Annually, these programs provide more than $50 billion in student aid to approximately 8 million students and their families. As a consequence, the student financial aid environment is large and complex. In October 1998, Congress established FSA as the government’s first PBO. FSA Has Three Strategic Goals Addressing Important Outcomes

FSA’s performance plan discusses strategic goals for increasing customer and employee satisfaction and reducing unit costs. Measures of customer satisfaction would not capture these initial efforts. FSA Experimenting with Balanced Scorecard to Link Employee’s Day-to- Day Activities to Strategic Goals

In order to help employees connect the work of individual teams to the FSA-wide strategic goals, FSA’s management has adopted the “balanced scorecard.” The scorecard is intended to provide a simple, one-page presentation of FSA’s performance on its three strategic goals. FSA Has Begun to Better Organize and Manage Its Workforce, but Gaps Exist in Its Human Capital Strategy

FSA has begun to better organize its services and manage its employees, but gaps exist in its human capital strategy and it has not yet implemented performance management initiatives to fully develop and assess its employees. Education Continues to Take Steps to Clarify FSA’s Level of Independence

Education continues to take steps to clarify FSA’s level of independence and its relationship with other Education offices. Education is currently reviewing FSA’s role and responsibilities as part of that overall departmentwide management planning effort.
What GAO Found

The Department of Education's Office of Federal Student Aid (FSA) administers more than $53 billion in financial aid for more than 8.1 million students. Since 1990, GAO has included student financial aid on its high-risk list. To address these and other long-standing management weaknesses, Congress established FSA as a performance-based organization (PBO) within Education in 1998. To develop and implement a strategic direction, FSA set three strategic goals, created indicators to measure progress toward these goals, and developed a tool to link employees' day-to-day activities to these goals. The goals are to (1) increase customer satisfaction, (2) increase employee satisfaction, and (3) reduce unit cost. FSA's efforts have generally improved customer and employee satisfaction scores. FSA has begun to implement some human capital practices to better organize its services and manage its employees. But gaps exist, and FSA has not yet implemented performance management initiatives to develop and assess its employees. To better serve customers, FSA reorganized to reflect its different customers--students, schools, and financial partners. To encourage accountability, FSA is linking staff bonuses to FSA's strategic goals. Education continues to clarify FSA's level of independence and is now reviewing FSA's role and responsibilities as part of the departmentwide management planning effort.