Salaries and expenses

What this funds

' FSA Information Technology (IT) Activities--For fiscal year 2027, the Administration more than the fiscal year 2025 level. The requested funds will enable FSA to implement sound technology solutions that allow students and parents to apply for, receive, and manage their federal student aid, as well as oversee the institutions of higher education that participate in the Title IV programs. This category includes support that will further drive FSA's move toward Cloud services, enterprise implementation of artificial intelligence (AI) tools and techniques, modernized IT solutions, and a robust cybersecurity program that protects critical networks and information. More information is provided in the FSA IT Activities section on page 24. ' Other FSA Activities--For fiscal year 2027, the Administration requests $44.5 million for Other FSA Activities, $39.9 million more than the fiscal year 2025 level. The requested funds will enable ongoing operations and support activities that improve performance, outcomes, and financial integrity of program delivery. This funding will continue contract support that enables the borrower defense to repayment branch to adjudicate cases timely, provide oversight and enforcement to institutions of higher education, provide operations and maintenance for the FSA Partner Connect platform that is becoming schools' one- stop shop to accessing FSA systems, and sustain other systems necessary to support the financial aid lifecycle. More information is provided in the Other FSA Activities section ' Personnel Compensation and Benefits (PC&B) and Non-FSA Activities--For fiscal year 2027, the Administration requests $370.7 million for Personnel Compensation and Benefits (PC&B) and Non-FSA Activities, $76.7 million less than the fiscal year 2025 level. This request supports 1,065 Full-Time Equivalent (FTE) in FSA, Departmental support activities, rent, and other overhead. More information is provided in the PC&B and Non-FSA Activities section on page 30. Costs by major category and percentage of the total fiscal year 2027 Budget Request Costs by sub-category and percentage of the total fiscal year 2027 Budget Request increase from the fiscal year 2025 request for this category. Loan Servicing represents the largest portion of FSA's budget because of the cost associated with providing customer service to the large portfolio of borrowers. This amount supports a full year of operations for the Unified Servicing and Data Solution (USDS) contract and development activities associated with Perkins Under this Administration, FSA began improving the financial health of the federal student loan portfolio with the goal of dramatically increasing the number of borrowers in repayment, reducing delinquency and default, and increasing voluntary, on-time collections, including by working with the U.S. Department of Treasury to leverage their expertise in default collections. FSA continues to strengthen operations of the federal student loan portfolio through robust contact-center support and modernization activities that restore repayment and collections to a near pre-pandemic level of performance across the portfolio. FSA continues to engage borrowers, vendors, and key stakeholders to provide clear information and tools to help borrowers make sound financial decisions and choose loan repayment options that reduce the percentage of borrowers that become delinquent or enter default. FSA is committed to providing additional support to struggling borrowers who are at-risk and leveraging every available repayment and rehabilitation tool to put them on a productive path toward repaying their federal student loans, including an outreach plan targeting borrowers in default. In January 2026, the Department paused involuntary collections including Administrative Wage Garnishment and Treasury offsets--to give borrowers more time to explore options to repay their loans. The temporary delay enables the Department to implement major student loan repayment reforms under the WFTCA. These reforms, which included simplified repayment options and an additional opportunity for borrowers to rehabilitate their loans, reflect the Administration's commitment to provide better support for current and future borrowers in repayment. FSA's USDS contracts encompass a range of services, including platform management, contact center operations, and manual processing activities for loan servicing tasks. These performance- based contracts are focused on helping borrowers understand their options and repay their loans on-time by delivering positive customer experiences. FSA reduced the outstanding inventory of Income Driven Repayment plan applications by 73 percent, from 2.01 million to 556,000. The vendors are incentivized to help borrowers remain current on their loans through the new borrower allocations and the pricing structure for loan servicing. Each servicer's new borrower 1 Details may not add to the total due to rounding. allocation is based upon that servicer's delinquency and default prevention performance in relation to the other servicers. Servicers are paid per borrower in their system. When a borrower defaults, they are transferred off of the servicer's system and onto the Debt Management and Collection System (DMCS), resulting in lost revenue for the servicer. Additionally, FSA has used an At-Risk Incentive Program to provide incentive payments to the loan servicers based on the number of identified at risk borrowers that are in current payment status at the end of the FSA has made significant improvements to make it easier and faster for borrowers to choose repayment options such as enrolling in auto-pay and sharing Federal Tax Information (FTI) from the Internal Revenue Service to streamline enrollment in IDR plans. FSA is engaged in improving the accuracy of data on borrower loan histories at the student loan servicers, speeding up application processing through automation, and improving the contact center experience through more helpful communications. Continued investment is essential to deliver progress on key performance outcomes, including prompt and accurate service, as well as overall customer satisfaction. Requested funds will further enhance targeted communications to enable borrowers to manage their loans successfully. Technology investments by servicers and FSA will provide additional integration, automation, and artificial intelligence tools focused on the user experience. FSA is working toward a pilot to integrate Aidan. FSA's artificial intelligence enabled virtual assistant on StudentAid.gov, with loan servicers to provide a more seamless user experience. From March 2025 to January 2026, Aidan deflected 2.3 million authenticated user sessions, achieved an average 88 percent resolution rate, and delivered a cost avoidance totaling FSA plans to increase access to intelligence tools for borrowers through improved integration with StudentAid.gov, including streamlining and updating applications for repayment plans. This integration will ensure a seamless and one-stop digital platform where borrowers can accomplish all necessary tasks within a unified interface. FSA also plans additional updates to the loan rehabilitation process, including allowing borrowers to apply to rehabilitate defaulted loans

Extracted from Student Aid Administration, p. 34. Verbatim; nothing here is paraphrased.

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