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Invitation to Comment on Year 2000 Contingency Planning

PublicationDate: 11/25/98
Summary: Invitation to Comment on Year 2000 Contingency Planning
Author: ODAS - Office of the Deputy Assistant Secretary - SFA

Posted November 25, 1998

ED Electronic Announcement

Year 2000 Contingency Planning

Posted November 25, 1998

TO: Financial Aid Administrators, Business Officers, Lenders and
Guaranty Agencies, Third-party Servicers, and Software

From: Diane E. Rogers, Acting Chief Operating Officer,
Student Financial Assistance Programs

SUBJECT: Invitation to Comment on Year 2000 Contingency Planning

Dear Colleague:

We are confident that our Year 2000 (Y2K) renovations to the Department’s student aid data systems will be successful and on time. Nonetheless, we recognize the Department’s obligation to take the lead in establishing back-up procedures that could be utilized in the event a data system failure threatens to disrupt the delivery of student aid funds and services. We also recognize that the process for developing such back-up procedures must be collaborative with our student aid community partners. I would like to take this opportunity to update you on our activities in this "Y2K contingency planning" arena.

Student Aid Y2K Contingency Planning Process

I have appointed Bob Davidson, a senior executive with over 20 years of student aid policy, program development and budget experience, to lead our overall Y2K contingency planning effort. Also, we have established eight Department-wide SFA Contingency Planning (CP) Teams *1*, which areorganized around the following core student aid business processes:

1. Application Processing and Eligibility Reporting
2. Aid Origination and Disbursement
3. Enrollment Reporting and Tracking
4. Lender and Guarantor Payments
5. Repayment and Collection
6. Institutional Eligibility and Monitoring
7. Customer Service and Communications

Experienced senior managers of the student aid programs chair the CP Teams. Over the next several months, our CP teams will be working with KPMG Peat Marwick, a management-consulting firm with extensive experience in both student aid and business continuity planning, in developing and testing contingency plans and procedures. They will be following a rigorous and logical process laid out by the General Accounting Office (GAO) in its August 1998 guide,"Year 2000 Business Continuity Planning."*2*

The GAO guide defines several project phases. During our "Business Impact Analysis" phase, which we began in early October, each team is assessing the potential impact of data system failures on its respective business processes. Among other things, this analysis is currently: examining data exchanges with schools and other external partners, mapping the flow or information within those business processes, identifying potential Y2K-related system failure scenarios, and defining minimum acceptable levels of service.

During the "Contingency Planning" phase, which we expect to begin in late November, the CP Teams will identify and analyze the pros and cons of a range of contingency plans, procedures, and risk mitigation strategies, including the identification of needed waivers of law and regulations. This phase will include: performing cost-benefit and feasibility analyses of identified options, defining "trigger scenarios" that would activate contingency plans, establishing business resumption teams, developing detailed procedures for implementing the selected contingency options, and establishing criteria and time frames for resuming normal operations. By mid-February, we expect to have developed detailed contingency plans and procedures and to have secured staff and other needed resources for implementing the plans.

The final "Testing" phase will begin in mid-February. It will include: training the business resumption/testing teams, testing the contingency plans for feasibility, adjusting the plans and procedures as necessary, and rehearsing the contingency procedures. While this phase will continue throughout 1999 and into the year 2000, we plan to complete basic testing by the end of March 1999.

Community Involvement

Secretary Riley, Acting Deputy Secretary Mike Smith, and I attach great value to your collaboration in our student aid Y2K contingency planning process. As you know, every aspect of our student aid system is characterized by interdependence between this Department and its student aid community partners. The Y2K computer challenge certainly underlines this interdependence, while it also highlights the dramatic extent to which we have all become reliant on computer-based information systems.

We will post progress reports on our SFA contingency planning work on the Department’s website (see http:\ And we will seek your input and advice on key issues, including "minimum acceptable levels of service" (e.g., minimum time frames for delivering SAR and ISIR documents to students and schools), "trigger scenarios," and draft contingency plans for each business process area.

Also, we are currently working with the National Association of Student Financial Aid Administrators (NASFAA), the National Association of College and University Business Officers ( NACUBO), and other community organizations to develop appropriate ways for obtaining the views of schools, lenders, guarantors, third-party servicers, and other affected parties. We may, for example, hold focus "groups" of advisers from the interested communities during the next few months.

If you would like to recommend student aid business process contingency ideas for the consideration of our CP teams, or you would like to comment on our overall Y2K contingency planning approach, please contact:

Bob Davidson,
Director of Student Aid Contingency Planning,
Room 3060, ROB-3,
U.S. Department of Education
7th and D Streets, S.W.
Washington, D.C. 20202

Or e-mail your ideas and comments to Bob at:

We look forward to working with you on this most important endeavor.
*1* See Enclosure A: SFA Contingency Planning information sheet
*2* See Enclosure B: GAO document

Last Modified: 08/16/1999