Journey Towards Implementing Enterprise Risk Management at Federal Student Aid Cynthia Vitters | Director Department of Education – Federal Student Aid

Federal Student Aid (FSA) Overview  FSA is a principal office of the United States Department of Education responsible for administering the federal Title IV student loan portfolio  In FY14, FSA operated on an annual administrative budget of approximately $1.4B  Current outstanding loan portfolio is over $1.1T  FSA is staffed by over 1,200 full-time employees and augmented by thousands of contractors and vendors  Workforce is based in Washington, D.C., with ten regional offices located throughout the country  FSA was designated as the Federal government’s first Performance-Based Organization (PBO) in

History of ERM at FSA Established an ERM Framework in 2004 COSO-Based Framework First Formally Appointed Chief Risk Officer in the Federal Government First Formally Established Enterprise Risk Management Office in the Federal Government Expanded FSA’s ERM Framework in 2010 Expanded Risk Management Office Structure Formalized Risk Management Committee/Meetings to Include Operating Committee Members Our Mission is to Proactively Identify, Assess, and Report Enterprise- Level Risks, and to Collaboratively Manage those Risks with FSA Executives, in Order to Support the FSA Enterprise in Achieving its Objectives 3

Risk Management Office Structure -Then Enterprise Performance Management Services Group Project Management & Oversight Group Enterprise Risk Management Group (Chief Risk Officer) Chief Operating Officer Acquisitions Group Strategic Planning & Reporting Group Risk Analysis & Reporting Internal Review 4

Risk Management Office Structure -Now Audit Liaison Group Risk Management Office (Chief Risk Officer) Internal Review Division Risk Analysis & Reporting Division Chief of Staff Chief Operating Officer 5

VII. Monitoring VI. Information & Communication - Key Management Report Monitoring V. Control Activities IV. Risk Response -Risk Mitigation, Risk Transfer/Sharing, Avoidance III. Risk Assessment -Alignment of Assurance & Oversight Functions II. Event Identification - Business Unit Facilitated Risk Assessment - Issues Identification & Independent Validation Process I. Control Environment - Understanding end-to-end process (inclusive of relationships with schools, vendors, GAs) FSA’s Customized COSO-Based ERM Framework -Issues Resolution / Continuous -Executive Dashboard -Alignment of All Internal Risk / Compliance Oversight Note: Ongoing objective setting embedded in overall process. 6