Since June 2022, The Department of Education has separately become aware of non-compliance with limitations on the portion of an eligible academic program that can be provided by a third party.
On Wednesday (2/15), The Department of Education (ED) issued updated guidance seeking to provide clarity on what entities are considered third-party servicers. The Department’s updated guidance clarifies that Online Program Managers (OPMs) are considered third-party servicers and, as such, are subject to institutional reporting rules and annual third-party servicer audits.
ED’s updated guidance clarifies ED’s position that companies and other organizations that provide recruitment services, software products and services involving Title IV administration activities, or educational content and instruction for colleges fall into the category of a “third-party servicer.”
Institutions will have until May 1, 2023, to report any arrangements with third-party servicers that have not been reported to the Department, detail the services the entity performs on behalf of the institution, and disclose the timeframe of the agreement. Entities or individuals that meet the definition of a third-party servicer as a result of this Dear Colleague Letter are required to submit the Third-Party Servicer Data Form to the Department or update their existing form by May 1, 2023.
Any audits required of third-party servicers would not be needed for at least six months, with most servicers having significantly longer than that. At the same time, the Department will accept public comment on the guidance through the Regulations.gov website for 30 days (Docket ID ED-2022-OPE-0103).
If your institution is seeking help with these new updates or is in need of a third-party service, keep College Aid Services in mind. We are an audited third-party servicer with over 20+ years of experience and knowledge. Contact us here . We look forward to connecting with you soon.
Sources:
Updated third-party servicer guidance from Department of Education
Requirements and Responsibilities for Third-Party Servicers and Institutions (Updated Feb. 16, 2023)