Andersen wins Education pact

Andersen wins Education pact

OSFA's Greg Woods says the agency will use $40 million of its 2000 budget

Student loan systems set for overhaul

By Frank Tiboni

GCN Staff

The Education Department last week chose Andersen Consulting of Chicago to oversee the $200 million to $300 million modernization of its student loan systems.

The department is implementing projects outlined in the Office of Student Financial Assistance's modernization blueprint, said Greg Woods, OSFA's chief operating officer. The blueprint, which OSFA released this summer, lays out the office's plans for completely overhauling the government's student loan programs by September 2001 [GCN, July 12, Page 1].

Education and Andersen have not finalized the contract. The department is negotiating a blanket purchasing agreement with Andersen through the General Services Administration's Information Technology Schedule. Education selected Andersen over two other finalists during a fast-track two-month procurement process, Woods said.

OSFA has earmarked $407 million for systems in fiscal 2000. Of that, the office plans to spend $40 million on finalizing and implementing the modernization plan, he said.

Education based its modernization on that of the IRS. Like the tax agency, OSFA developed a blueprint to guide its organizational and technical overhaul. Education, also like the IRS, is restructuring its organizations around the primary groups to which it provides services: students, schools and financial institutions.

'Current operations are hampered by out-of-date technology and processes that waste time and money,' according to the blueprint, which is posted on the Web at

For example, the central processing system, which handles financial-aid applications and determines student eligibility, and the Family Federal Education Loan system, which tracks defaulted student loans issued by private lenders approved by Education, run Cobol code written in the 1970s [GCN, Aug. 10, 1998, Page 6].

Between now and next fall, Education and Andersen will finalize the overhaul plans and work on core system redesigns and consolidations. Once the department has created a foundation of core systems, the modernization will move into its next phase. Set to begin late next year, that part of the effort includes a variety of projects:

' Tailoring a Web page for academic and financial institutions

' Creating a single accounting system

' Simplifying the department's aid origination and disbursement system

' Creating an electronic billing and payment system

' Permitting the use of electronic signatures

' Assembling a portfolio of risk management tools

' Creating an employee performance evaluation system

' Rebuilding many of the department's business applications.

GCN staff writer Christopher J. Dorobek contributed to this story.


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