Education performance plan leans heavily on IT

Education performance plan leans heavily on IT

COO Greg Woods says re-engineering will save money.

Goal is to use centralized, automated tools to cut costs and improve service by reducing paperwork

By Frank Tiboni
GCN Staff

The Education Department recently released a draft performance plan that calls for building an integrated system for delivering student loans.

The five-year Office of Student Financial Assistance plan calls for using information technology to im-prove customer service, reduce costs and boost employee satisfaction, said Greg Woods, OSFA's chief operating officer.

'We aren't integrating just to integrate, but we do have a major integration and modernization effort driven by the payoffs that technology can buy us in better and cheaper service delivery,'' Woods said.

Education in August chose Andersen Consulting of Chicago to oversee the $300 million modernization of its student loan systems [GCN, Aug. 30, Page 1].

The department plans to reduce costs by implementing a financial system to centralize the administration of student aid. The department wants a system that makes it easy to track the expenses by units, such as per-application costs, Woods said.

A goal of the new financial system will be to give every manager such cost information routinely, he said. OSFA wants to have the initial elements of the system up and running by next month, Woods said.

'When we begin receiving data from our new financial system, we hope to improve our measurement of unit costs,'' he said.

Education next year plans to reduce costs enough to reinvest $18 million in systems modernization projects. That investment will in turn produce further savings and service improvements in years 3 and 4, Woods said.

Loans online

Because the loan process still uses a lot of paper, it is expensive. So next year, the department will shift 1 million applicants from paper to electronic transactions.

Electronic payments cost about 12 cents each compared with $2 for paper loan payments, he said.

Soon Education also will continue its data center consolidation efforts to a single center in Connecticut. Ultimately, the department can save 10 percent on its day-to-day computing costs.

Re-engineering the department's direct loan processing will also generate substantial savings, Woods said.

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