Secretary Cardona Outlines Steps to Modernizing the Office of Federal Student Aid

EDITOR'S NOTE: The following message was posted today on the Education Department's Homeroom blog.

In a letter sent to all staff today, U.S. Secretary of Education Miguel Cardona outlined comprehensive steps the Department is taking to improve Federal Student Aid (FSA) for students, families, borrowers, and schools. These efforts will ensure FSA works better and addresses ongoing management and operational challenges. Specifically, the Department is taking the following steps:

• Searching for a new Chief Operating Officer (COO) for FSA.
• Conducting a full-scale review of FSA’s current and historical organization, management, staffing, workflow structures, business processes, and operations to continue bringing the federal financial aid system into to the 21st century.
• Hired an independent consulting firm to make recommendations to the COO and the Secretary on ways to improve the design, structure, and processes within FSA, with a focus on building an updated organizational structure and workflow.
• Reviewing contracts and acquisition procedures to ensure contracts are appropriately structured to hold vendors accountable for meeting key deadlines, achieving desired outcomes, and providing the best value to the agency and protecting taxpayers’ resources.
• The Department is also restructuring senior leader reporting protocols to increase accountability and make sure we provide the best value to the agency and protect taxpayers’ resources.
• The Department will also create a new IT innovation team empowered to lead information technology design to support the digital transformation of the organization. This new team will oversee recruitment of top engineers, project managers, and designers who will bring critical information technology expertise and experience to strengthen FSA’s work in this area.
• Seeking input from the Office of the Inspector General (OIG) and engaging Members of Congress, whose constituents receive services from FSA.
• Continuing our robust outreach efforts to parents, students, colleges, and community organizations, and conduct listening sessions with them this summer.

The Secretary’s full letter to staff follows below:

Dear Colleagues,

For half a century, Federal Student Aid (FSA) has helped millions of Americans access higher education. Today, FSA maintains the same mission. But like any organization, its methods and scope of work have changed dramatically over time, and the environment where it now operates is continuously evolving.

FSA has worked to accommodate those changes over the years, including fulfilling congressional directives under tight budgetary constraints and addressing ongoing management and operational challenges.

Over the last three years, the Department and FSA have made great strides in making sure federal financial aid is put in the hands of students. We have also taken unprecedented steps to protect borrowers from servicing errors while holding servicers accountable. However, changes are needed to make sure students, borrowers, and families have a better user experience with FSA, and we can achieve better outcomes for the millions of people we serve.

Today, I am announcing new, comprehensive efforts to improve FSA for students, families, borrowers, and schools. These efforts include changes in leadership, boosting oversight and accountability, and engaging a variety of stakeholders so that FSA works best for our most important stakeholders—students and families.

New Leadership

The Department has already begun a search for a new Chief Operating Officer (COO) for FSA. This leader will be responsible for launching a full-scale effort to improve the management and execution of critical services and projects, with a focus on information technology and development. FSA’s next COO will have extensive executive leadership experience, as well as an understanding of complex, interconnected programs and services. This leader will have a strong commitment to best serving our students, families, borrowers, and schools.

While the search for a new COO is underway, Denise Carter has been named Principal Deputy Chief Operating Officer (PDCOO). A seasoned leader at the Department, PDCOO Carter brings more than three decades of experience managing complex, multifaceted organizational components with rigor, dedication, and efficiency. She understands the importance of immediate-term improvements to FSA’s execution and management and is already taking steps to tighten processes for FSA projects and programs.

Transforming Operations and Improving Oversight

The Department is committed to carrying out transformational changes at FSA, informed by input from students, educators, and experts in systems design.

To meet increased demand and improve the student and borrower experience, the Department will undertake a full-scale review of FSA’s current and historical organization, management, staffing, workflow structures, business processes, and operations.

This includes a review of contracts and acquisition procedures to hold vendors accountable for performance issues.

The Department has also hired an experienced, independent firm that will make recommendations to the COO and me on ways to improve the design of FSA, with a focus on building an updated organizational structure and workflow. This will enable FSA to achieve its objectives effectively and efficiently, including supporting students, families, borrowers, and schools.

In addition to considering external recommendations, the changes will also include an immediate restructure of senior leader reporting protocols to increase outcome-based accountability.

The new leadership at FSA, in consultation with the Department, will be examining FSA’s leadership needs, changing work assignments, and bringing in senior leaders to oversee critical workstreams. They are also onboarding IT team members empowered to lead and support innovative information technology development and implementation. This includes recruiting top engineers, project managers, and designers who will bring critical information technology expertise and experience to support the 2025-2026 FAFSA implementation and other key information technology initiatives.

Engagement with External Stakeholders

To ensure both internal and external input into the process of improving services at FSA, the Department will seek input from the Office of Inspector General (OIG) and engage Members of Congress, whose constituents receive services from FSA.

We look forward to engaging the OIG. OIG’s thoughtful analysis, insight, and experience with holistic reviews will support our efforts to modernize, improve operations, and create efficiencies within FSA.

Similarly, we welcome the opportunity to work in bipartisan fashion with key congressional leaders. Continuing engagement on planned improvements with congressional partners is critical to ensuring that initiatives will better serve the needs of the millions of constituents that FSA supports.

Finally, we will maintain our robust outreach efforts to parents, students, colleges, and community organizations that have been critical partners in boosting FAFSA® submissions and troubleshooting applications at a grassroots level. Listening sessions with stakeholders this summer will drive program delivery and improvements at FSA. To date, FSA has processed more than 10 million FAFSA® applications.

As we implement these changes at FSA, we remain committed to ensuring its core functions continue. From administering the FAFSA®, awarding Pell Grants and campus-based aid, managing student loans, overseeing more than 5,000 institutions of higher education, and more—we are working tirelessly to help all students have access to the resources they need to attain higher education.

Sincerely,

Miguel A. Cardona, Ed. D.
U.S. Secretary of Education