Modernizing Financial Aid Delivery

A Status ReportJim Farmer

instructional media + magic, inc.

As presented at the

2001 Vermont Financial Aid Conference

Thursday, June 21st 2001

Killington, Vermont

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Financial aid services

• In the past, regulations drove practices, limited services

• Now, information technology drives practices; its implementation limits available services

________________

Using information technology, the U.S. Department of Education is improving its services, setting higher expectations

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Key initiatives

• Department of Education OSFA• Web enabled applications• Common Origination and Disbursements

• Student Loan Industry• Meteor Project• ELM Resources

• College and University Collaboratives• JA-SIG (Java in Administration Special

Interest Group)• Internet 2/Mace and Shibboleth

• Florida State University “30 minute application to funds”

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

U.S. Department of Education

• OSFA Performance

• OSFA Plans

• An analysis

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

SFA performance objectives

“Raise Our Customer Satisfaction Index From a Level Typical of Government to the Range Enjoyed by America’s Best Financial Service Companies.”

“Reduce Our Unit Cost — the Amount We Spend Administering Per Recipient — by One-fifth”

“[Raise] Our Employee Satisfaction Rating…From Mediocre to the Level of NASA Workers Who Reach for the Stars.”

Greg Woods, Interim Performance ObjectivesNov 15, 1999

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Web-enabled applications

FAFSA on the Web Schools Portal; Release 2.0 with

Single Sign-On Financial Partners Portals – FY 2002 Student On-line Access to Direct

Loan Servicing API to SFA Systems

Specifications due 09/30/01

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Web ApplicationFAFSA on the Web - 1999/2000Web ApplicationFAFSA on the Web - 2001

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

FAFSA On The Web

FAFSA e-Filers

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

97-98 98-99 99-00 00-01

Mill

ions

of

stu

dents

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Benefits of Web applications

SFA

$23 million

Operating Costs Investment

Electronic FAFSA

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Customer satisfaction

1999 2000

Federal Government 68.6 68.6 0

Student Financial Assistance 63 70 +7

Patent & Trademark Office 57 59 +2

Internal Revenue Service 74 75 +1

(e-filers only)

Federal Emergency

Management Agency 73 73 0

U.S. Mint 86 84 -2

American Customer Satisfaction IndexUniversity of Michigan Business School

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Reducing unit costs

Annual Cost per Recipient

18.72 19.0818.06

22.30

$0

$5

$10

$15

$20

$25

1999 2000 2004SFA Goal

2004Projected

PlannedReduction

Each dollar reduction represents $14 million annual savings

SFA FY2001 Performance Plan

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

CIO Score Card “Year One”

Rational Rose Tools

IBM MQ series - EAI/ Middleware

LDAP Compliance / BI Tools

RSA COTS tools

XML Compliance & Applications

Informatica - ETL tools

Digital Signatures

Published APIs

N-Tier Web Application

Coupled VDC Migration

Designed Data Warehouse

SLA’s in Place

Migrating to Seat Management

OPS Readiness Review

Designed Portal Apps

Internet/VPN

New Management Team

Training

IT Policy GuideManagement

Operations

Technologies

B+

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Electronic identification

Single Sign On for Students and Financial Aid Professionals

Remote Authentication of Students SFA Pin Via Proprietary Protocol

(transitional)

ACES Digital Certificates Via GSA

2002-2004 Plans Shared Authentication Using SFA PINs, ACES

Certificates, School PINs, Bank PINs and Certificates

Town Hall Meeting on Electronic IdentificationDecember 14, 2000

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Key OSFA “PBO” victory initiatives

• Turbo FAFSA 

• Common Origination & Disbursement    

• NSLDS Mad Dog Changes  

• Schools Portal with Single Logon  

• E-Sign & P-Note 

• Consistent Answers for Customers (Contact Centers, CRM, Customer Data)   

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Schools Portal Prototype

Friday, October 20

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Observations

Customers Using Electronic Services Are More Satisfied Than Those That Don’t.

Agencies That Measure Customer Satisfaction Have Better Customer Satisfaction That

the Federal Government As a Whole In General, Are Improving Customer

Satisfaction

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Expect...

• SFA Common Origination and Disbursements

• 2002-2003 Batch Processing Pilot - Difficult, limited volunteers, minimal vendor support, “successful”

• 2003-2005 Migration to COD

• 2005-2006 On-line, real-time“and earlier if requested” - Kay Jacks, COD

Software Developers Meeting

• Electronic Signatures

• Limited use of SFA PIN

• Replaced by Internet 2/SAML December 2002

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Expect...

• Alternative loans will be the largest source of financial aid by 2005

• The focal point of financial aid information and transactions will be the college or university

• “Web services” to be the basis for the new information technology infrastructure

• New college and university administrative systems based on Web services, component architecture will become available 2003, widely implemented in 2004 and 2005

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Impact on colleges and universities

Change From Batch to Real-time Transactions, From Proprietary File Transfers to Internet XML

Messaging Standards From SFA-defined to Industry Message Content

Standards

Integrate Student Experience With SFA Student-oriented Systems

Use SFA-provided Java J2EE shared-components

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

NCHELP-sponsored “convergence”

• Business messages

OSFA Common Record, IFX Forum, CommonLine, PESC, industry XML

• Data transport

OSFA, CommonLine, PESC, industry SOAP and ebXML

• Authentication (in progress)

OSFA Internet 2/Shibboleth, JA-SIG, industry SAML

• Directory Services (soon)

• OSFA, Meteor, industry UDDI

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

The Meteor Project

• An initiative of the student loan industry

• Collaborative effort of 31 guaranty agencies, lenders, secondary markets, and servicers

• On-line, real-time information services

• Separate channels for students and financial aid professionals

• Aligned with industry, SFA standards

______________________

“Building the IT infrastructure for the next decade”

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Florida State University

On-line in “30 minutes”

• Apply for admission and be accepted

• Apply for financial aid, including the FAFSA, receive an award, issue credits and initiate funds transfer

• Apply for housing and receive a housing assignment

• Enroll in classes

__________________

FSU reports general agreement with OSFA for their design

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Students expectations shaped by...

• Their experience applyingfor federal financial aid

• Their use of financial services portals

• Their use of the Internet

• Their life in a “real-time, information rich” environment

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Students now expect...

• Customer service 24 hours a day,7 days a week

• Complete information froma single source

• Delivery by Web, e-mail, telephone, and facsimile, and, wireless devices

• response time of 15 seconds for telephone, 10 seconds for Web, and 2 hours for e-mail and facsimile

• access to a complete customer history

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

College students choose a Web site...

Ranked by importance

• College or university’s portalif adequate

• Suggestions of other students

• Print advertisements

• Web search

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Is technology important?

• Technology determines the quality of e-services you offer to Web-savvy prospective students, students, alumni, and public.

• Technology determines with whom you do e-business how it is done.

___________________

From the institutional perspective, financial aid is not a priority

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

SFA technology choices

Announced February 2000

XML - B2B Standard Business Messages

XML Schema

Java - Transportable Programs Shared Java Components

Web Implementations – FAFSA

UML - Unified Modeling Language

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

SFA technology under study

SOAP for Internet Data Transport Commercial/Open Source Software

available, supported Recommended by NCHELP’s Electronic

Standards Committee “Commonline” Implemented by the National Student

Clearinghouse, Meteor

UDDI – Universal Discovery, Description, and Integration Directory services, possibly PEPS

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Web services architecture is

• XML “tagged” data contenteXtensible Markup Language

• SOAP data transportSimple Object Access Protocol

• XSL transformations for presentationeXtensible stylesheet language

and now

• UDDI/WSDL directory servicesUniversal Description, Discovery, and Integration, and Web Services Description Language

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Technology standards

M - from Meteor installationO - optional

Industry

OS

FA

Met

eor

J A-S

IGuPort

al

IBM

Web S

erv

ices

Mic

roso

ft.N

et

Sun O

ne

J ava Programming Language O XML Markup Language SOAP Data Transport M UDDI Directory M WSDL Service Description M

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

Support of Web services

• Feb 2000 - OSFA U.S. Department of Education

• Sep 2000 - NCHELP CommonLine Electronic Standards Committee

• Oct 2000 - NCHELP’s Meteor Project

• Dec 2000 - IBM Corporation

• Feb 2001 - Sun Microsystems

• Mar 2001 - Microsoft Corporation

inst

ruct

ion

al

med

ia +

mag

ic,

inc.

A technology strategy

• Align student financial aid requirements with institutional information technology standards and practices

• Align technology choices with industry, SFA standards

• Monitor collaborative efforts

• Consider outsourcing financial aid services

• Specific functions

• With local integration

The end

www.immagic.com