Dive Brief:
- New guidance issued by the U.S. Department of Education on Friday details how higher ed institutions should report deals with student aid contractors.
- The "Dear Colleague" letter is meant to clarify guidelines for reporting those relationships, with the department noting confusion over who is to be reported as a third-party servicer.
- Many institutions were not reporting these deals, per a December post from the National Association of Student Financial Aid Administrators.
Dive Insight:
The new guidance deals with companies contracted by higher ed institutions to handle financial aid disbursement and application processing, and a survey is said to be in the works to shed light on deals that haven't been reported.
Per the guidance, the following tasks do not count as third-party servicer relationships: publishing, providing, and administering ability-to-benefit tests; financial and compliance auditing, including preparation of financial statements; mailing of documents prepared by the institution; warehousing of records; and providing computer services or software as long as the provider is not responsible for using the software for the institution’s student aid purposes.