[Congressional Record Volume 143, Number 129 (Wednesday, September 24, 1997)]
[Extensions of Remarks]
[Page E1834]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCING THE 21ST CENTURY STUDENT FINANCIAL AID SYSTEM IMPROVEMENT 
                              ACT OF 1997

                                 ______
                                 

                     HON. HOWARD P. ``BUCK'' McKEON

                             of california

                    in the house of representatives

                     Wednesday, September 24, 1997

  Mr. McKEON. Mr. Speaker, I rise today to introduce the 21st Century 
Student Financial Aid System Improvement Act.
  This month the class of 2001, the first class of students to graduate 
in the new millennium, entered college. These students are preparing 
for the challenges of the information age. Unfortunately the system to 
help them finance their education is not measuring up to the same 
challenges.
  As chairman of the subcommittee with jurisdiction over Federal higher 
education policy, I am responsible for the programs which provide 
Federal assistance in obtaining a higher education. I am pleased that 
the ranking minority member of that subcommittee, Mr. Kildee has joined 
me as an original cosponsor of this legislation. We have listened to 
students, parents, and college officials, with whom we share the goals 
of--a simple and less bureaucratic system of student aid; a modern 
student aid system which is easy for students and parents to use; and 
an efficient and less expensive system that ensures that taxpayer funds 
are being well spent.
  Unfortunately, today, under the current system, taxpayers are paying 
more and students are getting less. The Department of Education's 
budget for information systems has tripled over the last 5 years. Next 
year alone it will spend over $300 million on systems contracts to 
deliver student aid. Yet despite these significant expenditures, the 
current system is still wrapped in miles of redtape, requires dozens of 
paper forms, and suffers from needless processing delays and 
breakdowns.
  Mr. Speaker, I believe that there is a better way for the Department 
of Education to do business. In fact, under the legislation that I am 
proposing today, the Department's student financial aid systems would 
be run more like a business--adopting the best practices from the 
private sector and focusing on bottom line results.
  This legislation would establish a business-like performance based 
organization to manage the computer systems thereby ensuring that the 
Department of Education is not wasting money due to poor contract 
management. The Chief Operating Officer hired to manage this 
organization will be charged with: Simplifying the process of applying 
for financial aid for students and their families; and integrating 
student financial aid systems to improve efficiency, save money, and 
prevent fraud and abuse in the programs.
  According to the GAO, the Department of Education has failed to 
resolve its longstanding management problems in the Office of 
Postsecondary Education, its data quality and management controls are 
inadequate, and its financial statements for the student loan programs 
cannot be audited. A customer-focused, performance-based organization 
within the Department, run by an experienced Chief Operating Officer, 
can take the steps necessary to properly reengineer the current systems 
and contracts. In fact, the Department's own inspector general and the 
Independent Advisory Committee on Student Financial Assistance have 
both advocated this approach. It is also consistent with the 
recommendation to fundamentally restructure the routine processing of 
Federal student aid to take advantage of the best private sector 
practices. which was put forth to the subcommittee by the American 
Council on Education and 22 higher education associations in their 
recommendations for their reauthorization of the Higher Education Act.
  This legislation would also require the Secretary to work 
cooperatively with the higher education community to adopt common and 
open electronic data standards for key elements in the delivery system 
such as digital signatures, personal identification numbers, and single 
institutional identifiers. By adopting these common standards, we can 
make great strides in simplification by eliminating paper forms, and 
unnecessary steps in the current process.
  Students and their families deserve a modern student aid system that 
meets their needs. I urge my colleagues to join Mr. Kildee and me in 
this effort, and to cosponsor this important legislation.

                          ____________________