### §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 section 1090(a) of this title, the Secretary shall consider adopting voluntary consensus standards agreed to by the organization described in subsection (b) for transactions required under subchapter IV, and common data elements for such transactions, to enable information to be exchanged electronically between systems administered by the Department and among participants in the Federal student aid delivery system.

#### (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).

(Pub. L. 89–329, title I, §143, as added Pub. L. 105–244, title I, §101(a), Oct. 7, 1998, 112 Stat. 1615.)

#### **Editorial Notes**

#### Prior Provisions

Prior sections 1018b to 1018f were omitted in the general amendment of this subchapter by Pub. L. 102–325.

Section 1018b, Pub. L. 89–329, title I, §143, as added Pub. L. 100–418, title VI, §6201, Aug. 23, 1988, 102 Stat. 1515, related to use of funds.

Section 1018c, Pub. L. 89–329, title I, §144, as added Pub. L. 100–418, title VI, §6201, Aug. 23, 1988, 102 Stat. 1515; Pub. L. 101–610, title II, §221(a), (b), Nov. 16, 1990, 104 Stat. 3180, related to applications.

Section 1018d, Pub. L. 89–329, title I, §145, as added Pub. L. 100–418, title VI, §6201, Aug. 23, 1988, 102 Stat. 1516, related to technical assistance and coordination contracts.

Section 1018e, Pub. L. 89–329, title I, §146, as added Pub. L. 100–418, title VI, §6201, Aug. 23, 1988, 102 Stat. 1516; Pub. L. 101–305, §5, May 30, 1990, 104 Stat. 258; Pub. L. 101–610, title II, §221(c), Nov. 16, 1990, 104 Stat. 3180, related to authorization of appropriations.

Section 1018f, Pub. L. 89–329, title I, §147, as added Pub. L. 100–418, title VI, §6201, Aug. 23, 1988, 102 Stat. 1516, defined "public community agency", "institution of higher education" and "Secretary".