In the course of its investigative and oversight activities, Federal Student Aid (FSA) has learned that former employees of some postsecondary institutions believe they are prohibited from, or limited in, communicating with FSA about aspects of their jobs related to the Title IV programs because they signed nondisclosure agreements (NDAs) with their former employers. NDAs include confidentiality clauses, non-disparagement clauses, and any other language that limit the ability of an institution’s personnel from discussing their employment, regardless of whether the language is contained inside of an employment contract, settlement agreement, separation and release agreement, proprietary rights agreement, or in a stand-alone nondisclosure agreement. FSA notified those institutions that, despite any NDA provision, their former employees and other personnel are legally able to communicate with the U.S. Department of Education (Department) about any matter associated with their institutions’ administration of the Title IV programs. FSA noted that any prohibition or limitation on personnel’s ability to do so would violate 34 C.F.R. § 668.24(f). FSA is sharing this information publicly to ensure a consistent understanding among participating institutions.
By signing a Program Participation Agreement (PPA), institutions agree to comply with the Title IV regulations. 34 C.F.R. § 668.24(f) requires institutions and their third-party servicers to cooperate with the Department regarding audits, investigations, program reviews, or other reviews authorized by law. According to 34 C.F.R. § 668.24(f)(2)(ii), such cooperation includes “providing reasonable access to personnel associated with the institution’s or servicer’s administration of the Title IV, HEA programs for the purpose of obtaining relevant information.” Using NDAs that prevent personnel from communicating with the Department about the administration of the Title IV programs violate the requirement to cooperate with the Department. FSA considers it to be an institution’s responsibility to comply with this requirement and ensure any NDAs make clear that personnel, including current and former employees, are legally able to communicate with the Department. Institutions and third-party servicers that do not comply with the Title IV regulations could face administrative action.
FSA is also aware that, even when an NDA does not explicitly prohibit communication, some provisions may improperly create the appearance or perception that personnel are limited in their legal ability to communicate with the Department in violation of the institution’s responsibilities under 34 C.F.R. § 668.24(f). An example is a provision stating that personnel are only able to communicate about the institution to report “possible violations of any law, rule or regulation to any governmental agency or entity charged with enforcement of any law, rule or regulation” or “other disclosures that are protected under whistleblower provisions of any law, rule or regulation.” Because the language appears to limit the scope of what may be disclosed, personnel may interpret that language to prohibit their communication more broadly with the Department–i.e., personnel would have to make a judgment that the communication was to report a violation or subject to whistleblower laws. By restricting personnel in that way, the language fails to explicitly permit communications of any kind with the Department about any subject associated with the administration of the Title IV programs. These types of provisions would not provide reasonable access to personnel required by 34 C.F.R. § 668.24(f).
FSA’s Office of Enforcement welcomes and encourages information from current and former employees, vendors, and contractors of postsecondary institutions, third-party servicers, third party lead generators, students, or any other relevant individual about potential violations of Title IV programs, including concerns about NDAs that may violate the Title IV regulations. Knowledgeable sources with information about potential violations may submit relevant tips and information by visiting Ed.gov/FSATips or emailing FSATips@ed.gov.