May 19, 2023
Third-Party Servicer Guidance Formally Withdrawn
In an announcement made last month in a post on the Department of Education’s Homeroom blog, Under Secretary of Education James Kvaal wrote that the agency was rescinding its guidance on third-party servicers. Earlier this week, the Department made this move official by formally withdrawing its third-party servicer guidance through a Dear Colleague Letter (DCL).
The letter outlined the new process in which the Department plans to issue a final revised DCL with an effective date at least six months after its publication.
The DCL also rescinded prior guidance prohibiting contracts between colleges and foreign-owned or operated services. However, the Department reserved the right to revisit that issue in the upcoming negotiated rulemaking process, which is expected to begin this fall.
The letter outlined the new process in which the Department plans to issue a final revised DCL with an effective date at least six months after its publication.
The DCL also rescinded prior guidance prohibiting contracts between colleges and foreign-owned or operated services. However, the Department reserved the right to revisit that issue in the upcoming negotiated rulemaking process, which is expected to begin this fall.