The U.S. Department of Education (ED) today signaled that it will delay and considerably change the Dear Colleague Letter, initially issued on February 15th, that greatly expanded the definition of Third Party Servicers (TPS) to include a variety of organizations and companies that partner with institutions of higher education. The original letter also included a ban on foreign ownership of TPSs, causing considerable concern from the higher education community, including impact on the future of study abroad programs.
In a blog post today, Under Secretary of Education James Kvaal, noted that ED will revise the letter, and that the effective date will be at least six months after the final guidance letter is published. Additionally, the deadlines for audits and contract requirements would come in the fiscal year that starts after the new effective date for the final letter. Under Secretary Kvaal highlighted that there were more than 1,000 comments received by ED, which included a letter from the American Council on Education (ACE) and several higher education associations calling for the Dear Colleague Letter to be rescinded. ED intends to carefully review the comments and concerns from the community before ultimately revising the letter and making it final. The delay in the implementation of the Dear Colleague Letter comes after ED had already extended the deadline to September 1, 2023.
In addition to delaying the timeline, Under Secretary Kvaal noted some specifics about what ED intends to clarify or revise in the final letter:
- The TPS requirements will not apply to study abroad, recruitment of foreign students not eligible for Title IV, course-sharing arrangements between institutions, and dual enrollment programs.
- ED will remove the ban on foreign ownership in the guidance, but intends to approach this issue through a forthcoming Negotiated Rulemaking session.
- There will be additional clarifications around what is included in the definition of a TPS, with an intent to narrow the scope in areas including “software and computer services, student retention, and instructional content.”
ED did not release a timeline or mention how they may approach these issues through an upcoming Negotiated Rulemaking session (with the exception of including a focus on foreign ownership in that process).
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