Dive Brief:
- Colleges have increasingly outsourced tasks that relate to student aid dollars, forcing federal regulators to scramble to maintain oversight.
- Inside Higher Ed reports the U.S. Department of Education is working under a new process to track third-party servicers and trying to clearly define the currently fuzzy boundaries of its jurisdiction.
- Some say the department’s tracking and compliance monitoring of these contractors is an overreach in authority, according to the article.
Dive Insight:
Companies that fall under the purview of the federal government are responsible for submitting additional paperwork that can be time-consuming and expensive. The goal of outsourcing functions is generally to get the work done more cheaply. Colleges may have a hard time finding contractors willing to go through the extra scrutiny if the Education Department makes the process too cumbersome.
As Inside Higher Ed reports, at this point, a major problem is that the regulations are so vague they’re confusing. It will first take time to identify the types of services or companies that fall under the department’s jurisdiction and then time to set up quality monitoring of them.