The US Department of Education caused quite a stir recently with its recently published Dear Colleague letter related to Title IV programs. Title IV programs are all those that have been certified to meet certain standards and thus can get federal funding for its students. Being Title IV certified is essentially mandated if the institution wants to stay in business. In this letter, they issued guidance
“to clarify that entities performing the functions of student recruiting and retention, the provision of software products and services involving Title IV administration activities, and the provision of educational content and instruction are defined as third-party servicers.”
The bottom line of this expanded definition of what constitutes a TPS is that the college and the third party would be joint and severally liable for any violations that occur.
The clarified and expanded definition is targeted at online program managers (OPMs) specifically but includes other organizations that provide services related to the following:
- Student recruitment and related activities
- Student and institutional eligibility related to Title IV
- Preparing or obtaining data for required disclosures required by the Title IV regulations
- Prevention of defaults on student loans
- Delivery and management of Title IV funds
- Software and services (that maintain records related to Title IV) that the TPS has access to and maintains control over
- Keeping students enrolled, including monitoring engagement and attendance or responding to student inquiries related to maintaining aid eligibility
- Providing instructional content, evaluating student learning, or developing curricula or course materials “unless the institution maintains full control of the curriculum/materials and delivers the instruction itself.”
- Consulting with or auditing of the college’s operations related to financial aid or other Title IV administration activities.
- Federal Perkins Loan servicing or collection.
Basically, if your college uses or if your organization provides services provided by third parties that fit into the list above, then you should immediately start gathering information that you will need to report to the DoE by May 1, 2023. This guidance is effective immediately. Once this information has been gathered, then the college must ensure that
- All TPS contracts include terms that the DoE requires, All TPSs have submitted signed forms that certify that they meet the appropriate requirements, and
- They have fulfilled data-reporting guidelines.
On the other side of the contract, the TPS must do the following:
- Ensure that their contracts are in compliance,
- Submit or update their data with the DoE, and
- Meet annual audit requirements.
In addition, to reiterate, both the college and the TPS will be joint and severally liable related to Tile IV activities, data privacy requirements, and reporting requirements.
The assumption is that the expanded definition and this clarity about liability should lead to greater oversight by the college and/or bringing functions back into the institution itself (for more thorough oversight).
