The Department of Education recently sent out a notice (DCL ID: GEN-12-08) offering guidance to schools that contract with a third party servicer. This announcement reminds institutions of their responsibilities when they enter into contracts.
A “third party servicer’ is defined in 34 CFR 668.2 as “An individual (not including an employee of the institution) or a State, or a private, profit, no non-profit organization that enters into a contract with an eligible institution to administer, through either manual or automated processing, any aspect of the institutions participation in any title IV, HEA program.” Some examples of these functions are: processing student financial aid applications; performing need analysis; determining student eligibility and related activities; certifying loan applications; receiving, disbursing or delivering title IV funds, preparing FISAP to name a few.
The institution has 10 days to notify the Secretary that the institution has entered into a new third-party servicer contract or significantly modifies an existing contract; the institution or servicer terminates a contract; or the servicer stops performing the functions required under the contract, goes out of business of files a bankruptcy petition. This notice must include the name and address of the servicer.
Where do you go for this? The school should use the E-APP to make these updates. The Application for Approval to Participate in Federal Student Aid Programs can be found at: www.eligcert.ed.gov. under section J. If you don’t know your user name or password, just look on your Program Participation Agreement (PPA) or your Eligibility and Certification Approval Report (ECAR) or give the case team a call.