Statement by Secretary Spellings on Departure of Terri Shaw

U.S. Secretary of Education Margaret Spellings announced today that Terri Shaw, Chief Operating Officer of Federal Student Aid (FSA), will be leaving the U.S. Department of Education on June 1, 2007, after nearly five years of service to the federal government. Shaw began her term as the second chief operating officer in September 2002.

Shaw communicated to Secretary Spellings in late February 2007 that she planned to leave the Department; she agreed at that time to continue in her role until June 1, 2007.

“As head of Federal Student Aid, Terri has been a tireless advocate for students and families,” said Secretary Spellings. “Her leadership and depth of experience will be sorely missed. She made performance and results a top priority, establishing performance standards, metrics and reporting at every level. FSA now delivers more aid to more students at a lower operating cost with greater accuracy than at any point in its history.”

While at the Department, Shaw assembled an impressive senior management team with extensive experience in the private sector, higher education community and government. As a result of their hard work, the student aid programs were removed from the GAO High-Risk designation list after 15 years in January 2005. Additionally, Shaw institutionalized sound financial management and internal controls at every level, achieving unqualified audit opinions on FSA’s financial statements for the past five fiscal years. Under her leadership, FSA continued to reduce the default portion of the student loan portfolio by nearly 40 percent since FY2000, at the same time that the overall outstanding student loan portfolio doubled. Over 96 percent of all Free Applications for Federal Student Aid (FAFSA) are now completed electronically.

Congress designated FSA as the federal government’s first Performance-Based Organization (PBO) in the Higher Education Amendments of 1998. Under the authority of the PBO, the Secretary appoints a chief operating officer to oversee the organization. The Department will announce prior to June 1 who will be stepping into the role of acting COO effective June 1, 2007.