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Business and Policy Areas
Business and Policy Areas
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ED Reminds Schools About Third-Party Servicer Requirements

January 23, 2015

The Department of Education began the new year with a reminder to schools about properly reporting contracts with any third-party that provides services related to administering Title IV student aid programs. The "Dear Colleague Letter" (GEN-15-01) warns institutions that the name of any individual or entity providing such services must be reported through the Application for Approval to Participate in the Federal Student Financial Aid Programs (E-App) process within 10 days of entering into a new contract or modifying or terminating an existing contract.

The letter details the types of services that trigger third-party servicer status for Title IV purposes and cautions institutions about requirements related to privacy protections under the Family Education Rights and Privacy Act and data security concerns under the Gramm-Leach-Bliley Act. Third-party servicers also are required to undergo compliance audits.

ED issued a similar letter three years ago, indicating that failure to comply with these requirements was a concern.

Contact

Anne Gross
Vice President, Regulatory Affairs
202.861.2544
E-mail

Bryan Dickson
Senior Policy Analyst
202.861.2505
E-mail