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ARTICLE · 27 FEBRUARY 2023

ED Revisits Third-Party Servicer And Incentive Compensation Guidance

Cooley LLP
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On February 15, ED announced two separate initiatives (one final and one proposed) that impact service providers to institutions of higher education that participate in federal financial aid programs.

United StatesConsumer Protection
Nancy Anderson
Nancy Anderson
Katherine Lee Carey
Katherine Lee Carey
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The Department of Education announced two initiatives that expand oversight of third-party providers to institutions of higher education that participate in federal financial aid programs.

On February 15, ED announced two separate initiatives (one final and one proposed) that impact service providers to institutions of higher education that participate in federal financial aid programs. Both initiatives are aimed at expanding ED's oversight over third-party providers that collaborate with institutions to recruit students, develop instructional content and provide retention and other support services.

These initiatives will require institutions and their partners to carefully evaluate their existing arrangements, including assessing whether any services provided by a third party are newly subject to ED's expanded third-party servicer guidance and monitoring whether the payment structure between the institution and provider needs modification. Both announcements

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