1. Technology Developments
Karl Ross
Education Finance Council -
Technology Conference
May 5, 2003

2. Latest Developments COTS/ERP E-Sign
Authentication/Authorization/Security
XML/COD
Industry/USDE Standards
Real-Time Architectures
Customer Service Channel Expansion
Web Services/Meteor

3. Discussion Agenda Technology Trends Business Goals
Issues in Reaching Those Goals

4. Technology Trends Digital Everything Device Convergence Authentication
Integration
COTS
Speed

5. Technology Trends Digital Everything Device Convergence
Redefines “Data” in Data Exchange
Enables Data Processing
Device Convergence
Very little in our industry
Except - Integration with other services

6. Technology Trends Integration Solve the Competition Dilemma
Limit the need for mega-system projects
Faster delivery of functionality
COTS
Allows focus on real business
Simpler convergence / standard-setting
Third-party provider becomes “Customer”

7. Technology Trends Speed Authentication The ultimate enabler
Overcomes poor technology
Allows for better security
Authentication
Can do for the FAO what ATM did for the bank employee

8. Business Goals
Faster - All electronic, including error/exception handling
Better - Easier, Simpler, More Flexible
Cheaper - Little or no manual intervention, no paper!
The technology exists to support those goals
Choose Architectures that minimize critical path players,
and points of failure
Support standards - This will enable choice and support
the business goals

9. Old Architecture SCHOOL Student Guarantor LENDER U.S. Department
STATE GRANT
AND
SCHOLARSHIP
AGENCY
Guarantor
LENDER
INTERNAL
REVENUE
SERVICE
NATIONAL
COLLECTION
DIRECT LOAN
SERVICING AGENCY
FEDERAL RESERVE
ED OFFICE OF
CHIEF FINANCIAL
OFFICER
Bills
Loan applications and corrections
FFELP Consolidation Applications
Loan Payments
Defaulted
Loans
Loan and Portfolio Information
Loan Insurance Confirmation
Interest,
Special
Allowances
FISL
for
Consolidation
FFELP:
Defaulted Debt
Collection,
GA & Lender
Payments
PEPS:
School Title IV
eligibility,
Program Reviews,
Audits
NSLDS:
Student Loan Database,
Default Rates,
Enrollment Tracking
LSS:
Direct Loan
Servicing
CDS:
Accounting
LOS/LCS:
Origination and
PGR/FMS:
Pell Grant
Processing
CBS:
Campus Based
Program Processing
MDE:
Imaging &
Corrections
ISIR
Student Aid Reports
Financial Aid
Applications
FAFSA
Info
CPS:
Application
Pre-screening
Demographic
FFELP
Loan
AEA and
Reinsurance
Loan Info
Address Info
Repayments
Updated Loan
Direct Loan Info
Updated
Subsidiary
Ledger
Information
Drawdown
and Payment
Authorizations
Payment
Fund
Authorization
Promissory
Notes
Campus Based Applications
and
Disbursement Information
Direct Loan Origination Notices,
Disbursement Records &
Adjustments
Pell Grant Origination Notices,
Statements of Account
Perkins Loan Info
Financial Aid Transcripts,
Enrollment Information
Student Financial
Aid Reports
State
Grant
Award
Admission Application,
aid package acceptance
Financial aid, aid package,
admission package
Institutional Eligibility Applications
Defaulted Perkins Loans
FFEL Origination Records
FFEL Funds
Promissory Notes
Eligibility
School Info &
Default Rates
Lender and
GA Info
Direct
Booked
Loans &
Program Management and Oversight
Aid Repayment
Aid Origination and Disbursement
Aid Application
3/25/99
U.S. Department
of Education,
Office of Student
Financial Assistance
Programs

10. Architecture Goal User Internet State Capital Source Guarantor
Dept of Ed

11. How Do “We” Get There Standards Enabling Technologies XML Web Services
Transport Mechanisms
Standards
Industry-wide
Data, Description, Discovery
Transport, Network
Security

12. Standards Setting - The Key Process
Open
Learning from past disappointments
DCE, CORBA, Messaging, EDI
Universal
X is always X, Use existing standards when possible
Keep Data Standards Away from Transport Standards and Away from Architecture Standards
Governed
Single Entity, if possible
Solid Change Control

13. We Are Part Way There Common Record
Common Origination and Disbursement
Common Line
Common Account Maintenance
Common Claim Initiative

14. Common Record
Source - Dept. of Education

15. Interim Architecture - I
User
Internet
Pass-Through Data Aggregator (Gatekeeper)
State
Capital
Source
Guarantor
Dept of Ed

16. Interim Architecture - II
User
Internet
Data Aggregator + Major Business Contact
(Gatekeeper)
State
Capital
Source
Guarantor
Dept of Ed

17. Business Issues Legal Considerations Gatekeeper Issues Security
Human “Frailties”

18. Legal
GLB+
USA Patriot+
Privacy Laws
Wet Signatures
Indemnification

19. Gatekeeper Issues Adds Costs Adds Layer of Complexity
Restricts Competition
Not Faster, Cheaper - Better?
Security and Privacy Issues

20. Security Perceptions Can be More Important
With data at multiple sites and moving at light speed, can we avoid problems and liability?
Risk is the Key
Cannot have 100% Security
Risk = Probability of Occurrence X Cost of Occurrence

21. Human “Frailties”
Inability to Effectively Merge Business Goals with Technology
250 Meg/person/year Added Information
Need for Physical Accommodation
Device Size and Sound
Input Device Problems
“Need” for Hardcopy
Not 24X7 “Real Time”

22. Cautions DCE/CORBA/Java Death of the Legacy Systems
Last Mile Panaceas - CLECs/Cable
Network Applications - Client Server, N-Tier, Network Computers
TQM, ISO - “Management” Solutions

23. Cautions