20 U.S.C. § 1018 — Performance-Based Organization for delivery of Federal student financial assistance

to improve service to students and other participants in the student financial assistance programs authorized under subchapter IV, including making those programs more understandable to students and their parents;

to reduce the costs of administering those programs;

to increase the accountability of the officials responsible for administering the operational aspects of these programs;

to provide greater flexibility in the management and administration of the Federal student financial assistance programs;

to integrate the information systems supporting the Federal student financial assistance programs;

to implement an open, common, integrated system for the delivery of student financial assistance under subchapter IV; and

to develop and maintain a student financial assistance system that contains complete, accurate, and timely data to ensure program integrity.

request the advice of, and work in cooperation with, the Chief Operating Officer in developing regulations, policies, administrative guidance, or procedures affecting the Federal student financial assistance programs authorized under subchapter IV;

request cost estimates from the Chief Operating Officer for system changes required by specific policies proposed by the Secretary; and

assist the Chief Operating Officer in identifying goals for—

The administrative, accounting, and financial management functions for the Federal student financial assistance programs authorized under subchapter IV, including—

Annual development of a budget for the activities and functions of the PBO, in consultation with the Secretary, and for consideration and inclusion in the Department’s annual budget submission.

Taking action to prevent and address the improper use of access devices, as described in section 1092b(d)(7) of this title, including by—

The Secretary and the Chief Operating Officer shall consult concerning the effects of policy, market, or other changes on the ability of the PBO to achieve the goals and objectives established in the performance plan described in subsection (c).

The Secretary and the Chief Operating Officer may revise the annual performance agreement described in subsection (d)(4) in light of policy, market, or other changes that occur after the Secretary and the Chief Operating Officer enter into the agreement.

Each year, the Secretary and Chief Operating Officer shall agree on, and make available to the public, a performance plan for the PBO for the succeeding 5 years that establishes measurable goals and objectives for the organization.

In developing the 5-year performance plan and any revision to the plan, the Secretary and the Chief Operating Officer shall consult with students, institutions of higher education, Congress, lenders, the Advisory Committee on Student Financial Assistance, and other interested parties not less than 30 days prior to the implementation of the performance plan or revision.

The plan shall include a concise statement of the goals for a modernized system for the delivery of student financial assistance under subchapter IV and identify action steps necessary to achieve such goals. The plan shall address the PBO’s responsibilities in the following areas:

An independent financial audit of the expenditures of both the PBO and the programs administered by the PBO.

Financial and performance requirements applicable to the PBO under the Chief Financial Officers Act of 1990 and the Government Performance and Results Act of 1993.

The results achieved by the PBO during the year relative to the goals established in the organization’s performance plan.

The evaluation rating of the performance of the Chief Operating Officer and senior managers under subsections (d)(4) and (e)(2), including the amounts of bonus compensation awarded to these individuals.

Recommendations for legislative and regulatory changes to improve service to students and their families, and to improve program efficiency and integrity.

Other such information as the Director of the Office of Management and Budget shall prescribe for performance based organizations.

regarding the degree of satisfaction with the delivery system; and

to seek suggestions on means to improve the delivery system.

the integrity of the student loan programs; and

that lenders and guaranty agencies are adhering to the requirements of subchapter IV.

the President; or

the Secretary, for misconduct or failure to meet performance goals set forth in the performance agreement in paragraph (4).

Each year, the Secretary and the Chief Operating Officer shall enter into an annual performance agreement, that shall set forth measurable organization and individual goals for the Chief Operating Officer.

The final agreement, and any revision to the final agreement, shall be transmitted to the authorizing committees, and made publicly available.

The Chief Operating Officer is authorized to be paid at an annual rate of basic pay not to exceed the maximum rate of basic pay for the Senior Executive Service under section 5382 of title 5, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(B) of such title. The compensation of the Chief Operating Officer shall be considered for purposes of section 207(c)(2)(A) of title 18 to be the equivalent of that described under clause (ii) of section 207(c)(2)(A) of such title.

In addition, the Chief Operating Officer may receive a bonus in an amount that does not exceed 50 percent of such annual rate of basic pay, based upon the Secretary’s evaluation of the Chief Operating Officer’s performance in relation to the goals set forth in the performance agreement described in paragraph (4).

Payment of a bonus under subparagraph (B) may be made to the Chief Operating Officer only to the extent that such payment does not cause the Chief Operating Officer’s total aggregate compensation in a calendar year to equal or exceed the amount of the President’s salary under section 102 of title 3.

The Chief Operating Officer may appoint such senior managers as that officer determines necessary without regard to the provisions of title 5 governing appointments in the competitive service.

The senior managers described in subparagraph (A) may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates.

A senior manager appointed under this subsection may be paid at an annual rate of basic pay of not more than the maximum rate of basic pay for the Senior Executive Service under section 5382 of title 5, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of such title. The compensation of a senior manager shall be considered for purposes of section 207(c)(2)(A) of title 18 to be the equivalent of that described under clause (ii) of section 207(c)(2)(A) of such title.

In addition, a senior manager may receive a bonus in an amount such that the manager’s total annual compensation does not exceed 125 percent of the maximum rate of basic pay for the Senior Executive Service, including any applicable locality-based comparability payment, based upon the Chief Operating Officer’s evaluation of the manager’s performance in relation to the goals set forth in the performance agreement described in paragraph (2).

in accordance with regulations of the Secretary, receive, review, and attempt to resolve informally complaints from borrowers of loans described in paragraph (1), including, as appropriate, attempts to resolve such complaints within the Department of Education and with institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in the loan programs described in paragraph (1); and

compile and analyze data on borrower complaints and make appropriate recommendations.