On January 9, 2015, The U.S. Department of Education published Dear Colleague Letter (DCL) GEN-15-01, wherein they provided guidance to higher education institutions that contract with third-party servicers to administer any aspect of their Title IV Student Assistance Programs.
Upon our review of the DCL, Nelnet Business Solutions (NBS) revised its contracts to ensure that all of our partners for whom we service the refunds process can demonstrate full compliance as it pertains to delivering Title IV refunds. Furthermore, we will be issuing contract addendums to our existing clients, inclusive of the newly-required demographic and contact information.
NBS takes compliance very seriously, but the DCL had no impact on the way in which NBS distributes refunds on behalf of our clients. In fact, it served as affirmation that the changes we’ve made to our refunds process are not only good for students, but have also served to shield our clients from painful, regulatory-enforced changes.
As we all know, refunds have been the subject of intense scrutiny from both the Department of Education and the Consumer Financial Protection Bureau (CFPB); particularly those refund methods where vendors/servicers automatically established accounts on behalf of students and subsequently assessed additional fees for those accessing their funds outside of specific constraints. As part of the DCL, this scrutiny seems to have been directly addressed within the FERPA Requirements section: “If a servicer is using the PII to set up a bank account for the student or to maintain a credit balance for the student, it must obtain prior written consent of the student.”
More than a year ago, NBS unveiled our Student Choice Refunds solution which provides students with easy access to their funds without subjecting them to predatory fees. NBS does not set up an account on the student’s behalf, so prior consent is not required. Indeed, as more and more clients have chosen Student Choice Refunds, we continue to hear how the simplified process and focus on choice is benefiting both schools and students.
So as you consider the impact of DCL GEN-15-01 might have on your school, we encourage you, if you haven’t already, to explore how realigning your refunds process with a focus on student choice can save you valuable time and ensure compliance.
President, Nelnet Business Solutions