20 USC 1018 - Administrative simplification of student aid delivery

Collapse to view only § 1018b. Administrative simplification of student aid delivery

§ 1018. Performance-Based Organization for delivery of Federal student financial assistance
§ 1018a. Procurement flexibility
§ 1018b. Administrative simplification of student aid delivery

§ 1018. Performance-Based Organization for delivery of Federal student financial assistance

(a) Establishment and purpose

(1) Establishment

(2) PurposesThe purposes of the PBO are—

(A) to improve service to students and other participants in the student financial assistance programs authorized under subchapter IV, including making those programs more understandable to students and their parents;

(B) to reduce the costs of administering those programs;

(C) to increase the accountability of the officials responsible for administering the operational aspects of these programs;

(D) to provide greater flexibility in the management and administration of the Federal student financial assistance programs;

(E) to integrate the information systems supporting the Federal student financial assistance programs;

(F) to implement an open, common, integrated system for the delivery of student financial assistance under subchapter IV; and

(G) to develop and maintain a student financial assistance system that contains complete, accurate, and timely data to ensure program integrity.

(b) General authority

(1) Authority of SecretaryNotwithstanding any other provision of this part, the Secretary shall maintain responsibility for the development and promulgation of policy and regulations relating to the programs of student financial assistance under subchapter IV. In the exercise of its functions, the PBO shall be subject to the direction of the Secretary. The Secretary shall—

(A) request the advice of, and work in cooperation with, the Chief Operating Officer in developing regulations, policies, administrative guidance, or procedures affecting the Federal student financial assistance programs authorized under subchapter IV;

(B) request cost estimates from the Chief Operating Officer for system changes required by specific policies proposed by the Secretary; and

(i) the administration of the systems used to administer the Federal student financial assistance programs authorized under subchapter IV; and

(ii) the updating of such systems to current technology.

(2) PBO functionsSubject to paragraph (1), the PBO shall be responsible for the administration of Federal student financial assistance programs authorized under subchapter IV, excluding the development of policy relating to such programs but including the following:

(A) The administrative, accounting, and financial management functions for the Federal student financial assistance programs authorized under subchapter IV, including—

(i) the collection, processing, and transmission of data to students, institutions, lenders, State agencies, and other authorized parties;

(ii) the design and technical specifications for software development and procurement for systems supporting the Federal student financial assistance programs authorized under subchapter IV;

(iii) all software and hardware acquisitions and all information technology contracts related to the administration and management of student financial assistance under subchapter IV;

(iv) all aspects of contracting for the information and financial systems supporting the Federal student financial assistance programs authorized under subchapter IV;

(v) providing all customer service, training, and user support related to the administration of the Federal student financial assistance programs authorized under subchapter IV; and

(vi) ensuring the integrity of the Federal student financial assistance programs authorized under subchapter IV.

(B) Annual development of a budget for the activities and functions of the PBO, in consultation with the Secretary, and for consideration and inclusion in the Department’s annual budget submission.

(C) Taking action to prevent and address the improper use of access devices, as described in section 1092b(d)(7) of this title, including by—

(i) detecting common patterns of improper use of any system that processes payments on Federal Direct Loans or other Department information technology systems;

(ii) maintaining a reporting system for contractors involved in the processing of payments on Federal Direct Loans in order to allow those contractors to alert the Secretary of potentially improper use of Department information technology systems;

(iii) proactively contacting Federal student loan borrowers whose Federal student loan accounts demonstrate a likelihood of improper use in order to warn those borrowers of suspicious activity or potential fraud regarding their Federal student loan accounts; and

(iv) providing clear and simple disclosures in communications with borrowers who are applying for or requesting assistance with Federal Direct Loan programs (including assistance or applications regarding income-driven repayment, forbearance, deferment, consolidation, rehabilitation, cancellation, and forgiveness) to ensure that borrowers are aware that the Department will never require borrowers to pay for such assistance or applications.

(3) Additional functions

(4) Independence

(5) Audits and review

(6) Changes

(A) In general

(B) Revisions to agreement

(1) Performance plan

(A) In general

(B) Consultation

(C) AreasThe plan shall include a concise statement of the goals for a modernized system for the delivery of student financial assistance under subchapter IV and identify action steps necessary to achieve such goals. The plan shall address the PBO’s responsibilities in the following areas:

(i) Improving service

(ii) Reducing costs

(iii) Improvement and integration of support systems

(iv) Delivery and information system

(v) Other areas

(2) Annual reportEach year, the Chief Operating Officer shall prepare and submit to Congress, through the Secretary, an annual report on the performance of the PBO, including an evaluation of the extent to which the PBO met the goals and objectives contained in the 5-year performance plan described in paragraph (1) for the preceding year. The annual report shall include the following:

(A) An independent financial audit of the expenditures of both the PBO and the programs administered by the PBO.

(B) Financial and performance requirements applicable to the PBO under the Chief Financial Officers Act of 1990 and the Government Performance and Results Act of 1993.

(C) The results achieved by the PBO during the year relative to the goals established in the organization’s performance plan.

(D) The evaluation rating of the performance of the Chief Operating Officer and senior managers under subsections (d)(4) and (e)(2), including the amounts of bonus compensation awarded to these individuals.

(E) Recommendations for legislative and regulatory changes to improve service to students and their families, and to improve program efficiency and integrity.

(F) Other such information as the Director of the Office of Management and Budget shall prescribe for performance based organizations.

(3) Consultation with stakeholdersThe Chief Operating Officer, in preparing the report described in paragraph (2), shall establish appropriate means to consult with students, borrowers, institutions, lenders, guaranty agencies, secondary markets, and others involved in the delivery system of student aid under subchapter IV—

(A) regarding the degree of satisfaction with the delivery system; and

(B) to seek suggestions on means to improve the delivery system.

(4) Briefing on enforcement of student loan provisionsThe Secretary shall, upon request, provide a briefing to the members of the authorizing committees on the steps the Department has taken to ensure—

(A) the integrity of the student loan programs; and

(B) that lenders and guaranty agencies are adhering to the requirements of subchapter IV.

(d) Chief Operating Officer

(1) Appointment

(2) Reappointment

(3) RemovalThe Chief Operating Officer may be removed by—

(A) the President; or

(B) the Secretary, for misconduct or failure to meet performance goals set forth in the performance agreement in paragraph (4).

The President or Secretary shall communicate the reasons for any such removal to the authorizing committees.

(4) Performance agreement

(A) In general

(B) Transmittal

(5) Compensation

(A) In general

(B) Bonus

(e) Senior management

(1) Appointment

(A) In general

(B) Compensation

(2) Performance agreement

(3) Compensation

(A) In general

(B) Bonus

(4) Removal

(f) Student Loan Ombudsman

(1) Appointment

(2) Public information

(3) Functions of OmbudsmanThe Ombudsman shall—

(A) in accordance with regulations of the Secretary, receive, review, and attempt to resolve informally complaints from borrowers of loans described in paragraph (1), including, as appropriate, attempts to resolve such complaints within the Department of Education and with institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in the loan programs described in paragraph (1); and

(B) compile and analyze data on borrower complaints and make appropriate recommendations.

(4) Report

(g) Personnel flexibility

(1) Personnel ceilings

(2) Administrative flexibility

(3) Excepted service

(h) Establishment of fair and equitable system for measuring staff performance

(i) Authorization of appropriations

(Pub. L. 89–329, title I, § 141, as added Pub. L. 105–244, title I, § 101(a), Oct. 7, 1998, 112 Stat. 1604; amended Pub. L. 110–315, title I, §§ 103(b)(2), 117, Aug. 14, 2008, 122 Stat. 3088, 3114; Pub. L. 111–39, title I, § 101(b)(5), July 1, 2009, 123 Stat. 1935; Pub. L. 116–251, § 5, Dec. 22, 2020, 134 Stat. 1131.)

§ 1018a. Procurement flexibility

(a) Procurement authority

(b) In generalExcept as provided in this section, the PBO shall abide by all applicable Federal procurement laws and regulations when procuring property and services. The PBO shall—

(1) enter into contracts to carry out the functions set forth in section 1018(b)(2) of this title;

(2) obtain the services of experts and consultants without regard to section 3109 of title 5 and set pay in accordance with such section; and

(3) through the Chief Operating Officer—

(A) to the maximum extent practicable, utilize procurement systems that streamline operations, improve internal controls, and enhance management; and

(B) assess the efficiency of such systems and assess such systems’ ability to meet PBO requirements.

(1) Performance-based servicing contracts

(2) Fee for service arrangements

(d) Two-phase source-selection procedures

(1) In general

(2) First phaseThe procedures for the first phase of the process for a procurement are as follows:

(A) Publication of noticeThe contracting officer for the procurement shall publish a notice of the procurement in accordance with section 1708 of title 41 and subsections (e), (f), and (g) of section 637 of title 15, except that the notice shall include only the following:

(i) A general description of the scope or purpose of the procurement that provides sufficient information on the scope or purpose for sources to make informed business decisions regarding whether to participate in the procurement.

(ii) A description of the basis on which potential sources are to be selected to submit offers in the second phase.

(iii) A description of the information that is to be required under subparagraph (B).

(iv) Any additional information that the contracting officer determines appropriate.

(B) Information submitted by offerors

(3) Second phase

(A) In general

(B) Eligible participants

(4) Procedures considered competitive

(e) Use of simplified procedures for commercial products and commercial services

(f) Flexible wait periods and deadlines for submission of offers of noncommercial products and services

(1) AuthorityIn carrying out a procurement, the PBO may—

(A) apply a shorter waiting period for the issuance of a solicitation after the publication of a notice under section 1708 of title 41 than is required under subsection (a)(3)(A) of such section; and

(B) notwithstanding subsection (a)(3) of such section, establish any deadline for the submission of bids or proposals that affords potential offerors a reasonable opportunity to respond to the solicitation.

(2) Inapplicability to commercial products and services

(3) Consistency with applicable international agreements

(g) Modular contracting

(1) In general

(2) Utility requirement

(3) Conditions for use of authorityThe PBO may use procedures authorized under paragraph (4) for the procurement of an additional module for a system if—

(A) competitive procedures were used for awarding the contract for the procurement of the first module for the system; and

(B) the solicitation for the first module included—

(i) a general description of the entire system that was sufficient to provide potential offerors with reasonable notice of the general scope of future modules;

(ii) other information sufficient for potential offerors to make informed business judgments regarding whether to submit offers for the contract for the first module; and

(iii) a statement that procedures authorized under this subsection could be used for awarding subsequent contracts for the procurement of additional modules for the system.

(4) ProceduresIf the procurement of the first module for a system meets the requirements set forth in paragraph (3), the PBO may award a contract for the procurement of an additional module for the system using any of the following procedures:

(A) Single-source basis

(B) Adequate competitionAward of the contract on the basis of offers made by—

(i) a contractor who was awarded a contract for a module previously procured for the system after having been selected for award of the contract under this subparagraph or other competitive procedures; and

(ii) at least one other offeror that submitted an offer for a module previously procured for the system and is expected, on the basis of the offer for the previously procured module, to submit a competitive offer for the additional module.

(5) Notice requirement

(A) Publication

(B) Exception

(6) Documentation

(7) Simplified source-selection procedures

(h) Use of simplified procedures for small business set-asides for services other than commercial services

(1) AuthorityThe PBO may use special simplified procedures for a procurement of services that are not commercial services if—

(A) the procurement is in an amount not greater than $1,000,000;

(B) the procurement is conducted as a small business set-aside pursuant to section 644(a) of title 15; and

(C) the price charged for supplies associated with the services procured are items of supply expected to be less than 20 percent of the total contract price.

(2) Inapplicability to certain procurementsThe authority set forth in paragraph (1) may not be used for—

(A) an award of a contract on a single-source basis; or

(B) a contract for construction.

(i) Guidance for use of authority

(1) Issuance by PBO

(2) Guidance from OFPP

(3) Compliance with OFPP guidance

(j) Limitation on multiagency contracting

(k) Laws not affected

(l) DefinitionsIn this section:

(1) Commercial product

(2) Commercial service

(3) Competitive procedures

(4) Single-source basis

(5) Special rules for commercial products and commercial services

(6) Special simplified procedures

(Pub. L. 89–329, title I, § 142, as added Pub. L. 105–244, title I, § 101(a), Oct. 7, 1998, 112 Stat. 1611; amended Pub. L. 110–315, title I, § 118, Aug. 14, 2008, 122 Stat. 3116; Pub. L. 115–232, div. A, title VIII, § 836(g)(2), Aug. 13, 2018, 132 Stat. 1872.)

§ 1018b. Administrative simplification of student aid delivery

(a) In general

(b) Participation in standard setting organizations

(1) The Chief Operating Officer shall participate in the activities of standard setting organizations in carrying out the provisions of this section.

(2) The Chief Operating Officer shall encourage higher education groups seeking to develop common forms, standards, and procedures in support of the delivery of Federal student financial assistance to conduct these activities within a standard setting organization.

(3) The Chief Operating Officer may pay necessary dues and fees associated with participating in standard setting organizations pursuant to this subsection.

(d) Use of clearinghouses

(e) Data security

Any entity that maintains or transmits information under a transaction covered by this section shall maintain reasonable and appropriate administrative, technical, and physical safeguards—

(1) to ensure the integrity and confidentiality of the information; and

(2) to protect against any reasonably anticipated security threats, or unauthorized uses or disclosures of the information.

(f) Definitions

(1) Clearinghouse

(2) Standard setting organization

The term “standard setting organization” means an organization that—

(A) is accredited by the American National Standards Institute;

(B) develops standards for information transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this section; and

(C) is open to the participation of the various entities engaged in the delivery of Federal student financial assistance.

(3) Voluntary consensus standard

(Pub. L. 89–329, title I, § 143, as added Pub. L. 105–244, title I, § 101(a), Oct. 7, 1998, 112 Stat. 1615.)