The Free Application for Federal Student Aid (FAFSA) Simplification Act made several changes to the FAFSA, including changing the formula for determining student financial assistance need and simplifying the application. The rollout of the redesigned 2024–2025 FAFSA application encountered issues that affected students’ ability to apply for aid. The Department of Education (Department) has also introduced several student loan forgiveness initiatives, including an initial debt relief plan, the Student Debt Relief loan discharge program, and the Saving on a Valuable Education Plan. As a result of Congressional concerns related to resources spent on these initiatives, we initiated a review to determine whether the Department’s Federal Student Aid (FSA) office could account for resources expended under these initiatives. We conducted an inspection to determine if (1) for the FAFSA Simplification Act and student loan forgiveness initiatives, FSA has prepared accountings of appropriated funds, obligations, administrative expenses, and staffing for fiscal years (FY) 2021–2024; and (2) FSA provided Congress with detailed spend plans of anticipated uses of funds made available under the FYs 2021–2024 appropriations laws. We found that FSA does not have readily available full accountings of appropriated funds, obligations, administrative expenses, and staffing related to its FAFSA Simplification Act and student loan forgiveness initiatives for FYs 2021–2024. We also found that FSA provided spend plans to Congress from FYs 2021–2024 as required by the respective appropriations acts, though FSA’s initial submissions to Congress were late in all four fiscal years. Additionally, one of the required subsequent quarterly updates was not submitted in FY 2023, and another quarterly update was late in FY 2024. We also found that the spend plans provided limited information specific to the use of funds for FSA’s FAFSA Simplification Act and student loan forgiveness initiatives.
Open Recommendations
| Recommendation Number | Significant Recommendation | Recommended Questioned Costs | Recommended Funds for Better Use | Additional Details | |
|---|---|---|---|---|---|
| 1.1 | Yes | $0 | $0 | ||
| We recommend the FSA Chief Operating Officer assess the feasibility and appropriateness of implementing a managerial cost accounting system in consultation with relevant Department officials, the Office of Management and Budget, and other Federal agencies, such as those highlighted in the report referenced above. | |||||
| 1.2 | Yes | $0 | $0 | ||
| We recommend the FSA Chief Operating Officer evaluate the financial information requirements for FSA’s initiatives and projects and determine if FSA’s existing information systems support the reporting of financial information consistent with the expectations of external stakeholders. | |||||
| 2.1 | Yes | $0 | $0 | ||
| We recommend the FSA Chief Operating Officer, in coordination with the Department of Education's Budget Director, ensure that spend plans and quarterly updates are submitted timely and comply with requirements. | |||||
