20 U.S.C. § 1018
Performance-Based Organization for delivery of Federal student financial assistance
There is established in the Department a Performance-Based Organization (hereafter referred to as the “PBO”) which shall be a discrete management unit responsible for managing the administrative and oversight functions supporting the programs authorized under subchapter IV of this chapter, as specified in subsection (b).
The Secretary may allocate to the PBO such additional functions as the Secretary and the Chief Operating Officer determine are necessary or appropriate to achieve the purposes of the PBO.
Subject to paragraph (1), in carrying out its functions, the PBO shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions.
The PBO shall be subject to the usual and customary Federal audit procedures and to review by the Inspector General of the Department.
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.
Improving service to students and other participants in student financial aid programs authorized under under 1
Reducing the costs of administering those programs.
Improving and integrating the systems that support those programs.
Developing open, common, and integrated systems for programs authorized under under 1 subchapter IV.
Any other areas identified by the Secretary.
The management of the PBO shall be vested in a Chief Operating Officer who shall be appointed by the Secretary to a term of not less than 3 and not more than 5 years, and compensated without regard to chapters 33, 51, and 53 of title 5. The appointment shall be made on the basis of demonstrated management ability and expertise in information technology, including experience with financial systems, and without regard to political affiliation or activity.
The Secretary may reappoint the Chief Operating Officer to subsequent terms of not less than 3 and not more than 5 years, so long as the performance of the Chief Operating Officer, as set forth in the performance agreement described in paragraph (4), is satisfactory.
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.
Each year, the Chief Operating Officer and each senior manager appointed under this subsection shall enter into an annual performance agreement that sets forth measurable organization and individual goals. The agreement shall be subject to review and renegotiation at the end of each term.
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).
A senior manager shall be removable by the Chief Operating Officer, or by the Secretary if the position of Chief Operating Officer is vacant.
The Chief Operating Officer, in consultation with the Secretary, shall appoint a Student Loan Ombudsman to provide timely assistance to borrowers of loans made, insured, or guaranteed under subchapter IV by performing the functions described in paragraph (3).
The Chief Operating Officer shall disseminate information about the availability and functions of the Ombudsman to students, borrowers, and potential borrowers, as well as institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in those student loan programs.
Each year, the Ombudsman shall submit a report to the Chief Operating Officer, for inclusion in the annual report under subsection (c)(2), that describes the activities, and evaluates the effectiveness of the Ombudsman during the preceding year.
The PBO shall not be subject to any ceiling relating to the number or grade of employees.
The Chief Operating Officer shall work with the Office of Personnel Management to develop and implement personnel flexibilities in staffing, classification, and pay that meet the needs of the PBO, subject to compliance with title 5.
The Chief Operating Officer may appoint, without regard to the provisions of title 5 governing appointments in the competitive service, technical and professional employees to administer the functions of the PBO. These employees 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.
The PBO shall establish an annual performance management system, subject to compliance with title 5, and consistent with applicable provisions of law and regulations, which strengthens the effectiveness of the PBO by providing for establishing goals or objectives for individual, group, or organizational performance (or any combination thereof), consistent with the performance plan of the PBO and its performance planning procedures, including those established under the Government Performance and Results Act of 1993, and communicating such goals or objectives to employees.
The Secretary shall allocate from funds made available under section 1087h of this title such funds as are appropriate to the functions assumed by the PBO. In addition, there are authorized to be appropriated such sums as may be necessary to carry out the purposes of this part.
The Chief Financial Officers Act of 1990, referred to in subsec. (c)(2)(B), is Pub. L. 101–576,
The Government Performance and Results Act of 1993, referred to in subsecs. (c)(2)(B) and (h), is Pub. L. 103–62,
A prior section 1018, Pub. L. 89–329, title I, § 141, as added Pub. L. 100–418, title VI, § 6201,
Another prior section 1018, Pub. L. 89–329, title I, § 118, as added Pub. L. 96–374, title I, § 101(a),
2020—Subsec. (b)(2)(C). Pub. L. 116–251 added subpar. (C).
2009—Subsec. (c)(3). Pub. L. 111–39, § 101(b)(5)(A), substituted “under subchapter IV” for “under this subchapter” in introductory provisions.
Subsec. (d)(3). Pub. L. 111–39, § 101(b)(5)(B), substituted “authorizing committees” for “appropriate committees of Congress” in concluding provisions.
2008—Subsec. (a)(1). Pub. L. 110–315, § 117(1)(A), substituted “administrative and oversight” for “operational”.
Subsec. (a)(2)(D). Pub. L. 110–315, § 117(1)(B), substituted “and administration” for “of the operational functions”.
Subsec. (b)(1)(A). Pub. L. 110–315, § 117(2)(A)(i), substituted “the Federal student financial assistance programs authorized under subchapter IV” for “the information systems administered by the PBO, and other functions performed by the PBO”.
Subsec. (b)(1)(C). Pub. L. 110–315, § 117(2)(A)(ii), added subpar. (C) and struck out former subpar. (C) which read as follows: “assist the Chief Operating Officer in identifying goals for the administration and modernization of the delivery system for student financial assistance under subchapter IV.”
Subsec. (b)(2). Pub. L. 110–315, § 117(2)(B)(i), in introductory provisions, substituted “the administration of Federal” for “administration of the information and financial systems that support” and “subchapter IV” for “this subchapter”.
Subsec. (b)(2)(A). Pub. L. 110–315, § 117(2)(B)(ii)(I), substituted “for the Federal student financial assistance programs authorized under subchapter IV” for “of the delivery system for Federal student assistance” in introductory provisions.
Subsec. (b)(2)(A)(i), (ii). Pub. L. 110–315, § 117(2)(B)(ii)(II), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows:
“(i) the collection, processing and transmission of applicant data to students, institutions and authorized third parties, as provided for in section 1090 of this title;
“(ii) design and technical specifications for software development and systems supporting the delivery of student financial assistance under subchapter IV;”.
Subsec. (b)(2)(A)(iii). Pub. L. 110–315, § 117(2)(B)(ii)(III), substituted “administration” for “delivery”.
Subsec. (b)(2)(A)(iv). Pub. L. 110–315, § 117(2)(B)(ii)(IV), inserted “the Federal” after “supporting”, substituted “authorized under subchapter IV” for “under this subchapter”, and struck out “and” after the semicolon.
Subsec. (b)(2)(A)(v). Pub. L. 110–315, § 117(2)(B)(ii)(V), substituted “the administration of the Federal student financial assistance programs authorized under subchapter IV; and” for “systems that support those programs.”
Subsec. (b)(2)(A)(vi). Pub. L. 110–315, § 117(2)(B)(ii)(VI), added cl. (vi).
Subsec. (b)(2)(B). Pub. L. 110–315, § 117(2)(B)(iii), substituted “activities and functions” for “operations and services”.
Subsec. (c). Pub. L. 110–315, § 117(3)(A), substituted “Performance plan, report, and briefing” for “Performance plan and report” in heading.
Subsec. (c)(1)(C)(i). Pub. L. 110–315, § 117(3)(B)(i), substituted “under subchapter IV” for “this subchapter”.
Subsec. (c)(1)(C)(iii). Pub. L. 110–315, § 117(3)(B)(ii), struck out “information and delivery” after “integrating the”.
Subsec. (c)(1)(C)(iv). Pub. L. 110–315, § 117(3)(B)(i), (iii), substituted “Developing” for “Developing an”, “systems” for “delivery and information system”, and “under subchapter IV” for “this subchapter”.
Subsec. (c)(2)(A). Pub. L. 110–315, § 117(3)(C)(i), inserted “the” after “PBO and”.
Subsec. (c)(2)(B). Pub. L. 110–315, § 117(3)(C)(ii), substituted “Officers” for “Officer”.
Subsec. (c)(3). Pub. L. 110–315, § 117(3)(D), inserted “students,” after “consult with” in introductory provisions.
Subsec. (c)(4). Pub. L. 110–315, § 117(3)(E), added par. (4).
Subsec. (d)(1). Pub. L. 110–315, § 117(4)(A), struck out after first sentence “The Secretary shall appoint the Chief Operating Officer within 6 months after
Subsec. (d)(4)(B). Pub. L. 110–315, § 103(b)(2), substituted “authorizing committees” for “Committee on Education and the Workforce of the House of Representatives and the Committee on Labor and Human Resources of the Senate”.
Subsec. (d)(5)(B). Pub. L. 110–315, § 117(4)(B)(i), substituted “paragraph (4)” for “paragraph (2)”.
Subsec. (d)(5)(C). Pub. L. 110–315, § 117(4)(B)(ii), struck out “this” before “subparagraph (B)”.
Subsec. (f)(2). Pub. L. 110–315, § 117(5)(A), substituted “to students, borrowers,” for “to borrowers”.
Subsec. (f)(3)(A). Pub. L. 110–315, § 117(5)(B), substituted “paragraph (1);” for “paragraph (1)(A);”.
Subsec. (g)(3). Pub. L. 110–315, § 117(6), struck out “not more than 25” before “technical and professional employees”.
Subsec. (h). Pub. L. 110–315, § 117(7), substituted “effectiveness” for “organizational effectiveness”.
Subsecs. (i), (j). Pub. L. 110–315, § 117(8)–(10), redesignated subsec. (j) as (i), struck out “, including transition costs” before period at end, and struck out former subsec. (i). Text of former subsec. (i) read as follows: “The Secretary and the Chief Operating Officer, not later than 180 days after
Pub. L. 116–251, § 6,
Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (
Pub. L. 105–244, title VIII, § 801,