In a blog post earlier this week, the Department of Education announced that the effective date of the Dear Colleague Letter GEN-23-03 which expands the definition of what is considered a Third-Party Servicer, will be postponed due to the feedback received.
The original date was February 15th and then it was pushed back to September 1st.
The Department stated: “We received significant and helpful feedback in the form of more than 1,000 comments. The careful review of these comments and consideration of any revisions to the guidance letter will take time. We know that many institutions and companies have already begun to analyze their contracts in anticipation of reporting and compliance deadlines, and we understand the concerns that can cause. We are therefore providing additional time for institutions and companies to come into compliance with the guidance. Specifically, we will delay the effective date of the guidance letter, and the September 1, 2023, date will no longer be in effect. The effective date of the revised final guidance letter will be at least six months after its publication, to allow institutions and companies to meet any reporting requirements. Deadlines for audit and contractual requirements will follow in fiscal years that begin after the effective date for the reporting requirements.”
In addition, the blog post clarifies activities that are not considered Third Party Servicer relationships.
“The Department does not consider contracts involving the following activities to constitute third-party servicer relationships:
- Study abroad programs.
- Recruitment of foreign students not eligible for Title IV aid.
- Clinical or externship opportunities that meet requirements under existing regulations because they are closely monitored by qualified personnel at an institution.
- Course-sharing consortia and arrangements between Title IV-eligible institutions to share employees to teach courses or process financial aid.
- Dual or concurrent enrollment programs provided through agreements with high schools and local education agencies, which are exempt because they do not involve students receiving Title IV aid.
- Local police departments helping to compile and analyze crime statistics, unless they write or file a report on behalf of an institution for compliance purposes.
- The Department will identify any other services that fall into this category as we review comments.”
If your institution is seeking help with these new updates or is in need of a third-party servicer, 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.
Source: Update on the Department of Education’s Third-Party Servicer Guidance