Modernizing Financial Aid Delivery A Status Report

1. Modernizing Financial Aid DeliveryA Status Report Jim Farmer instructional media + magic, inc. As presented at the 2001 EAC-EASCI Financial Aid Administrator Advisory Board Meeting Thursday, June 14th 2001 Monticello, Minnesota

2. This presentation is based on“Modernizing Federal Financial Aid”a presentation given byStephen Hawald, CIOOffice of Student Financial Assistanceat the May 17, 2001Postsecondary Education Standards Council ConferenceArlington, Virginia

3. The Department of Education’s Office of Student Financial Assistance is the First “Performance Based Organization” “freedom to innovate”

4. 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 Objectives Nov 15, 1999

5. 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 Index University of Michigan Business School

6. 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

7. Annual Cost per Recipient $25 Planned 22.30 $20 Reduction 19.08 18.72 18.06 $15 $10 $5 $0 1999 2000 2004 2004 SFA Goal Projected Reducing Unit Costs SFA FY2001 Performance Plan Each dollar reduction represents $14 million annual savings

8.               CIO Score Card Year One B+ • New Management Team • Training • IT Policy Guide Management • 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 Technologies Operations

9. Two Development Alternatives • “Integrate the Information Systems ... a Transition Strategy for Planning and Managing the [Simultaneous] Replacement of All of the Existing Title IV Systems With an Enterprise Data Base and Six Application Modules.” Implementing the Higher Education Amendments of 1998: Advisory Committee on Student Financial Assistance January 1999 • “Buy a Little, Test a Little, Fix a Little” Modernization Blueprint, April 30, 1999

10. Project EASI Blueprint n 3-year timeframe n 5-year timeframe n Modular n Single implementation n Virtual data network Consolidated data n n Focus on channel n Focus on enterprise n Planned architecture n Conceptual framework Buy a Little, Test a Little, Fix a Little Harry Feely, Project EASI Has Graduated, Aug 28, 1999 5

11. Why “Buy a Little, Fix a Little” • In 2000, High Performance, Reliable Middleware [available] • Immediate Cost Savings From Customer Self-service Via the Web, Voice Response • Decreasing Communication Costs Make a Virtual Data Center Cost-effective • A Customer Interaction Center Improves Satisfaction, Reduces Unit Costs Integration With Middleware Lowers Risk of Failure

12. The IT Imperative In the face of continuous business reinvention, evolve an infrastructure that provides greater flexibility and speed of response

13. Key Technology Drivers • Internet • Truncated Application Cycle • Convergence / Voice / Data / Video

14. Integrated Technical Architecture Objective of ITA Build Is to Design, Build and Integrate the Technical Services, Infrastructure, and Components Required to Enable the Delivery of Three Enterprise Technical Architecture Functions: • Internet/Portals • Data Warehouse • Enterprise Application Integration (EAI)

15. Path Toward Integration • Enterprise Application Integration (EAI)* • IBM’s WebSphere Product • MQ Messaging, Integrator, Workflow • Internet Application Integration (IAI) • SOAP (Simple Object Access Protocol) • UDDI Directory * Tested, Demonstrated in Highway 1 Project Aug-Sep 2000

16. 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 09/30/01

17. PBO Victory Initiatives • Turbo FAFSA  • Common Origination & Disbursement   • Financial Management System with E-Business Center   • NSLDS Mad Dog Changes   • Schools Portal with Single Logon   • E-Sign & P-Note  • Consistent Answers for Customers (Contact Centers, CRM, Customer Data)   • Human Resources Support Systems  • Product Support Analysis (FAFSA, DL Participation, DL e-Servicing)

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

19. FAFSA e-Filers 4.5 4.0 3.5 3.0 2.5 Millions of students 2.0 1.5 1.0 0.5 0.0 97-98 98-99 99-00 00-01 FAFSA On The Web

20. Benefits of Web Applications $23 million Investment Operating Costs SFA Electronic FAFSA

21. Schools Portal Prototype Friday, October 20

22. 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

23. 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

24. L e g a c y S y s t e m s User Directory (LDAP) Authentication Gateway Schools • PINs • Passwords • Personal URLs • Smart Cards • “I Agree” • Buttons • Digital • Signatures • Biometrics Authentication/ Authorization Server Financial Partners Authentication Server Applicants, Students, Borrowers Servers (Web, Application, Portals, Search Engines) OMB Implementation of the GPEA, May 2, 2000 Employees, Contractors Electronic ID Technology Vision

25. 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 Identification December 14, 2000

26. Partnerships • “Open Book” Modernization • Continuing Dialog With the Community • Open Software Developers Conferences • SFA Extranet for Community Feedback • http://extranet.sfa.ed.gov

27. 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 Java J2EE Shared-components

28. Lessons Learned • E-Commerce Solutions Scale to Millions of Users • Multiple Limited IT Projects • Can Be Managed Effectively • Can Be Integrated Through Architecture, Middleware • Provide Immediate Cost Savings • Talented People Are Available for Interesting Projects • Open Standards and Open Source Software Work

29. And the future

30. Expect... • SFA Common Origination and Disbursements • Difficult • Limited volunteers • Minimal vendor support • Electronic Signatures • Limited use of SFA PIN • Replaced by Internet 2/SAML December 2002

31. 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 • The Meteor Project will 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 by 2004

32. Collaboration; the new future • Focus on the student the mutual customer • Implementation of standards-based new technologies interoperability • Shared objectives, shared experience

33. The endwww.immagic.com