Part D—Administrative Provisions for Delivery of Student Financial Assistance
§1018. Performance-Based Organization for delivery of Federal student financial assistance
(a) Establishment and purpose
(1) Establishment
There is established in the Department a Performance-Based Organization (hereafter referred to as the "PBO") which shall be a discrete management unit responsible for managing the administrative and oversight functions supporting the programs authorized under subchapter IV of this chapter, as specified in subsection (b).
(2) Purposes
The purposes of the PBO are—
(A) to improve service to students and other participants in the student financial assistance programs authorized under subchapter IV, including making those programs more understandable to students and their parents;
(B) to reduce the costs of administering those programs;
(C) to increase the accountability of the officials responsible for administering the operational aspects of these programs;
(D) to provide greater flexibility in the management and administration of the Federal student financial assistance programs;
(E) to integrate the information systems supporting the Federal student financial assistance programs;
(F) to implement an open, common, integrated system for the delivery of student financial assistance under subchapter IV; and
(G) to develop and maintain a student financial assistance system that contains complete, accurate, and timely data to ensure program integrity.
(b) General authority
(1) Authority of Secretary
Notwithstanding any other provision of this part, the Secretary shall maintain responsibility for the development and promulgation of policy and regulations relating to the programs of student financial assistance under subchapter IV. In the exercise of its functions, the PBO shall be subject to the direction of the Secretary. The Secretary shall—
(A) request the advice of, and work in cooperation with, the Chief Operating Officer in developing regulations, policies, administrative guidance, or procedures affecting the Federal student financial assistance programs authorized under subchapter IV;
(B) request cost estimates from the Chief Operating Officer for system changes required by specific policies proposed by the Secretary; and
(C) assist the Chief Operating Officer in identifying goals for—
(i) the administration of the systems used to administer the Federal student financial assistance programs authorized under subchapter IV; and
(ii) the updating of such systems to current technology.
(2) PBO functions
Subject to paragraph (1), the PBO shall be responsible for the administration of Federal student financial assistance programs authorized under subchapter IV, excluding the development of policy relating to such programs but including the following:
(A) The administrative, accounting, and financial management functions for the Federal student financial assistance programs authorized under subchapter IV, including—
(i) the collection, processing, and transmission of data to students, institutions, lenders, State agencies, and other authorized parties;
(ii) the design and technical specifications for software development and procurement for systems supporting the Federal student financial assistance programs authorized under subchapter IV;
(iii) all software and hardware acquisitions and all information technology contracts related to the administration and management of student financial assistance under subchapter IV;
(iv) all aspects of contracting for the information and financial systems supporting the Federal student financial assistance programs authorized under subchapter IV;
(v) providing all customer service, training, and user support related to the administration of the Federal student financial assistance programs authorized under subchapter IV; and
(vi) ensuring the integrity of the Federal student financial assistance programs authorized under subchapter IV.
(B) Annual development of a budget for the activities and functions of the PBO, in consultation with the Secretary, and for consideration and inclusion in the Department's annual budget submission.
(C) Taking action to prevent and address the improper use of access devices, as described in
(i) detecting common patterns of improper use of any system that processes payments on Federal Direct Loans or other Department information technology systems;
(ii) maintaining a reporting system for contractors involved in the processing of payments on Federal Direct Loans in order to allow those contractors to alert the Secretary of potentially improper use of Department information technology systems;
(iii) proactively contacting Federal student loan borrowers whose Federal student loan accounts demonstrate a likelihood of improper use in order to warn those borrowers of suspicious activity or potential fraud regarding their Federal student loan accounts; and
(iv) providing clear and simple disclosures in communications with borrowers who are applying for or requesting assistance with Federal Direct Loan programs (including assistance or applications regarding income-driven repayment, forbearance, deferment, consolidation, rehabilitation, cancellation, and forgiveness) to ensure that borrowers are aware that the Department will never require borrowers to pay for such assistance or applications.
(3) Additional functions
The Secretary may allocate to the PBO such additional functions as the Secretary and the Chief Operating Officer determine are necessary or appropriate to achieve the purposes of the PBO.
(4) Independence
Subject to paragraph (1), in carrying out its functions, the PBO shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions.
(5) Audits and review
The PBO shall be subject to the usual and customary Federal audit procedures and to review by the Inspector General of the Department.
(6) Changes
(A) In general
The Secretary and the Chief Operating Officer shall consult concerning the effects of policy, market, or other changes on the ability of the PBO to achieve the goals and objectives established in the performance plan described in subsection (c).
(B) Revisions to agreement
The Secretary and the Chief Operating Officer may revise the annual performance agreement described in subsection (d)(4) in light of policy, market, or other changes that occur after the Secretary and the Chief Operating Officer enter into the agreement.
(c) Performance plan, report, and briefing
(1) Performance plan
(A) In general
Each year, the Secretary and Chief Operating Officer shall agree on, and make available to the public, a performance plan for the PBO for the succeeding 5 years that establishes measurable goals and objectives for the organization.
(B) Consultation
In developing the 5-year performance plan and any revision to the plan, the Secretary and the Chief Operating Officer shall consult with students, institutions of higher education, Congress, lenders, the Advisory Committee on Student Financial Assistance, and other interested parties not less than 30 days prior to the implementation of the performance plan or revision.
(C) Areas
The plan shall include a concise statement of the goals for a modernized system for the delivery of student financial assistance under subchapter IV and identify action steps necessary to achieve such goals. The plan shall address the PBO's responsibilities in the following areas:
(i) Improving service
Improving service to students and other participants in student financial aid programs authorized under under 1 subchapter IV, including making those programs more understandable to students and their parents.
(ii) Reducing costs
Reducing the costs of administering those programs.
(iii) Improvement and integration of support systems
Improving and integrating the systems that support those programs.
(iv) Delivery and information system
Developing open, common, and integrated systems for programs authorized under under 1 subchapter IV.
(v) Other areas
Any other areas identified by the Secretary.
(2) Annual report
Each year, the Chief Operating Officer shall prepare and submit to Congress, through the Secretary, an annual report on the performance of the PBO, including an evaluation of the extent to which the PBO met the goals and objectives contained in the 5-year performance plan described in paragraph (1) for the preceding year. The annual report shall include the following:
(A) An independent financial audit of the expenditures of both the PBO and the programs administered by the PBO.
(B) Financial and performance requirements applicable to the PBO under the Chief Financial Officers Act of 1990 and the Government Performance and Results Act of 1993.
(C) The results achieved by the PBO during the year relative to the goals established in the organization's performance plan.
(D) The evaluation rating of the performance of the Chief Operating Officer and senior managers under subsections (d)(4) and (e)(2), including the amounts of bonus compensation awarded to these individuals.
(E) Recommendations for legislative and regulatory changes to improve service to students and their families, and to improve program efficiency and integrity.
(F) Other such information as the Director of the Office of Management and Budget shall prescribe for performance based organizations.
(3) Consultation with stakeholders
The Chief Operating Officer, in preparing the report described in paragraph (2), shall establish appropriate means to consult with students, borrowers, institutions, lenders, guaranty agencies, secondary markets, and others involved in the delivery system of student aid under subchapter IV—
(A) regarding the degree of satisfaction with the delivery system; and
(B) to seek suggestions on means to improve the delivery system.
(4) Briefing on enforcement of student loan provisions
The Secretary shall, upon request, provide a briefing to the members of the authorizing committees on the steps the Department has taken to ensure—
(A) the integrity of the student loan programs; and
(B) that lenders and guaranty agencies are adhering to the requirements of subchapter IV.
(d) Chief Operating Officer
(1) Appointment
The management of the PBO shall be vested in a Chief Operating Officer who shall be appointed by the Secretary to a term of not less than 3 and not more than 5 years, and compensated without regard to chapters 33, 51, and 53 of title 5. The appointment shall be made on the basis of demonstrated management ability and expertise in information technology, including experience with financial systems, and without regard to political affiliation or activity.
(2) Reappointment
The Secretary may reappoint the Chief Operating Officer to subsequent terms of not less than 3 and not more than 5 years, so long as the performance of the Chief Operating Officer, as set forth in the performance agreement described in paragraph (4), is satisfactory.
(3) Removal
The Chief Operating Officer may be removed by—
(A) the President; or
(B) the Secretary, for misconduct or failure to meet performance goals set forth in the performance agreement in paragraph (4).
The President or Secretary shall communicate the reasons for any such removal to the authorizing committees.
(4) Performance agreement
(A) In general
Each year, the Secretary and the Chief Operating Officer shall enter into an annual performance agreement, that shall set forth measurable organization and individual goals for the Chief Operating Officer.
(B) Transmittal
The final agreement, and any revision to the final agreement, shall be transmitted to the authorizing committees, and made publicly available.
(5) Compensation
(A) In general
The Chief Operating Officer is authorized to be paid at an annual rate of basic pay not to exceed the maximum rate of basic pay for the Senior Executive Service under
(B) Bonus
In addition, the Chief Operating Officer may receive a bonus in an amount that does not exceed 50 percent of such annual rate of basic pay, based upon the Secretary's evaluation of the Chief Operating Officer's performance in relation to the goals set forth in the performance agreement described in paragraph (4).
(C) Payment
Payment of a bonus under subparagraph (B) may be made to the Chief Operating Officer only to the extent that such payment does not cause the Chief Operating Officer's total aggregate compensation in a calendar year to equal or exceed the amount of the President's salary under
(e) Senior management
(1) Appointment
(A) In general
The Chief Operating Officer may appoint such senior managers as that officer determines necessary without regard to the provisions of title 5 governing appointments in the competitive service.
(B) Compensation
The senior managers described in subparagraph (A) may be paid without regard to the provisions of
(2) Performance agreement
Each year, the Chief Operating Officer and each senior manager appointed under this subsection shall enter into an annual performance agreement that sets forth measurable organization and individual goals. The agreement shall be subject to review and renegotiation at the end of each term.
(3) Compensation
(A) In general
A senior manager appointed under this subsection may be paid at an annual rate of basic pay of not more than the maximum rate of basic pay for the Senior Executive Service under
(B) Bonus
In addition, a senior manager may receive a bonus in an amount such that the manager's total annual compensation does not exceed 125 percent of the maximum rate of basic pay for the Senior Executive Service, including any applicable locality-based comparability payment, based upon the Chief Operating Officer's evaluation of the manager's performance in relation to the goals set forth in the performance agreement described in paragraph (2).
(4) Removal
A senior manager shall be removable by the Chief Operating Officer, or by the Secretary if the position of Chief Operating Officer is vacant.
(f) Student Loan Ombudsman
(1) Appointment
The Chief Operating Officer, in consultation with the Secretary, shall appoint a Student Loan Ombudsman to provide timely assistance to borrowers of loans made, insured, or guaranteed under subchapter IV by performing the functions described in paragraph (3).
(2) Public information
The Chief Operating Officer shall disseminate information about the availability and functions of the Ombudsman to students, borrowers, and potential borrowers, as well as institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in those student loan programs.
(3) Functions of Ombudsman
The Ombudsman shall—
(A) in accordance with regulations of the Secretary, receive, review, and attempt to resolve informally complaints from borrowers of loans described in paragraph (1), including, as appropriate, attempts to resolve such complaints within the Department of Education and with institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in the loan programs described in paragraph (1); and
(B) compile and analyze data on borrower complaints and make appropriate recommendations.
(4) Report
Each year, the Ombudsman shall submit a report to the Chief Operating Officer, for inclusion in the annual report under subsection (c)(2), that describes the activities, and evaluates the effectiveness of the Ombudsman during the preceding year.
(g) Personnel flexibility
(1) Personnel ceilings
The PBO shall not be subject to any ceiling relating to the number or grade of employees.
(2) Administrative flexibility
The Chief Operating Officer shall work with the Office of Personnel Management to develop and implement personnel flexibilities in staffing, classification, and pay that meet the needs of the PBO, subject to compliance with title 5.
(3) Excepted service
The Chief Operating Officer may appoint, without regard to the provisions of title 5 governing appointments in the competitive service, technical and professional employees to administer the functions of the PBO. These employees may be paid without regard to the provisions of
(h) Establishment of fair and equitable system for measuring staff performance
The PBO shall establish an annual performance management system, subject to compliance with title 5, and consistent with applicable provisions of law and regulations, which strengthens the effectiveness of the PBO by providing for establishing goals or objectives for individual, group, or organizational performance (or any combination thereof), consistent with the performance plan of the PBO and its performance planning procedures, including those established under the Government Performance and Results Act of 1993, and communicating such goals or objectives to employees.
(i) Authorization of appropriations
The Secretary shall allocate from funds made available under
(
Editorial Notes
References in Text
The Chief Financial Officers Act of 1990, referred to in subsec. (c)(2)(B), is
The Government Performance and Results Act of 1993, referred to in subsecs. (c)(2)(B) and (h), is
Prior Provisions
A prior section 1018,
Another prior section 1018,
Amendments
2020—Subsec. (b)(2)(C).
2009—Subsec. (c)(3).
Subsec. (d)(3).
2008—Subsec. (a)(1).
Subsec. (a)(2)(D).
Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(2)(A)(i), (ii).
"(i) the collection, processing and transmission of applicant data to students, institutions and authorized third parties, as provided for in
"(ii) design and technical specifications for software development and systems supporting the delivery of student financial assistance under subchapter IV;".
Subsec. (b)(2)(A)(iii).
Subsec. (b)(2)(A)(iv).
Subsec. (b)(2)(A)(v).
Subsec. (b)(2)(A)(vi).
Subsec. (b)(2)(B).
Subsec. (c).
Subsec. (c)(1)(C)(i).
Subsec. (c)(1)(C)(iii).
Subsec. (c)(1)(C)(iv).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B).
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (d)(1).
Subsec. (d)(4)(B).
Subsec. (d)(5)(B).
Subsec. (d)(5)(C).
Subsec. (f)(2).
Subsec. (f)(3)(A).
Subsec. (g)(3).
Subsec. (h).
Subsecs. (i), (j).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2009 Amendment
Amendment by
Study of Market Mechanisms in Federal Student Loan Programs
§1018a. Procurement flexibility
(a) Procurement authority
Subject to the authority of the Secretary, the Chief Operating Officer of a PBO may exercise the authority of the Secretary to procure property and services in the performance of functions managed by the PBO. For the purposes of this section, the term "PBO" includes the Chief Operating Officer of the PBO and any employee of the PBO exercising procurement authority under the preceding sentence.
(b) In general
Except as provided in this section, the PBO shall abide by all applicable Federal procurement laws and regulations when procuring property and services. The PBO shall—
(1) enter into contracts to carry out the functions set forth in
(2) obtain the services of experts and consultants without regard to
(3) through the Chief Operating Officer—
(A) to the maximum extent practicable, utilize procurement systems that streamline operations, improve internal controls, and enhance management; and
(B) assess the efficiency of such systems and assess such systems' ability to meet PBO requirements.
(c) Service contracts
(1) Performance-based servicing contracts
The Chief Operating Officer shall, to the extent practicable, maximize the use of performance-based servicing contracts, consistent with guidelines for such contracts published by the Office of Federal Procurement Policy, to achieve cost savings and improve service.
(2) Fee for service arrangements
The Chief Operating Officer shall, when appropriate and consistent with the purposes of the PBO, acquire services related to the functions set forth in
(d) Two-phase source-selection procedures
(1) In general
The PBO may use a two-phase process for selecting a source for a procurement of property or services.
(2) First phase
The procedures for the first phase of the process for a procurement are as follows:
(A) Publication of notice
The contracting officer for the procurement shall publish a notice of the procurement in accordance with
(i) A general description of the scope or purpose of the procurement that provides sufficient information on the scope or purpose for sources to make informed business decisions regarding whether to participate in the procurement.
(ii) A description of the basis on which potential sources are to be selected to submit offers in the second phase.
(iii) A description of the information that is to be required under subparagraph (B).
(iv) Any additional information that the contracting officer determines appropriate.
(B) Information submitted by offerors
Each offeror for the procurement shall submit basic information, such as information on the offeror's qualifications, the proposed conceptual approach, costs likely to be associated with the proposed conceptual approach, and past performance of the offeror, together with any additional information that is requested by the contracting officer.
(C) Selection for second phase
The contracting officer shall select the offerors that are to be eligible to participate in the second phase of the process. The contracting officer shall limit the number of the selected offerors to the number of sources that the contracting officer determines is appropriate and in the best interests of the Federal Government.
(3) Second phase
(A) In general
The contracting officer shall conduct the second phase of the source selection process in accordance with sections 3306(a) to (e) and 3308,
(B) Eligible participants
Only the sources selected in the first phase of the process shall be eligible to participate in the second phase.
(C) Single or multiple procurements
The second phase may include a single procurement or multiple procurements within the scope, or for the purpose, described in the notice pursuant to paragraph (2)(A).
(4) Procedures considered competitive
The procedures used for selecting a source for a procurement under this subsection shall be considered competitive procedures for all purposes.
(e) Use of simplified procedures for commercial products and commercial services
Whenever the PBO anticipates that commercial products or commercial services will be offered for a procurement, the PBO may use (consistent with the special rules for commercial products and commercial services) the special simplified procedures for the procurement without regard to any dollar limitation otherwise applicable to the use of those procedures.
(f) Flexible wait periods and deadlines for submission of offers of noncommercial products and services
(1) Authority
In carrying out a procurement, the PBO may—
(A) apply a shorter waiting period for the issuance of a solicitation after the publication of a notice under
(B) notwithstanding subsection (a)(3) of such section, establish any deadline for the submission of bids or proposals that affords potential offerors a reasonable opportunity to respond to the solicitation.
(2) Inapplicability to commercial products and services
Paragraph (1) does not apply to a procurement of a commercial product or a commercial service.
(3) Consistency with applicable international agreements
If an international agreement is applicable to the procurement, any exercise of authority under paragraph (1) shall be consistent with the international agreement.
(g) Modular contracting
(1) In general
The PBO may satisfy the requirements of the PBO for a system incrementally by carrying out successive procurements of modules of the system. In doing so, the PBO may use procedures authorized under this subsection to procure any such module after the first module.
(2) Utility requirement
A module may not be procured for a system under this subsection unless the module is useful independently of the other modules or useful in combination with another module previously procured for the system.
(3) Conditions for use of authority
The PBO may use procedures authorized under paragraph (4) for the procurement of an additional module for a system if—
(A) competitive procedures were used for awarding the contract for the procurement of the first module for the system; and
(B) the solicitation for the first module included—
(i) a general description of the entire system that was sufficient to provide potential offerors with reasonable notice of the general scope of future modules;
(ii) other information sufficient for potential offerors to make informed business judgments regarding whether to submit offers for the contract for the first module; and
(iii) a statement that procedures authorized under this subsection could be used for awarding subsequent contracts for the procurement of additional modules for the system.
(4) Procedures
If the procurement of the first module for a system meets the requirements set forth in paragraph (3), the PBO may award a contract for the procurement of an additional module for the system using any of the following procedures:
(A) Single-source basis
Award of the contract on a single-source basis to a contractor who was awarded a contract for a module previously procured for the system under competitive procedures or procedures authorized under subparagraph (B).
(B) Adequate competition
Award of the contract on the basis of offers made by—
(i) a contractor who was awarded a contract for a module previously procured for the system after having been selected for award of the contract under this subparagraph or other competitive procedures; and
(ii) at least one other offeror that submitted an offer for a module previously procured for the system and is expected, on the basis of the offer for the previously procured module, to submit a competitive offer for the additional module.
(C) Other
Award of the contract under any other procedure authorized by law.
(5) Notice requirement
(A) Publication
Not less than 30 days before issuing a solicitation for offers for a contract for a module for a system under procedures authorized under subparagraph (A) or (B) of paragraph (4), the PBO shall publish in the Commerce Business Daily a notice of the intent to use such procedures to enter into the contract.
(B) Exception
Publication of a notice is not required under this paragraph with respect to a use of procedures authorized under paragraph (4) if the contractor referred to in that subparagraph (who is to be solicited to submit an offer) has previously provided a module for the system under a contract that contained cost, schedule, and performance goals and the contractor met those goals.
(C) Content of notice
A notice published under subparagraph (A) with respect to a use of procedures described in paragraph (4) shall contain the information required under
(6) Documentation
The basis for an award of a contract under this subsection shall be documented. However, a justification pursuant to
(7) Simplified source-selection procedures
The PBO may award a contract under any other simplified procedures prescribed by the PBO for the selection of sources for the procurement of modules for a system, after the first module, that are not to be procured under a contract awarded on a single-source basis.
(h) Use of simplified procedures for small business set-asides for services other than commercial services
(1) Authority
The PBO may use special simplified procedures for a procurement of services that are not commercial services if—
(A) the procurement is in an amount not greater than $1,000,000;
(B) the procurement is conducted as a small business set-aside pursuant to
(C) the price charged for supplies associated with the services procured are items of supply expected to be less than 20 percent of the total contract price.
(2) Inapplicability to certain procurements
The authority set forth in paragraph (1) may not be used for—
(A) an award of a contract on a single-source basis; or
(B) a contract for construction.
(i) Guidance for use of authority
(1) Issuance by PBO
The Chief Operating Officer of the PBO, in consultation with the Administrator for Federal Procurement Policy, shall issue guidance for the use by PBO personnel of the authority provided in this section.
(2) Guidance from OFPP
As part of the consultation required under paragraph (1), the Administrator for Federal Procurement Policy shall provide the PBO with guidance that is designed to ensure, to the maximum extent practicable, that the authority under this section is exercised by the PBO in a manner that is consistent with the exercise of the authority by the heads of the other performance-based organizations.
(3) Compliance with OFPP guidance
The head of the PBO shall ensure that the procurements of the PBO under this section are carried out in a manner that is consistent with the guidance provided for the PBO under paragraph (2).
(j) Limitation on multiagency contracting
No department or agency of the Federal Government may purchase property or services under contracts entered into or administered by a PBO under this section unless the purchase is approved in advance by the senior procurement official of that department or agency who is responsible for purchasing by the department or agency.
(k) Laws not affected
Nothing in this section shall be construed to waive laws for the enforcement of civil rights or for the establishment and enforcement of labor standards that are applicable to contracts of the Federal Government.
(l) Definitions
In this section:
(1) Commercial product
The term "commercial product" has the meaning given the term in
(2) Commercial service
The term "commercial service" has the meaning given the term in
(3) Competitive procedures
The term "competitive procedures" has the meaning given the term in
(4) Single-source basis
The term "single-source basis", with respect to an award of a contract, means that the contract is awarded to a source after soliciting an offer or offers from, and negotiating with, only such source (although such source is not the only source in the marketplace capable of meeting the need) because such source is the most advantageous source for purposes of the award.
(5) Special rules for commercial products and commercial services
The term "special rules for commercial products and commercial services" means the regulations set forth in the Federal Acquisition Regulation pursuant to
(6) Special simplified procedures
The term "special simplified procedures" means the procedures applicable to purchases of property and services for amounts not greater than the simplified acquisition threshold that are set forth in the Federal Acquisition Regulation pursuant to
(
Editorial Notes
Codification
In subsec. (d)(2)(A), "
In subsec. (d)(3)(A), "sections 3306(a) to (e) and 3308,
In subsec. (f)(1)(A), "
In subsec. (g)(5)(C), "
In subsec. (g)(6), "
Prior Provisions
A prior section 1018a,
Amendments
Subsec. (f).
Subsec. (f)(2).
Subsec. (h).
Subsec. (h)(1).
Subsec. (l)(1), (2).
Subsec. (l)(3).
Subsec. (l)(4).
Subsec. (l)(5).
Subsec. (l)(6).
2008—Subsec. (b)(1).
Subsec. (b)(2), (3).
Subsec. (c)(2).
Subsec. (d)(2)(B).
Subsec. (g)(4)(A).
Subsec. (g)(7).
Subsec. (h)(2)(A).
Subsec. (l)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Amendment by
§1018b. Administrative simplification of student aid delivery
(a) In general
In order to improve the efficiency and effectiveness of the student aid delivery system, the Secretary and the Chief Operating Officer shall encourage and participate in the establishment of voluntary consensus standards and requirements for the electronic transmission of information necessary for the administration of programs under subchapter IV.
(b) Participation in standard setting organizations
(1) The Chief Operating Officer shall participate in the activities of standard setting organizations in carrying out the provisions of this section.
(2) The Chief Operating Officer shall encourage higher education groups seeking to develop common forms, standards, and procedures in support of the delivery of Federal student financial assistance to conduct these activities within a standard setting organization.
(3) The Chief Operating Officer may pay necessary dues and fees associated with participating in standard setting organizations pursuant to this subsection.
(c) Adoption of voluntary consensus standards
Except with respect to the common financial reporting form under
(d) Use of clearinghouses
Nothing in this section shall restrict the ability of participating institutions and lenders from using a clearinghouse or servicer to comply with the standards for the exchange of information established under this section.
(e) Data security
Any entity that maintains or transmits information under a transaction covered by this section shall maintain reasonable and appropriate administrative, technical, and physical safeguards—
(1) to ensure the integrity and confidentiality of the information; and
(2) to protect against any reasonably anticipated security threats, or unauthorized uses or disclosures of the information.
(f) Definitions
(1) Clearinghouse
The term "clearinghouse" means a public or private entity that processes or facilitates the processing of nonstandard data elements into data elements conforming to standards adopted under this section.
(2) Standard setting organization
The term "standard setting organization" means an organization that—
(A) is accredited by the American National Standards Institute;
(B) develops standards for information transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this section; and
(C) is open to the participation of the various entities engaged in the delivery of Federal student financial assistance.
(3) Voluntary consensus standard
The term "voluntary consensus standard" means a standard developed or used by a standard setting organization described in paragraph (2).
(
Editorial Notes
Prior Provisions
Prior sections 1018b to 1018f were omitted in the general amendment of this subchapter by
Section 1018b,
Section 1018c,
Section 1018d,
Section 1018e,
Section 1018f,