OD_Reqs_-_Sec_1_-_Introduction_-_Final_v_3_UPDATED_2-28-14.pdf

O&D Business Requirements

Section 1. Introduction

1.0 Overview

1.0.1 Purpose and Objectives

In order to meet its mission of “Funding America’s Future, One Student at a Time”, Federal Student Aid (FSA) needs the capabilities to originate and disburse loans and grants provided by the federal government to eligible students attending schools participating in Title IV federal student aid programs.

This document provides a description of the future-state “To-Be” business requirements for Origination & Disbursement (O&D). The solution for these O&D business requirements is envisioned to supersede the current Common Origination & Disbursement (COD) contract, which expires September 30, 2015.

FSA has undertaken this initiative in support of the following business objectives:

• Reduce costs – increase transparency into the cost drivers and provide FSA the visibility and tools necessary to provide even more effective oversight of O&D activities so costs can be optimized wherever possible and reduced wherever desired.

• Reduce risks –establish redundant capability for delivery of certain services (i.e., call center support/locations) to minimize a single point of failure.

• Increase severability – in support of reducing both costs and risks, FSA also seeks to improve its acquisition options such that components of O&D, where it makes logical business sense, can be acquired separately if desired.

• Improve capability and service – identify known and latent business requirements for improving the capability and service FSA provides to its stakeholders in enabling the efficient and effective processing of O&D functions.

This section provides an introduction to the business requirements document and background on how it came to be.

1.0.2 Scope

The scope of O&D falls primarily within the “Receive” stage of the student-centric Federal Student Aid Lifecycle, shown in Figure 1-1.

Figure 1-1: Student-Centric Federal Student Aid Lifecycle (source: FSA)

Students interested in post-secondary education and the available federal financial aid typically start the process in the “Aware & Prepare” stage by collecting all necessary information and organizing their documentation, then “Apply” for aid by completing and submitting their application forms.

Aware & Prepare Apply Receive Repay Loan

Resolution

Federal Student Aid, O&D To-Be Requirements 1-1 Introduction

If eligible, aid recipients “Receive” financial aid in the form of loans (monies to be repaid), grants (monies not to be repaid), or work-study awards (on-campus job opportunities) and transition to “Repay” any loans. The final stage of “Loan Resolution” provides for methods to resolve unexpected issues associated with repayment.

O&D’s central focus encompasses the award and financial processing of federal loans and grants. As the name suggests, O&D includes the main business processes of origination (i.e., financial aid “awards”) and disbursement (i.e., “pay outs” of financial aid) of federal loans and grants. In addition, O&D includes those critical business sub-processes that enable origination and disbursement, such as the receipt and processing of origination and disbursement records, linking of promissory notes to loan records, management of school funding authorizations, and reconciling funds provided to schools against cash drawn down by schools for disbursements.

Supporting these mission-centric activities requires various technical and business operations support functions as well. The scope of the O&D business requirements also includes the customer service function to applicants/borrowers and to the schools themselves to ensure accurate and efficient processing of federal loans, grants, and related processes. In addition, the O&D business requirements include the capability for distributing loans and TEACH Grants to various qualified servicers based on an algorithm determined by FSA. The loan distribution function also delivers repayment applications to servicers.

What is included: The goal of this document is to capture the business requirements that enable FSA to perform the key business processes to deliver financial aid to eligible students enrolled in participating Title IV schools. These requirements are not intended to presuppose an existing or certain type of solution or service except as articulated by FSA.

Included are new requirements for the inclusion of Campus Based program funding functionality and student level record reporting for Perkins Loans, FSEOG and FWS.

What is not included: Please note that this document does not attempt to include all supplementary contractual requirements that will be added during the development of the acquisition documentation (e.g., Statement of Work, Performance Work Statement, or a Statement of Objectives). Therefore, the purpose of this document is to describe the basic business needs that any O&D solution must satisfy and by itself is insufficient to capture FSA’s full contractual requirements. The functional components of the O&D Business Requirements are organized into an architectural framework as described in the next section.

1.0.3 O&D Architectural Framework

The FSA O&D Functional Architecture, shown in Figure 1-2, breaks down the functional components of the O&D environment for ease-of-understanding and organizing the O&D Business Requirements.

This functional architecture comprises multiple functional categories (horizontal groupings) broken down into functions (vertical groupings). Each function is supported by multiple modules (boxes). Implementation of business functionality via each module entails a combination of systems and activities supported by appropriate personnel. The detailed business requirements for each module are provided in subsequent sections.

Federal Student Aid, O&D To-Be Requirements 1-2 Introduction

Figure 1-2: FSA Origination & Disbursement (O&D) Functional Architecture

The main O&D functional categories and their constituent functions are:

a. Submission, which consists of the following methods of submitting records for processing by the O&D System:

i. Batch Submission – refers to the batch-mode submission of origination and disbursement records to the O&D System for processing. While most batches are submitted using an XML-based Common Record, other file types are used including flat files and preformatted text files. O&D interfaces with FSA’s Student Aid Internet Gateway (SAIG) to retrieve and send data files.

SAIG is a mailbox system used to exchange data files.

Most commonly, schools use commercial software vendor applications, custom software, FSA-provided software, or third party servicers for exchanging data with the O&D System through the SAIG.

Federal Student Aid, O&D To-Be Requirements 1-3 Introduction

ii. O&D Web Submission – refers to the web module that provides schools, O&D Customer Service Representatives (CSRs) and/or FSA staff an interface to the O&D System and the ability to submit origination and disbursement records. The interface also allows schools to create and submit origination and disbursement records and corrections in a Common Record format for processing.

iii. Applicant Web Submission – refers to the website(s) (currently, StudentLoans.gov and TEACH-ATS.ed.gov) used by applicants (students, parents, borrowers and endorsers) to complete loan and grant processes such as signing an electronic version of the Master Promissory Note (eMPN), PLUS Endorser Addendum, Agreement to Serve (ATS), applying for PLUS Loans, completing entrance and exit counseling, submitting income driven repayment applications, and submitting Direct Loan consolidation applications. These websites interface directly with the O&D System.

iv. Paper Document Submission – refers to the function that receives signed documents including, but not limited to, Master Promissory Notes (MPN) and Endorser Addendums by mail, images and stores the images, and submits data elements from the document to the O&D System for linking to the origination record. The imaging contractor also stores the original documents in a fire proof vault for retrieval and later transfers the documents to permanent storage at a Federal Records Center (FRC). This contractor also prints and mails hard copies of the electronic MPNs at a borrower’s requests.

(Note: This function is currently being performed within FSA’s Front-End Business Integration (FEBI) contract as “Ancillary Services” but the business requirement is included here as part of O&D as it supports O&D business requirements and is envisioned to be part of the future O&D solution.)

b. O&D Processing, which is comprised of the following key activities:

i. Origination and Disbursement Processing – includes the “front-end” functions of ensuring appropriate record format, determining school and student eligibility, processing both real-time and batch origination and disbursement records as well as the related functions of ensuring all prerequisites are met (e.g., MPNs are signed, TEACH agreements are signed, etc.). This function also includes credit check processing for applicants of PLUS Loans as well as the notifications and responses returned to schools and applicants.

ii. Funds Management – the purpose of the Funds Management function is to setup, maintain, process, reconcile, close-out, process post deadline adjustments, and easily retrieve and process archive data for each existing federal student aid program and any new programs created by Congress.

Federal Student Aid, O&D To-Be Requirements 1-4 Introduction

iii. Financial Processing – includes a variety of “back-end” processing such as updates to Current Funding Levels (CFL), Pell Grant processing functions and the financial transaction interfaces with FSA’s Financial Management System (FMS) and the National Student Loan Data System (NSLDS).

iv. Loan Distribution – includes the transfer of “booked loans” (i.e., loans ready for servicing) and TEACH Grants to servicers, based on FSA’s distribution algorithm, and repayment applications.

v. Loan Consolidation – includes the assignment of loan consolidation applications to servicers. Applications are assigned to TIVAS according set business rules.

B. Results and Reporting, which includes the following:

a. Notifications & Responses – includes the responses to schools to confirm receipt of appropriately formatted records for processing and to provide responses on the results of processing.

b. Correspondence – includes letters and other notifications to applicants and schools provided in email and/or paper (mail) formats. The paper correspondence is also available on StudentLoans.gov in PDF format.

c. Reporting Module – captures the scope of reporting requirements for all stakeholders and includes standard pre-defined reports and access to a data warehouse of production-level data and analytical tools for ad hoc analyses and reporting.

d. O&D Operations Portal – covers the need for a central repository for all working documents, contract deliverables, and other operational products to ensure the efficient and effective operations of the O&D environment and oversight by FSA.

C. Web Support – this module includes the capabilities required to support the needs of key participants (namely schools, applicants, and FSA) in the O&D process for a web-based interface to manage their activities. This includes two key web-based capabilities: (1) O&D Web for schools and FSA, and (2) Applicant Web for applicants to complete their required activities, as noted earlier.

D. Operations Support – this module of the functional architecture includes two functional areas:

a. Technical Operations Support, which provides various technical support, service, and technology management functions to ensure all O&D systems are functioning correctly. Technical Operations Support is further organized by the following three areas: (1) Systems Operations and Maintenance, (2) Infrastructure Support, and (3) Systems Enhancements.

Federal Student Aid, O&D To-Be Requirements 1-5 Introduction

b. Program Management Office Support, which includes a variety of business activities and support services to ensure the secure, efficient, and effective operation of the origination and disbursement process and compliance with applicable policies, processes, and procedures.

E. Customer Service

The Origination and Disbursement process is supported by customer service operations that are both applicant and school facing to ensure that end users of the O&D solution are able to efficiently complete the activities and functions required. Currently, mobile capabilities are not provided to applicants/recipients, or to school users.

Because the needs differ significantly between stakeholders, this functional module is organized into the two functional components:

(1) Applicant Support - addresses questions that arise from applicants related to O&D processes, involves processing/approving/denying requests for consideration of extenuating circumstances and maintaining documentation on those requests, and tracks and ensures resolution of system issues reported by callers.

(2) School Support - provides highly technical and operational support to schools participating in Title IV programs. It involves troubleshooting, reporting and tracking system issues and reporting back to callers once those issues have been resolved. School support also provides reconciliation assistance to schools and helps monitor school compliance with cash management and other rules.

1.1 Approach

The purpose of this study was to achieve the following objectives:

• Capture and articulate the “To-Be” business requirements to support the “Receive” process for federal student aid in the forms of financial processing for loans and grants; and

• Serve as input for developing the acquisition strategy for the O&D Contract.

The GCC Technologies team (GCC), working under the guidance of the FSA Acquisitions Team and the FSA Project Management Office (PMO), used the following seven-step approach to derive the “To-Be” business requirements for O&D as shown in Figure 1-3.

Federal Student Aid, O&D To-Be Requirements 1-6 Introduction

Figure 1-3: O&D Business Requirements Approach

1. Identify Artifacts and SMEs – identify and gather the necessary artifacts for review, identify the key subject matter experts (SMEs) and ensure their availability for the project.

2. Review Existing Artifacts – review the existing artifacts to reveal current business requirements and scope of the overall effort.

3. Interview SMEs – in conjunction with reviewing existing artifacts, conduct interviews with SMEs to clarify business processes and current requirements, and to elicit future business requirements.

4. Develop Preliminary Business Requirements – based on this initial effort, capture the preliminary business requirements and identify any known gaps, questions, and issues yet to be addressed.

5. FSA review and feedback – solicit review and feedback by FSA SMEs and ensure all questions and issues are addressed, and any additional requirements are identified.

6. Follow-up Requirements Gathering – conduct additional interviews and review additional artifacts to complete the capture of business requirements.

7. Requirements Completion & Finalization – Update the requirements document based on additional input to represent the most complete and accurate set of business requirements.

Identify Artifacts and SMEs

Review Existing Artifacts

Interview SMEs

Develop Preliminary

Business Requirements

Follow-up

Requirements Gathering

• Clarify business processes and current business requirements.

• Elicit future business requirements.

• Review existing artifacts.

• Capture current business requirements.

Completed

To be completed

Partially Completed

FSA Review and Feedback

• Identify/ gather artifacts.

• Identify and enroll subject matter experts (SMEs).

• Document preliminary business requirements.

• Identify any gaps, questions, and issues.

Develop Final To-Be Business Requirements

• Conduct additional requirements gathering (as needed).

• Review preliminary business requirements.

• Address gaps, questions, and issues.

• Update business requirements.

Federal Student Aid, O&D To-Be Requirements 1-7 Introduction

1.2 Contributors

Table 1-1 includes a list of FSA personnel that participated in meetings and/or workshops during the study and provided their input, which was actively solicited, synthesized, and included in the sections that follow.

PART SECTION /MODULE/TOPIC FSA TEAM MEMBERS

A –OVERVIEW

A - Introduction Requirements Approach & Architectural Framework

Ron Ackermann, Lisa DiCarlo, Stephanie Gross, Jennifer Jaw, Wendy Jerreld, LaShae Jones, Anthony Laing, Sue O’Flaherty, Dan Sullivan, Sarah Utz, Kathy Wicks, John Brooks

A – Overview Overview of FSA Lifecycle and O&D Environment

Ron Ackermann, Lisa DiCarlo, Stephanie Gross, Jennifer Jaw, Wendy Jerreld, LaShae Jones, Anthony Laing, Sue O’Flaherty, Dan Sullivan, Sarah Utz, Kathy Wicks, John Brooks

B – LOANS AND GRANTS PROCESSING

B – Loan & Grants Processing

Loans, TEACH (Submission, Processing, Results/Reporting)

Ron Ackermann, Lisa DiCarlo, Stephanie Gross, Jennifer Jaw, Wendy Jerreld, LaShae Jones, Anthony Laing, Sue O’Flaherty, Sarah Utz, John Brooks

B – Loan & Grants Processing

Grants (Submission, Processing, Results/Reporting)

Ron Ackermann, LaShae Jones, Anthony Laing, Dan Sullivan, Kathy Wicks, John Brooks

B – Loan & Grants Processing

Funds Management (School Funding) and Financial Processing

Ron Ackermann, LaShae Jones, Anthony Laing, John Brooks

B – Loan & Grants Processing Loan Distribution Engine Stephanie Gross, Wendy Jerreld, Sarah Utz, John

Brooks B – Loan & Grants Processing Loan Consolidation Lateata Jackson, Wendy Jerreld, Erik Melis, Lisa

Walker, John Brooks

C – OPERATIONS SUPPORT

C – Operations Support

Technical Operations Support – Systems Operations & Maintenance

Chuck Mahaney, Debbie Miller, Mike Murray, John Brooks

C – Operations Support

Technical Operations Support – New Award Year Development Process

Lisa DiCarlo, Stephanie Gross, Jennifer Jaw, Wendy Jerreld, Chuck Mahaney, Sue O’Flaherty, Sarah Utz, John Brooks

C – Operations Support

Program Management Operations

Ron Ackermann, Lisa DiCarlo, Stephanie Gross, Jennifer Jaw, Wendy Jerreld, Anthony Laing, Chuck Mahaney, Debbie Miller, Mike Murray, Sue O’Flaherty, Sarah Utz, John Brooks

D – CUSTOMER SERVICE

D – Customer Service Applicant Services Sarah Bennett, Sherlene McIntosh, John Brooks

D – Customer Service School Support Services Sarah Bennett, Sherlene McIntosh, John Brooks

Table 1-1: FSA Contributors to the O&D Business Requirements Document.

Federal Student Aid, O&D To-Be Requirements 1-8 Introduction

In addition to the FSA SMEs identified in the table above, the GCC Team received significant support and guidance from the FSA Acquisitions team led by Dega Hussen with additional support from the following individuals: Mark Anderson, Bobby Estep III, Kenneth Finley, and Donny Tang.

1.3 Source Artifacts

Analysis of O&D’s current functionality and development of its future business requirements relied on the following key artifacts:

• Statement of Work (June 2012)

• COD 2012-13 Technical Reference Manual (from FSA Download)

• COD 101 Functional Overview slide presentation (March 2012)

• Direct Loan and Federal Grant Process Flows

• COD Operations Portal Changes 2010

• LDE Operations Guide and the Combined LC/Repayment Operations Guides

• Applicant web sites: studentloans.gov, teach-ats.ed.gov

• COD Web site: Computer-based Training (CBT) for school users

• COD Loan Consolidation Process

• Grants & DL Global Jobs Schedule – FY 2013

• COD Interface Control Documents (ICD)

• LDE Interface Support Guides

A complete list of the artifacts received and/or reviewed for this initiative is provided in Appendix E of this document.

1.4 Document Organization

This document covers the O&D functional modules organized across four main parts, consistent with the Functional Architecture presented earlier. The intent of this document organization is to define the business requirements in groupings that are logical to follow, and if desired, could be used to aid multiple acquisition strategies. That is, some of the Parts noted above could potentially be procured separately, in components, or even subcomponents as desired.

PART A: Overview

Section 1: Introduction – provides summary information about the purpose of this document and its structure and organization.

Section 2: O&D Overview – provides background information about the federal student aid lifecycle within which O&D operates.

PART B: Loan & Grants Processing

Section 3: O&D Submission – covers the business requirements for completing and submitting origination and disbursement records for processing.

Federal Student Aid, O&D To-Be Requirements 1-9 Introduction

Section 4: O&D Processing – provides the business requirements for the O&D System to cover the sub-processes and activities for the processing of origination, disbursement, and related financial transactions.

Section 5: O&D Results & Reporting – specifies the business requirements for the output activities resulting from O&D processing.

Section 6: Web Support Services – articulates the comprehensive web-based business requirements for both applicant and school stakeholders.

PART C: Operations Support

Section 7: Technical Operations Support – captures the business requirements for the technology management capabilities needed to ensure the efficient effective operations and management of the O&D technology environment.

Section 8: Program Management Office Support – describes the business requirements for human intervention, activities that support the effective execution of many of the key business processes within O&D, and System Security.

PART D: Customer Service

Section 9: Applicant Support Services – includes the business requirements for the customer service function which provides contact center support to applicants (students, parents, endorsers, and other authorized entities acting on their behalf).

Section 10: School Support Services – includes the business requirements for the customer service and technical help functions provided to schools, and other stakeholders working on their behalf, to support their participation in the origination and disbursement process.

APPENDICES:

Appendix A: Acronyms – list of acronyms used in the document.

Appendix B: Traceability Matrix to COD SOW – matching the COD Statement of Work (SOW, through Contract Modification 88) to this requirements document.

Appendix C: Compilation of Work Products, Deliverables, and Reports – a comprehensive list of all work products, deliverables, and reports required.

Appendix D: Key Performance Indicators and Current Service Levels – a reference of current service levels for key performance indicators.

Appendix E: Artifacts – a comprehensive list of documents and materials received and/or reviewed.

Appendix F: Recommended O&D Enhancements – a comprehensive list of all FSA recommended enhancements compiled through subject matter expert (SME) interviews and enhancement documentation.

Federal Student Aid, O&D To-Be Requirements 1-10 Introduction