i.e., the data entry contractor plus
five institutions). Under the revised process, the data entry contractor would
send the SAR to the student and the institutions after the student and the
contractor had performed the correction and verification steps. Thus, the
extra steps involved in having the student send the SAR to the schools after
the contractor has sent it to the student would be eliminated. (We note that
the contractor currently sends the SAR data to the schools indicated on the
application, but a signed SAR sent by the student is required to meet De-
partment of Education recordkeeping requirements.)
To summarize, while institutional verification removes some, but not
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
167
all, of the error made by the student when initially applying, the process has
several critical flaws. Most important, the system does not have a manage-
ment strategy and associated data feedback aimed at developing corrective
actions. Corrective actions taken to increase the reliability of the initial
data would remove problems, such as reliance on expensive and duplicative
inspection efforts and time delays in making the award. In assessing pos-
sible solutions to these problems, the panel found that the Department of
Education can best work on reducing the causes of error by developing
centralized and up-front verification of applicant-reported data. Indications
of how the department might proceed in these areas are presented next.
Reducing "Student Error"
The Department of Education must move from a system that focuses on
detecting errors after awards have been made to a system that prevents error
to the extent possible. While some error could be removed by making the
application materials more user friendly, as suggested in Chapter 5, and by
the increasing use of electronic application systems, additional action is
needed. A combination of changes to some data requirements and changes
to the activities associated with the SAR and verification can result in large
reductions in errors, for example, of the types reported in Tables 5-3 and 5-4.
We begin with some ideas on reducing error by changing data requirements.
Prospective data have been identified as a source of student error in
past studies. The Department of Education and Congress, recognizing such
problems, have made changes in recent years to reduce such errors. For
example, income is now reported for the tax year preceding the school year
and applications must not be sent before January 1 following the tax year.
In the past, applicants had to estimate income for the current year, an obvi-
ously error-prone activity. Yet, several states still have aid programs that
require applicants to apply for federal aid early in January. For many of the
applicants, taxes are not completed and even Wage and Tax Statements (W-
2s) may not be available. Thus, such applications are some of the most
error prone and have an impact on the strategy for selecting records to be
verified. The Department of Education should work with states to set a due
date that would eliminate such problems or allow data from a year earlier if
tax forms are not yet completed. In the latter case, applications in subse-
quent years should be required to use the tax form for the year after the one
used the previous year.
The Department of Education might also explore the placement of elec-
tronic application systems at service sites for other need-based programs.
Thus, low-income applicants, potentially having no tax form, who are sub-
ject to the verification processes of the other programs could have their
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68
QUALITY IN STUDENT FINANCIAL AID PROGRAMS
student aid eligibility efficiently determined by their eligibility for those
other programs.
Another prospective data item is the number of other family members
in college. The department should consider asking for the Social Security
Number of all family dependents expected to attend postsecondary schools.
If any of the listed dependents is not found in the application system, the
applicant could be asked to report the school that person attends. The
school could then be asked to report to the department the attendance status
of these nonapplicant students along with the status of students who are
applicants for aid at that school. The central processing system could link
all applicants affected by a change in this data item, recompute their eligi-
bility "indices," and notify the school in a timely manner.
The department might also consider a separate form for applicants from
families with multiple dependents in college. Parents would then supply
their financial information only once on a form separate from that of the
student's finances. This would currently affect as many as 35 percent of the
dependent students and 10 percent of independent students. It would reduce
unnecessary burden on parents and reduce transcription errors.
Household size is also a major contributor to the error estimated in past
studies. This data item entails prospective error, as in asking for the num-
ber of persons who will be supported from July 1 to the following June 30.
Problems may also be caused by the complex definition of the item. The
prospective error can be eliminated by using a past date, such as the January
1 start of the application process. Reducing definitional problems might
require using tax code definitions of dependents or a listing sheet to identify
the individuals claimed and their relationship to the household.
Home value is no longer a consideration because the 1992 reauthoriza-
tion removed this data item from need calculations. To some extent, other
real estate and investment value have diminished as causes of error in the
federal application process because they are not reported unless income
exceeds $50,000. The panel is concerned that some state and institutional
aid programs will continue to require these data items, which will compli-
cate the application process as it appears to the student who must explore
all sources of aid. Even though the federal application form will collect
some state-required data items (eight items, at the time this report was
written), the Department of Education, Congress, and the other sources of
aid should continually work together to improve the system. The long-term
goal should be to create a true one-form system that simplifies the process
for the applicant but also results in a fair distribution of aid dollars from all
sources.
Rather than removing from the application form items that are error
prone or perceived as unfairly restricting aid awards, the department should
consider ways to allow more tolerance in reporting those items. For ex
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
169
ample, raising the threshold amount before an asset affects the calculation
of need would reduce errors because it is effectively the same as removing
the item for applicants with small asset values. Applicants with very large
assets would still be identified, which would provide the potential for a
more fair determination of eligibility for aid. Yet, using thresholds presents
problems regardless of the cutoff level because a few dollars in error at the
threshold results in a large error in determining eligibility. Consideration
could be given to creating relational decisions that might fairly assess the
ability to use assets. For example, the aid formula could cap home value at
some multiple of the applicant's income that is related to mortgage avail-
ability. Such a computation should be less affected by error in the reported
asset value and should more reasonably assess the amount of the asset
available to the applicant. Data from the Survey of Consumer Finances
(Kennickell and Shack-Marquez, 1992) could be useful in defining the applicant's
ability to pay and in setting thresholds for use of assets in needs analysis.
Errors in reporting other nontaxable income have been reduced in im-
portance due mainly to the removal of the married-couple deduction from
the tax form. This item was the largest of the nontaxable income error
items (Price Waterhouse, 1991~. Errors in some of the other nontaxable
income items could be identified if Internal Revenue Service (IRS) forms
were available, as could some errors in the existence of assets, the last of
the items in the listing of major student errors.
A break-out of tax form items could be collected from all applicants, or
applicants could be required to submit the 1040 page of the federal tax
form. Useful tax information could then be entered with the application
data. While this would add to data entry costs, the information would
certainly help to improve the current verification selection methods and
would result in more efficient use of time at the institutions. Yet there may
be a more efficient approach. The panel believes that the Department of
Education should develop a front-end match of applicant data with IRS data
tapes. Such matches are being performed at several federal agencies and
are reportedly very successful. (The panel recognizes that the department
will likely need the help of Congress for such matches to be possible.
Legislation directing the IRS to allow these matches may be needed. Re-
quiring a match of the data elements used to determine student aid eligibil-
ity with tax requirements would help. Otherwise, nonmatches would re-
quire personal attention in verification to ensure a fair determination of
eligibility.'
The timing of applying for aid and filing tax forms also needs attention.
Early aid applicants often will not have filed the federal forms for the tax
year. Even when tax forms have been filed, there is some delay before tax
information can be retrieved. A match with the previous year's tax data
could be done for those applicants. Questionable applications could be
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170
QUALITY IN STUDENT FINANCIAL AID PROGRAMS
identified for verification or a later match with the current tax data. Alter-
natively, the applicant might be allowed to use the prior year's tax data for
aid determination. Although the effects of such a change on the award
distribution among students should not be great, this option should be stud-
ied further before being acted on.
Thus, the panel believes that the "problem of student error" falls into
the hands of the Department of Education and Congress. The department
must take actions that affect the system in order to reduce student error
appreciably, not impose unnecessary requirements on the institution in the
verification and compliance-review procedures.
Recommendation 9-1: The Department of Education and the Congress
should work together to effectuate changes in data requirements that
should simplify award determination and increase accuracy. Develop-
ment of a system that requires applicant data to be matched with IRS
data should receive top priority.
Reducing "Institutional Error"
Each error item associated with students in Department of Education
contract studies generally had the same level of award error in all the aid
programs (Pell, Campus-Based, and Stafford Loans). In contrast, the most
important institutional error items varied in level of award error across
programs (see Table 5-41. As with student error, many of the causes of
institutional error can be removed through systemic changes initiated by the
Department of Education. Errors that are caused by a piece of paper being
missing from a student's file, such as the statement of educational purpose,
are prime targets for action. Institutions must utilize resources to keep such
forms although they have no relationship to the institution's mission. If the
signed statements for educational purpose, Selective Service compliance,
reporting of any drug offenses, and so on, were required with the applica-
tion, considerable burden would be removed from the institution and from
audit and review activities. Thus, the auditors and reviewers would be
freed of trivial activities and would have more time to focus on the more
important quality issues of effectiveness of educational programs, institu-
tional integrity, and the value of the service purchased by the student and
taxpayer. (See Schenet, 1990, for further description of these issues.)
Data base matching is currently mandated by Congress in Title IV leg-
islation to identify applicants who have failed to register for Selective Ser-
vice. Federal concerns internal to the Department of Education, such as
prior aid received as measured by the financial aid transcript, should be
identified from the department's own records, much like the matches with
loan default records. Here too, Congress has instructed the department,
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
171
through Title IV legislation, to improve its internal data bases that contain
information on defaulted loans. (A contract for the National Student Loan
Data Base was awarded early in 1993.) The applications identified in these
automated processes as "problem cases" should be referred to the institu-
tions for follow-up. This process should be satisfactory to the schools since
the Price Waterhouse (1991) study indicated that institutions agree that some
type of verification is needed but that the current system requires substan-
tial institutional resources and is not well targeted.
The remaining major sources of institutional error (computing the cost
of attending the institution, monitoring enrollment, determining special-situation
exceptions, determining whether the student has a bachelor's degree, and
packaging of aid) are associated with information and actions most easily
handled at the school. With the reduction of other unnecessary activities,
the Department of Education and the schools could concentrate on develop-
ing effective methods to reduce errors in these activities. Both systemic
and special-cause actions are needed. As an example of a systemic action,
Price Waterhouse (1990b) recommended that schools be required to report
each item in the cost-of-attendance computation separately so individual
item limits that are exceeded could be determined early. Although the panel
did not explore this possibility, the Institutional Quality Control Pilot Pro-
gram could be used to explore such activities.
Reduction of special causes of error requires knowledge of where the
errors are located. An unusual clustering of errors is likely to indicate the
existence of a special cause. For example, Advanced Technology and Westat
(1987b) discovered that clock-hour schools were four times more likely
than credit-hour schools to have underawards due to incorrect determination
of enrollment status. They speculated that the regulations were developed
with credit-hour schools in mind and thus were confusing when applied at a
clock-hour school.
Centralized Verification
With the removal of many of the underlying causes of student error and
the availability of "external" sources of data, the verification strategy changes.
Information is at hand on most of the remaining error-prone data elements.
Besides the obvious items, such as income and number of dependents, inter-
est or dividends reported and tax schedules that indicate business or rental
assets should be good indicators of problems with reported asset informa-
tion. The automated checks on such items as Selective Service registration
and student loan default could determine the records that will need further
verifying documentation. Rather than flagging the record for institutional
action during verification, the SAR could request corrections that are cur-
rently made much later in the process. The changes could be processed
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72
QUALITY IN STUDENT FINANCIAL AID PROGRAMS
centrally, which would result in an initial award determination that would
be considerably more accurate than the one produced by current procedures.
It is likely, as mentioned previously, that some applications will require
assignment to institutions for further examination to resolve special situa-
tions that might otherwise delay the determination of award. An example of
such an application is one involving separated parents who filed a joint tax
form. In this case, the aid application is required only to report the income
of the parent with which the applicant lived most of the prior 12 months.
While up-front data processing costs might increase under this pro-
posal, the Department of Education should consider total cost and service
improvement in making decisions on implementation. Repeated processing
of SARs would likely decrease. Financial aid administrators, freed of bur-
den, would be able to concentrate on the special cases that always exist.
Awards might be determined sooner, a service improvement for applicants.
Consistency of verification and documentation would be better controlled.
Finally, award error would be controlled on all applications, not just those
selected for verification, as is now the case.
Recommendation 9-2: The Department of Education should begin the
development of a front-end and centralized verification system in which
the schools' verification burden is drastically reduced. Under a new
system, the department would identify exceptional cases, far fewer than
the current 30 percent, for institutional review activities.
STUDENT LOANS
The 1992 reauthorization emphasizes the use of loans even more than
in the past. By expanding loan limits in all programs and by eliminating
loan limits completely in the Parent Loans for Undergraduate Students Pro-
gram, the average future aid package will likely contain a higher percentage
of loans than in the past, which increases the possibility for errors of the
kind encountered under the terms of the old programs. Therefore, the need
to redesign the Department of Education's management of these programs
so that they focus on students, parents, and recipient institutions is greater
than ever before.
In general, the panel believes that the same remedies recommended in
this report for other parts of the Title IV student financial assistance pro-
grams also hold for the loan programs. The difference is that the structure
of the loan programs is more complicated because of the public-private
partnerships that have been developed over the years since the first Higher
Education Act (1965~. The involvement of the private enterprise banking
community, state guaranty agencies, and secondary markets, in addition to
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
173
the school financial aid offices and the MDE contractors, makes the loan
programs even more complex to manage than other parts of the system.
The Department of Education requested that the panel focus on delivery
systems leading to awards rather than payment processes; thus, we have
said little in this report about quality assurance in lending and guaranty
agencies. In some respects, the department's procedures for dealing with
these entities are even more highly skewed toward inspection than those
problematic systems dictated by federal rules for institutions of higher edu-
cation. Considering the level of federal expenditure to leverage capital into
the student aid loan programs that rely on private enterprise and nonprofit
organizations, the panel believes the following comments on the need for
greater use of quality systems in this part of the program are in order.
One possibility for addressing issues of quality in the current loan pro-
grams is a model similar to that in the Institutional Quality Control Pilot
Project: high standards for participation, clear rules for ongoing federal
oversight, and deregulation incentives for participants. This process could
lead to insightful review, "best case" examples that might be instituted by
other agencies, and new avenues for working relationships in the develop-
ment of federal rules.
While the existence of additional partners from the private and non-
profit sector is often cited as adding to the complexity of the federal student
loan programs and instances of poor loan servicing do exist, the strongest of
the private and nonprofit entities have developed greater managerial and
data processing capabilities with respect to loans than are currently pos-
sessed by the Department of Education. Thus, the importance of instituting
quality management programs within the department to enable it to engage
the assistance and cooperation of that expertise is vital.
This is especially
true given the direct loan demonstration project mandated by Congress, in
which the Department of Education is charged with administering loans in
their entirety.
The direct loan program is one current effort aimed at resolving prob-
lems in the loan process. Direct loan programs are an experiment in an
attempt to increase student benefits and simplify the aid application pro-
cess. Overall simplification of processing and registration while improving
the quality of the outcome is certainly in order. The success in these areas
has yet to be measured.
TOP MANAGEMENT LEADERSHIP
Despite the genuine movement toward quality improvement that the
1992 reauthorization will bring about, the panel believes that there is much
more in that direction to be accomplished. For example, a major detriment
to sustaining the desired focus on quality is a lack of stability in leadership
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QUALITY IN STUDENT FINANCIAL AID PROGRAMS
positions that influence student financial aid programs. Changing leader-
ship may cause inconsistency in long-term vision. In recent years, the
positions of assistant secretary for postsecondary education and deputy as-
sistant secretary for student financial assistance, for example, were often
filled by someone in an acting capacity or by a regular appointee of short
tenure. During this time there was also a major reorganization of the Office
of Postsecondary Education and a number of shifts in line management
assignments. While, in themselves, these changes might not be bad, and
some might be necessary, the panel sensed that the long-term vision for
quality in financial aid programs often took a back seat to problems result-
ing from frequent turnover. That type of situation is not unique to student
financial aid programs. It occurs in many government agencies. The assis-
tant comptroller general for human resources programs of the General Ac-
counting Office, in testimony before the Committee on Ways and Means,
House of Representatives (Thompson, 1991a), urged Congress to help agen-
cies overcome such problems in striving to improve service to the American
people. The panel agrees with Thompson's recommendations that Congress
· encourage the development of management systems to help cushion
the effects of leadership transitions.
use oversight to promote constancy of purpose in agencies, with
emphasis on long-term vision.
· encourage a customer-service focus.
· work with agencies to develop meaningful performance measures.
.
The panel found that while the Department of Education requires schools
to invest heavily in inspecting the quality of their activities, the resources
the department allocates for improving quality are very limited. Obtaining
an accurate accounting of expenditures for these activities was not possible,
but departmental personnel made it clear that such activities amount to
much less than 1 percent of the operating budget of the Office of Postsecondary
Education. Budgets for quality improvement activities in organizations known
for quality leadership are often in the range of 2 to 5 percent of operating
budgets. While 2 percent may be too much to allocate with new funds, a
substantial increase is needed at least for a period of development. A
successful effort should be expected to find enough cost-reducing efficien
. . . . . .
cues to tuna continuing activities thereafter.
The panel has also pointed out inadequacies in the information technol-
ogy available to the Department of Education in almost all the areas studied
in this review. In addition, the department's own internal assessment (Winkler,
1991) indicates such problems and recommends that staff at all levels of the
Office of Student Financial Aid be reinforced, particularly the numbers and
kinds of staff necessary to handle the increased load to be placed on the
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FURTHER INITIATIVES FOR IMPROVEMENT IN THE SYSTEM
175
office by new emphasis on analytic, quantitative, and managerial skills.
This staff must meet the new demands to be placed on the organization for
increased intensity in monitoring, data gathering and analysis, and financial
management.
Recommendation 9-3: To signal top management's commitment to a
Total Quality approach at the Department of Education, the department
should initiate a Total Quality training program that starts with the
leadership group and rapidly includes everyone in the department. In
this way the fundamentals, vocabulary, and principles of Total Quality
will be integrated into the department. Corporations have found this to
be a critical first step in implementing quality improvement. Such a
training effort should include leadership's role in the commitment to
change, process-improvement and problem-solving methods, Total Quality
tools, focus on customer satisfaction and its measurement, teamwork,
and quality planningldeployment.
Recommendation 9-4: In its review of survey activities, verification
procedures, and management information systems, the panel was disap-
pointed to find a paucity of statistically trained personnel available to
the studentfinancial aid programs to analyze data and to interact with
contractors. The Department of Education should develop a much greater
in-house statistical capability to manage contracts that demand high
levels of statistical expertise, and the data developed by contractors
should be thoroughly documented and made available for in-house analysis.
The department should also strengthen the analytic capabilities of its
entire work force, including those who will not be expected to attain the
level of statistical "expert" but yet should be skilled in handling and
interpreting data. Specifically, the department should perform a needs
analysis of statistical and computer literacy. Then it should develop
training programs to improve abilities and purchase the hardware re-
quired to carry out the necessary analytic tasks.
The panel recognizes that technical improvement cannot begin without
some initial funding targeted toward efforts such as pilot projects, data base
improvement, and hiring staff with appropriate skills to help in these ef-
forts. Thus, the panel requests that Congress take action to help make this
possible.
Recommendation 9-5: Congress should ensure that there is adequate
funding and staffing to develop the quantitative information needed to
manage and review the student financial aid programs effectively.
The panel found an absence of performance measures linked to long-
term planning. Setting long-term plans that transcend leadership changes is
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QUALITY IN STUDENT FINANCIAL AID PROGRAMS
important. To make sound decisions on necessary changes to the programs,
a new top management team must gain experience and familiarity with the
system and its processes. A thorough understanding of a system as complex
as the student financial aid programs takes time.
Recommendation 9-6: To ensure the development of and commitment to
long-term planning, the politically appointed position in charge of the
student financial aid programs (the assistant secretary for postsecondary
education) should have a fixed (commonly five-year) term.
Representative terms from entire chapter:
aid programs
