Risky business

Education Department officials have made it a priority to have the Office of Student Financial Assistance Programs removed from the General Accounting Office's list of so-called high-risk government programs that face major management challenges.

The problems at OSFAP include "a lack of financial and management information, information systems control weaknesses, the high dollar amount of student loans in default, student-level fraud and inadequate school monitoring," according to a report issued this month by Education's new Management Improvement Team.

Of 165 recommendations that could affect OSFAP's high-risk designation, Education has enacted six of them and developed corrective action plans for 40 others.

The report acknowledges the risks inherent in providing loans to millions of students who have no demonstrated credit worthiness and that involve numerous schools, lenders and contractors. However, the department "is committed to demonstrating responsible management of the problems in order to be removed from the high-risk list," according to the report.