Loren Thompson - Education Department's Untimely Shift To Fragmented IT System Is Putting Student Loans At Risk

Shakespeare warns us in Julius Caesar that the bad things men do outlive them, whereas "the good is oft interred with their bones."  The same thing seems to be true of presidencies: when an administration makes mistakes, the consequences can live on for decades.

The Bard's observation seems all too apt in the case of the U.S. Department of Education, which is gearing up to implement a misguided transformation of its information systems at the height of the student loan season that could prevent thousands of prospective students from ever studying Shakespeare in college.  The new approach was cobbled together during the closing days of the Obama administration, but it is the Trump administration that will be blamed when the system seizes up and loan applicants start complaining.

Here's the problem in a nutshell. Obama's appointees decided last year that rather than continuing a ten-year arrangement in which a single outside contractor provides all the department's IT services -- desktops, laptops, cell phones, networks, etc. -- they would break it up into half a dozen separate contracts and have the department's in-house IT shop manage the resulting system.

Much of the Education Department's budget is allocated to student loans and grants. Without a smoothly functioning information system, though, the department can't function. (Wikimedia)

Much of the Education Department's budget is allocated to student loans and grants. Without a smoothly functioning information system, though, the department can't function. (Wikimedia)

It isn't so obvious why this was deemed desirable since the existing system works fine and awarding multiple small contracts to diverse suppliers will raise the overall cost by 50%.  Part of the appeal may have been a desire to assign contracts for services like printing to "economically disadvantaged" small businesses.  But because the old arrangement expires in November, the transition to a much more complicated new system must unfold this summer -- while millions of prospective students are applying for loans from the department.

As if all that were not enough, the department is simultaneously managing a migration of its data centers from one contractor to another.  The information stored by these data centers is essential in processing student loan applications, and the shift does not appear to be unfolding smoothly.  Now the department will have to migrate a lot of other assets such as help desks and disaster recovery centers embedded in contractor facilities to new sites at the same time.

Having relied for a decade on outsiders to supply most of its information services, the Education Department's in-house IT shop probably is under-resourced to manage two major system migrations simultaneously.  After all, the department's budget has been capped since 2012.  The Navy is contemplating a similarly misguided plan to break up its global intranet -- the world's biggest -- into separately competed segments with the government serving as system integrator, and that plan too is a disaster waiting to happen.

The acronym for the new system at the Education Department is PIVOT, which stands for Portfolio of Integrated Value-Oriented Technologies.  The name says it all -- typical IT gobbledygook that obscures the challenges of implementing such a radical shift.  The new approach might more accurately be described as a portfolio of dis-integrated technologies, but that wouldn't have lent itself to fashioning a cool acronym.  On the other hand, it might have more accurately captured what lies in store for loan applicants this summer.

Like the boneheaded decision of IRS to take down a data retrieval tool that is critical to millions of student loan recipients in recertifying their borrowing status, the Education Department's move seems to ignore the needs of those who depend on timely, accurate information to get the training they need for a successful career.  IT appears to bring out the worst features of bureaucratic behavior.  For instance, the Air Force has hired thousands of software engineers because it is convinced it can write code more efficiently than tech companies.

Whatever the motivation may be for such misguided initiatives, it is the nation's political leaders who invariably get blamed when things go wrong -- especially the president.  So Secretary of Education Betsy DeVos might want to take some time for a briefing on PIVOT before the student loan system goes haywire on her watch.  If there's a good reason for taking all the risks associated with the new approach at the height of the student loan season, she ought to know what it is.  If there isn't, the program needs to be rethought before the debacle begins.

NTT Data, the incumbent on the legacy IT system, is a modest contributor to my think tank.  Several other contributors may be competing for work in the new system.