WASHINGTON – In another blatant example of regulatory overreach, the Department of Education recently issued guidance for third-party servicers that gives the federal government more control over private companies. This guidance will increase regulatory burdens, stifle innovation, balloon administrative compliance costs, and reduce access to education, particularly for nontraditional learners.
In Case You Missed It, via Inside Higher Ed, Education and the Workforce Committee Chairwoman Virginia Foxx’s (R-NC) op-ed highlights the impact that the Department of Education’s disastrous policy change for third-party servicers will have on companies, colleges, and students.
The New Era of Regulatory Overreach
By Virginia Foxx
April 7, 2023
The Biden administration is best known for one thing: vastly overreaching its authority and then acting surprised when it gets pushback. On Feb. 15, the U.S. Department of Education issued a sweeping policy change through informal guidance that expands the definition of third-party servicers and would subject the institutions that contract with these third-party servicers to additional reporting, while the new third-party servicers would be obligated to turn over their contracts to the Department of Education, be held jointly and severally liable for any errors, and be required to undergo annual compliance audits.
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The Education Department seemingly sought to target companies that help colleges manage their online programs, but its reach was much broader. …The department received more than 1,000 comments, with many higher education associations, colleges and universities asking officials to rescind the guidance (the comment period closed last week).
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This bungled rollout of half-baked solutions does little to reduce debt or serve students. The dreadful irony of this action is that increased compliance costs often lead to increased tuition for students. …[T]he new guidance will increase regulatory burdens, stifle innovation, balloon administrative compliance costs and reduce access to education, particularly for nontraditional learners.
This is yet another move by an administration that misunderstands the operational dynamics on college campuses and the valuable role that technology plays in postsecondary education today. Congress and the department should be focused on how to lower the cost of college while increasing access for students, not pushing the policies of fringe advocacy groups at the expense of students and taxpayers.
The private sector has an important role to play in driving innovation, access, affordability and a higher rate of completion in postsecondary education. Until the Biden administration recognizes this fact, it will continue to offer “solutions” in search of a problem.
Read Foxx’s full op-ed here.
