Publication Date: August 18, 2016
DCL ID: GEN-16-15
Subject: Third-Party Servicer Questions and Answers (Updated May 16, 2023)
Summary: This attachment to this letter provides guidance on issues related to third-party servicers and establishes a Questions and Answers link on the IFAP website.
Note
On May 16, 2023, we published Dear Colleague Letter GEN-23-08, which rescinded the guidance in the attachment to this Dear Colleague Letter prohibiting institutions from contracting with third-party servicers to perform any aspect of the institution’s participation in a Title IV program if the servicer (or its subcontractors) is located outside of the United States and/or is owned or operated by an individual who is not a U.S. citizen or national, or a lawful U.S. permanent resident. That guidance no longer applies. Please refer to Dear Colleague Letter GEN-23-08 for additional information.
Dear Colleague:
On January 9, 2015, the U.S. Department of Education (Department) published Dear Colleague Letter GEN 15-01, which addressed institutional responsibilities and requirements for those institutions of higher education that enter into contracts with third-party servicers. Dear Colleague Letter GEN 15-01 resulted in a number of questions submitted to the Department related to third-party servicer requirements.
The attachment to this letter provides additional guidance on issues related to third-party servicer requirements. These questions and answers provide clarification with regards to GEN 15-01 based on questions the Department has received, but does not make any changes to the regulations related to third-party servicers. This Dear Colleague Letter does not change or reverse any guidance provided in Dear Colleague Letter GEN 15-01, which is still in effect. Rather, this Dear Colleague Letter provides clarification on the guidance provided in that DCL.
In addition to these questions and answers, the Department would like to remind both institutions of higher education and third-party servicers that they are required to abide by the Family Educational Rights and Privacy Act (FERPA) regulations (20 U.S.C. § 1232g; 34 CFR Part 99).
For further information on third-party servicers, we encourage you to review the regulations at 34 C.F.R. § 668.2 (definition of third-party servicer); 34 C.F.R. §§ 668.23, 668.25; Dear Colleague Letters GEN 12-08, GEN 15-01.
Sincerely,
Lynn B. Mahaffie
Deputy Assistant Secretary for
Policy, Planning, and Innovation
Delegated the Duties of Assistant Secretary
for Postsecondary Education