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Managing Risk and Performance: A Guide for Government Decision Makers by Douglas W. Webster, Thomas Stanton

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Chapter 7

Implementation of Enterprise Risk Management at the Office of Federal Student Aid of the U.S. Department of Education

Fred Anderson

Chief Risk Officer, Federal Student Aid

Cynthia Jaspers Vitters1

Director, Risk Analysis & Reporting Group, Federal Student Aid

This chapter discusses FSA's journey in implementing the first formalized ERM framework in a U.S. federal government organization. Specifically, this chapter documents the steps taken during the initial implementation of the ERM framework and highlights some of the significant challenges FSA faces. The chapter then addresses how FSA's change in business model necessitated an expansion of the ERM program and documents key considerations and notable challenges that the new Risk Management Committee, the Risk Management Office, and the organization overall faced during this expansion process. The largest challenge is to ensure a continuous “connecting of the dots” for what is now a well over $1 trillion federal student loan program with nearly 40 million borrowers.

The enterprise risk management program at the Office of Federal Student Aid (FSA) has been in various stages of development and implementation for nearly a decade. FSA's ERM effort is believed to have been the first enterprise-wide ERM implementation in the federal government that spans all key business processes. The ERM implementation effort is supported by a dedicated and formally recognized Risk Management Office led by a chief risk officer (CRO). Accordingly, ...

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