Federal Education Division May Be Shrinking

Melissa Maichle California, Financial Aid Industry News, FL, MA, NY, PA

The largest division of the Department of Education may soon no longer hold that title if some of the workers there accept an employment proposition extended to them.  Some of the Office of Federal Student Aid’s (OFSA) 1300 employees have been offered buyouts, although the exact amount of potential employees impacted has yet to be made clear.  The packages extended include early retirement as well as voluntary leave.  Labeled as a “separation incentive”, the amounts include a lump sum payment up to $25,000 that is subject to taxes.  Employees who accept the offer cannot work for the federal government again for five years or they would be required to pay back the buyout that was received.

OFSA is responsible for many aspects that education professionals such as college financial aid administrators and auditors utilize to function in their daily roles.  Areas the branch oversees include the Information for Financial Aid Professional (IFAP) website along with student-centric sites like the federal landing page for Direct Loans.  With less help available within the division, some industry watchdogs worry that certain aspects that OFSA oversees could suffer in the long run due to the lack of employee resources.

The Trump administration signed an executive order in March that included eliminating certain aspects of federal agencies that were deemed unnecessary as a cost saving measure.  “Within 180 days of the date of this order, the head of each agency shall submit to the Director a proposed plan to reorganize the agency, if appropriate, in order to improve the efficiency, effectiveness, and accountability of that agency.” Time will tell how many federal ED employees within OFSA accept the offer and how that will impact college financial aid offices.