ED Policy Roundup

The U.S. Department of Education (ED) rolled out updates on a number of policies important to the OME community:

• Third-Party Servicer Update: ED announced, via a court filing, that it will rescind its previous third-party servicer (TPS) guidance by November 18, 2024. In February 2023, ED sought to expand the definition of companies and nonprofit entities that are considered TPS—a designation that would have subjected them to regular audits and oversight. AACOM was particularly concerned that hospitals and clinics that host rotations for medical students may be classified as TPS under the new definition. We strongly opposed this guidance and submitted a joint comment letter with the Association of American Medical Colleges, as well as joined an American Council on Education stakeholder letter. While the rescission of the guidance is a positive development, ED stated in July that it was prepared to go through a rule-making process to change the third-party servicer regulations. AACOM will review and comment when the rules are released.
• Possible Enforcement Action: In its September 2024 Enforcement Bulletin, ED gave notice that under the regulations implementing the Higher Education Act, the Secretary may take administrative action against an institution that has made a substantial misrepresentation about its educational program, financial charges or the employability of its graduates. The bulletin provides examples for Title IV-eligible schools of what may constitute ‘misrepresentation.’
• FAFSA Update: ED provided additional resources and details on technical fixes to several identified glitches in the 2024-2025 and 2025-2026 Free Application for Federal Student Aid (FAFSA) cycles. These fixes, which include addressing issues that required some students and contributors to resign forms or provide assets on the initial application, are expected to enhance security and tracking. ED will host a webinar on Friday, November 8, 2024 from 3:00-4:00 PM ET and it is expected that the 2025-2026 FAFSA form will be available by December 1, 2024.