FSA Delays Annual Student Loan Acknowledgment Requirement

On March 8, 2021, the Federal Student Aid office (“FSA”) of the U.S. Department of Education (“Department”) published an Electronic Announcement that delays the implementation date for the Annual Student Loan Acknowledgment. In a November 21, 2019 Electronic Announcement, the Department had previously notified schools about a change to the Master Promissory Note (MPN) confirmation process.

Pursuant to the new process, student and parent borrowers are required to view how much they currently owe in federal student loans, and to acknowledge that they have seen this amount before a school can make the first disbursement of the first Direct Loan that a student or parent borrower receives for each new award year.

The Annual Student Loan Acknowledgement process will continue to be available on StudentAid.gov. However, borrower completion of the Annual Student Loan Acknowledgement prior to disbursement will not be required for the 2021–22 Award Year.

At this time, all processing related to the Annual Student Loan Acknowledgement will continue under existing business rules. Schools will continue to receive information about a borrower’s completion of the Annual Student Loan Acknowledgement process on StudentAid.gov.

Please see the November 2019 Electronic Announcement for more information about the Annual Student Loan Acknowledgement process and the technical requirements.

U.S. Department of Education Issues COVID-19 Guidance to Schools

Due to the outbreak of coronavirus (COVID-19), the Centers for Disease Control and Prevention recommends that institutions of higher education consider postponing or canceling upcoming study abroad or foreign exchange programs. However, this advice has raised pressing questions about how this would affect Title IV, Higher Education Act (HEA) federal financial aid and a student’s ability to finish the term if a program is interrupted or canceled. In response, on March 5, 2020, the U.S. Department of Education’s office of Federal Student Aid (FSA) offered guidance permitting temporary flexibility and clarifying how higher education institutions can continue to comply with Title IV regulations for students whose activities are impacted by COVID-19.

To read the full text of this Duane Morris Alert, please visit the firm website.

Cybersecurity Update: Protecting Student Data Critical to Continued Participation in the Federal Student Aid Programs

On February 28, 2020, the U.S. Department of Education’s Office of Federal Student Aid (FSA) issued an electronic announcement regarding the enforcement of the Gramm-Leach-Bliley Act’s (GLBA) cybersecurity requirements for all institutions of higher education participating in the Title IV, Higher Education Act (HEA) federal student financial aid programs and their third-party servicers. The announcement states that auditors are expected to evaluate three GLBA information safeguard requirements in annual compliance audits of postsecondary institutions and third-party servicers. Any finding of noncompliance will be sent to both the Federal Trade Commission (FTC) and the FSA’s cybersecurity team for further investigation and potential adverse action. All Title IV participating institutions should consult with counsel about the very serious consequences and administrative actions that may be taken if they or their third-party servicers fail to meet the GLBA’s information security requirements.

To read the full text of this Duane Morris Alert, please visit the firm website.