Education upgrade enhances, smooths flow of student aid

New data center to reduce servers and accommodate spikes in volume

Students might not notice it, but the process of applying for financial aid will run more smoothly as the Education Department streamlines and integrates administrative systems that work behind the scenes.

With 94 percent of college-bound students applying for grants and loans online, systems cannot falter, said Terri Shaw, Federal Student Aid chief operating officer.

Education is in the middle of a five-year plan that is updated annually to integrate its Federal Student Aid systems, improve program integrity, reduce administration costs and improve customer services. These include back-end and some customer-facing applications and systems.

“As part of our sequencing plan, we put a circle around the back-end systems,” Shaw said.

First, Federal Student Aid awarded the Common Services for Borrowers contract in 2004 to re-engineer its back-end functions and business processes. That contract consolidates direct loan-servicing functions, collection of its $18 billion defaulted loan portfolio and debt consolidation under the direct loan program. Education estimates that it will save $1 billion over 10 years. ACS Education Solutions LLC of Dallas is the contractor.
For front-end business processes, Education did a similar re-engineering concept with its ADvance program, which puts all the systems and services that were individual contracts under an umbrella agreement let in 2004. Education is currently collecting requirements for the system but estimates that it will save $500 million over its lifecycle when deployed.

Front-office business functions support student aid awareness and outreach, the aid application, determination of eligibility and disbursement of direct loans under the direct loan program to borrowers. Education continues to use the Common Origination and Disbursement system, which Accenture LLP is providing until 2009. It consolidates and integrates the legacy systems that support the federal aid grants and loans.

Responsive system

The latest piece in the sequencing strategy is a slimmed-down but higher-capacity data center that also will promote improved security controls and quick response to sharp increases in usage, said Federal Student Aid CIO Katie Blot. A critical component is server consolidation.

“The virtual data center is core to all systems, and business and IT integration, and consolidation. It’s literally a common computing environment,” Blot said. “It may not be one physical location, but it’s one virtual location where all our business applications and supporting infrastructure will reside.”

The common environment will let Federal Student Aid more easily consolidate and integrate business applications because they are co-located and share standard toolsets, she said.

That translates to other improvements, such as better security controls and the ability to rapidly deploy security enhancements across applications at the same time, Blot said.

The transition to the new data center will be transparent to students, parents and institutions.

“What it should do is make it a lot easier for us to react and be proactive to upcoming spikes and potntially unanticipated volume increases,” she said.

Federal Student Aid will have the ability to move and deploy technology across the environment more rapidly, as opposed to having it tightly coupled with a particular business application, Blot said.

“We’ll have a lot of the infrastructure readily available to whichever different system needs it at a given time,” Blot said.

Federal Student Aid annually processes 14 million financial aid applications, delivers $70 billion to 11 million recipients and manages a portfolio of $400 billion in outstanding loans.

Education awarded Perot Systems Government Services Inc. of Fairfax, Va., the 10-year contract worth up to $206 million to provide the virtual data center. The major application it hosts is the Free Application for Student Aid on the Web.

“This is the mission-critical application because there is a deadline for all the students in the country who wish to receive financial aid. It has to be available 24/7,” said Mark Blevins, Perot Systems Government Services senior vice president and lead on work at Education.

Usage spikes

Education releases its annual FAFSA on the Web Jan. 1. Peak processing periods come in late February and early March as students are meeting college and university application deadlines, Shaw said.

Perot will monitor the applications for spikes in usage and the capacity needs.

“That’s where the server consolidation comes in—retiring a half-dozen servers and optimizing those on a more efficient box,” Blevins said.

Education will map out the transition plan to the new data center by November and move the core technologies in January, Shaw said.

“We have to plan around our many business cycles and peak time when applications are submitted, and map out when is the most risk-managed time to migrate business applications,” she said.

Perot will transition all data, hardware, software and telecommunications to its corporate data center in Plano, Texas, by this time next year.

Education also recently awarded Perot Systems a $17.4 million contract to integrate enrollment, eligibility and oversight processes used to manage trading partners as they administer financial aid.

Partners include schools, banks and other lenders, collection agencies, and federal and state agencies.

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