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The new FSA Guidance on Third-Party Servicers has a greater impact on all schools and all contracted entities than many might think.

According to the guidance most, if not all of your contracts need to be reviewed – not just financial aid contracts – the entire school’s contracts. FSA states that “almost every service impacts TIV Administration”. If your school is using solutions such as PeopleSoft, Banner, etc. – these are TPS (third-party servicers). If a school is using an entity to administer distance learning – this too is now a TPS. We could go on, but there is no point until the comment period is over and we receive more guidance.

Most, if not all entities are going to have to modify their business model to include all the TPS requirements, which includes annual audits that you will have to include with your annual audit. Everything must be adjusted and it will cause a large problem for all schools and service entities. And don’t forget to consider the additional costs to these entities that will be passed along to the schools. That will affect your school’s budget.

Recently, the Department doubled down on this guidance but pushed out the deadline for compliance until September 2023 instead of the original deadline of May 2023. We will need all that time, and probably more to get ready for this.

Please JOIN US FOR THIS IMPORTANT WEBINAR which will be presented by one of the top Financial Aid lawyers in the country.

For DCL (GEN-23-03) Requirements and Responsibilities for Third-Party Servicers and Institutions (Updated Feb. 28, 2023) click here

OUR PRESENTER

The Chair of Thompson Coburn's Higher Education Practice, Aaron assists institutions to navigate a wide range of complex legal and regulatory matters.

Aaron has substantive experience in federal, state, and accrediting agency laws and standards that govern postsecondary institutions, and regularly advises on issues involving students, faculty and staff, facilities, academics, governance, and operations. He also leads the Firm's extremely active higher education transactional practice. He and his colleagues have experience negotiating, documenting, and implementing merger, asset acquisition, stock acquisition, joint venture, and religious sponsorship and affiliation transactions for both nonprofit and proprietary higher education clients. In recent years, the practice has managed numerous non-traditional arrangements, as well, including for-profit to non-profit conversions and the acquisition of distressed institutions.

Aaron and his colleagues are valued for their deep understanding of the postsecondary regulatory framework, including requirements relating to the federal financial aid programs, incentive compensation, distance education, the Clery Act, FERPA, and Title IX, among others. In October 2017, Aaron was selected by the U.S. Department of Education to serve as one of 17 negotiators charged with overhauling the Department's complex and controversial "borrower defense" rule. The Department appointed him to negotiate on behalf of general counsels, attorneys, and compliance officers at postsecondary institutions nationwide.

Aaron routinely represents institutions in administrative proceedings before state licensing entities, accrediting agencies, and the U.S. Department of Education, including matters arising from audits, program reviews, and investigations of the Office of Inspector General. He assists with the management of regulatory and government agency relationships, policy creation and implementation, strategic planning, and compliance systems design. In support of institutional initiatives, Aaron drafts and negotiates a wide variety of agreements, including domestic and international articulation, consortium, licensing, marketing, and bundled service provider (OPM) contracts.

The host of the Firm's popular Higher Education Webinar Series, and editorial director of REGucation, the Firm's higher education law and policy blog, Aaron is a frequent writer and speaker on topics relating to higher education policy and regulation. He is a member of the National Association of College and University Attorneys and of the American Bar Association.