ACE, OTHER GROUPS SEND COMMENTS TO ED ON THIRD-PARTY SERVICERS GUIDANCE
April 3,2023
On behalf of more than 80 other higher education organizations, ACE sent comments March 29 to the Department of Education (ED) about the guidance on third-party servicers (TPS) that ED released in February.
The comment letter outlines the full range of problems and harmful consequences the guidance presents for colleges and universities and their students because of its “expansive new definition” of TPS, and calls on ED to rescind the current Dear Colleague Letter (DCL) that contains the new guidance.
The department should then “identify alternate approaches that are better targeted to the issues of concern that the Department seeks to address,” the organizations say in the letter. “Rescinding the guidance will allow time for the Department to carefully craft its next steps while minimizing the legal uncertainty and compliance challenges facing institutions under the DCL, particularly with respect to relationships with study abroad programs and other international entities that are unable to meet TPS requirements.”
The department first issued the DCL on Feb. 15, dramatically expanding the definition of TPS by increasing the functions and activities that, if performed for an institution by an outside entity, would subject that entity to TPS requirements. This is a significant change to attempt through subregulatory guidance, and one that appears to exceed the department’s authority.
