U.S. Ed Dept issues guidance on third-party student aid servicers
- 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.
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.
- U.S. Department of Education Third-Party Servicer Institutional Requirements and Responsibilities
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