Phil Hill
October 23, 2023
Let’s get to the point before the context and rationale. The US Department of Education (ED) will not release new third-party servicer (TPS) guidance this year, and I believe ED will not release it next year, either, due to the election. In short, TPS expansion at the federal level is no more.
Context
I gave an abbreviated history in yesterday’s premium post.
For new readers, in February the US Department of Education (ED) released new guidance to dramatically expand the definition of a TPS entity to essentially capture most all of EdTech. Higher Ed Institutions (HEIs) have to report all TPS contracts, and TPS entities must be audited and have additional limitations. That TPS guidance (through a Dear Colleague Letter, or DCL) would have dramatically expanded the bureaucratic burden for HEIs, most likely put many EdTech vendors out of business, and in essence federalized the EdTech industry.
This move stirred the hornet’s nest, and nearly all of the higher ed community not only protested the guidance but also pointed out that it would not solve any real problems. Fewer than 1% of public comments supported the TPS expansion, and the majority of those supporting the move were think tanks / activist groups sharing a common funding source of the Arnold Ventures, a coalition deeply integrated with ED.
TPS was put on hold, and the higher ed community has been waiting for a re-release or some type of clarity.
