NASFAA President To Congress: Schools Report Widespread Operational Shortfalls with Federal Student Aid

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Justin Draeger, Head of Financial Aid Administrators’ Association, Testifies At Joint Hearing on Improving the Partnership Between Federal Student Aid (FSA) and Colleges

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By increasing partnerships with schools, increased accountability to the public and stakeholders, and instituting some cultural and structural changes that must be made in law, we believe that each of these issues can be appropriately addressed.

November 18, 2015 – Today at 9:00 am ET Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), will testify before a joint hearing of the House Oversight and Government Reform Committee’s Subcommittee on Government Operations and the House Committee on Education and the Workforce on the topic, “Federal Student Aid: Performance-Based Organization Review.”

Draeger will answer questions and share testimony about the experiences and challenges financial aid administrators at colleges and universities have faced interacting with the Department of Education’s Office of Federal Student Aid (FSA). As an organization comprised of financial aid administrators at more than 3,000 public and private higher education institutions across the nation, NASFAA is well positioned to offer feedback on the effectiveness and appropriateness of FSA as a performance-based organization (PBO) because NASFAA members effectively serve as the link between FSA and today’s postsecondary students.

Despite FSA’s important work over the years, “one need not look too deeply to see that FSA is not acting in accordance with its required purposes in its role as a PBO, and in some cases, acts in ways that directly conflict with its stated purposes,” states Draeger in his prepared testimony.

Feedback solicited from NASFAA members revealed institutions observed a lack of accountability on FSA’s part and found the office’s approach to institutional management and administration of the financial aid programs overbearing and antiquated. Due to the strained relationship with FSA, many schools struggle to interpret rules and regulations on their own rather than reaching out for assistance. Ultimately this may result in students not receiving the aid to which they are entitled.

In order to minimize these negative effects, NASFAA offered the following recommendations to help strengthen the relationship between FSA and schools:
1. FSA needs additional oversight and accountability.
2. Congress should hold FSA more accountable to ensure FSA meets statutorily required deadlines.
3. FSA should consult schools and partners before making changes and updates to its strategic plan.
4. FSA should establish basic customer service targets that measure progress on overall operational strategies, such as measuring the time it takes to approve program additions or changes, respond to processing questions, and submit final compliance review reports.
5. Congress should consider whether FSA should have as many responsibilities as it currently does in order to avoid fatigue and conflicts of interest.
6. FSA should consider partnering with and/or studying other PBOs to evaluate themselves against similarly-organized entities and also to share best practices.

“We do not believe that any of these challenges are insurmountable,” Draeger said in his written testimony. “By increasing partnerships with schools, increased accountability to the public and stakeholders, and instituting some cultural and structural changes that must be made in law, we believe that each of these issues can be appropriately addressed.”

Other hearing witnesses include:

  • Mr. James Runcie, chief operating officer, U.S. Department of Education    
  • Ms. Melissa Emrey-Arras, director of Education, Workforce, and Income Security, U.S. Government Accountability Office    
  • The Honorable Kathleen Tighe, inspector general, U.S. Department of Education    
  • Mr. Ben Miller, senior director of postsecondary education, Center for American Progress

A live webcast of the hearing will be available beginning at 9:00 am ET and Draeger's written testimony can be found on NASFAA's site. For additional questions about NASFAA’s testimony, or to schedule an interview, please email news@nasfaa.org or call 202-785-6959.

About NASFAA

The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit http://www.nasfaa.org.

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Erin Timmons
NASFAA
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