Click for next page ( 164


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

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

OCR for page 163
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.

OCR for page 163
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

OCR for page 163
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

OCR for page 163
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

OCR for page 163
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

OCR for page 163
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

OCR for page 163
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,

OCR for page 163
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

OCR for page 163
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

OCR for page 163
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

OCR for page 163
74 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

OCR for page 163
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

OCR for page 163
76 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.