Education exec faces tough tasks

"Student aid on the Web"

Terri Shaw has a tough job as chief operating officer at the Education Department's Federal Student Aid (FSA) office. The office distributes $68 billion a year in Title IV financial assistance using antiquated information systems in need of modernization.

FSA has been criticized in the past for failing to prevent waste, fraud and abuse. But under Shaw, who took over as chief operating officer two years ago, the office's reputation has improved. "I have to give her the highest marks for what she has managed to accomplish thus far," said Barmak Nassirian, associate executive director for external relations at the American Association of Collegiate Registrars and Admissions Officers.

Nassirian said Shaw's job is a Rube Goldberg concoction that requires her to not only manage federal programs worth billions of dollars but also "interact with millions of citizens as well as thousands of banks and dozens of other intermediaries."

Shaw succeeded Greg Woods, who held the position before his death in November 2002. "Her predecessor was our brightest hope, and he died young," Nassirian said. "The loss of Greg Woods was devastating. But the fact that somebody followed him who was really committed to staying and making this a better place was at least a little bit of solace."

In addition to distributing federal grants and loans to help students pay for higher education, FSA officials oversee a $342 billion portfolio, which includes loans from private providers.

Among Shaw's accomplishments are two successive clean financial audits, the first in many years for the office. "We fully expect to get our third clean audit, not only FSA but the department," she said.

But Shaw won't crow about it. "We should always get clean audits," she said. "It shouldn't be a special thing .... You've got to be able to reconcile your books and count your money."

Two years ago, FSA and Education officials installed new financial management systems, which have helped, Shaw said. The next step is to integrate those systems. "That's a multiyear process that we're just starting on," she said.

Her greatest wish, she said, is to have Government Accountability Office officials remove FSA's programs from GAO's high-risk list, where they have been since 1990.

"We're pretty confident when they issue the update to the high-risk series at the end of this year or early January [2005], that the programs will no longer be on that list," Shaw said. "That will be a really wonderful day for the department and everybody who participates in the programs."

Shaw, who is widely regarded as a good manager, said she disagrees with people who say creating a culture of accountability in a bureaucracy is difficult. "It's pretty simple," she said. "People are accountable when you're clear about what is expected. People are accountable when you ask them for their opinion and involve them."

FSA was the first office within the federal government to be designated a performance-based organization under a law enacted in 1998. That meant the office was under extra scrutiny to ensure the integrity of its programs, reduce administrative costs and improve customer service.

Customer service, Shaw said, was an unfamiliar concept to FSA employees when the law was enacted. "Who is the customer?" she asked. "In our case, it's pretty simple. We serve students and parents."