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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

SUPPORTING STATEMENT

FOR PAPERWORK REDUCTION ACT SUBMISSION

A. Justification 

1. Explain the circumstances that make the collection of information necessary. Identify any

legal or administrative requirements that necessitate the collection. Attach a hard copy of the 

appropriate section of each statute and regulation mandating or authorizing the collection of 

information, or you may provide a valid URL link or paste the applicable section1. Specify the 

review type of the collection (new, revision, extension, reinstatement with change, reinstatement 

without change). If revised, briefly specify the changes. If a rulemaking is involved, make note 

of the sections or changed sections, if applicable.

The Department is seeking OMB approval of a Third Party Servicer Data Form to be used to 

validate the information reported to the Department by higher education institutions regarding 

third party servicers that administer one or more aspects of the administration of the Title IV, 

HEA programs on an institution’s behalf and to collect additional information required for 

effective oversight of these entities. This is a new request for collection.

Title IV eligible institutions of higher education are required to notify the Secretary of its third 

party servicer relationships via the institution’s Application for Approval to Participate in the 

Federal Student Financial Aid Programs (E-App). In addition to the name and address of the 

servicer, the E-App requires institutions to report the name and phone number of the servicer’s 

contact person as well as identify the services performed on behalf of the institution in section J 

of the E-App. The Department has determined through data analysis, research, program reviews, 

and audits that a significant number of higher education institutions have failed to report, update, 

and/or have incorrectly reported third party servicer information on the E-App. As a result, 

information contained in the Department’s databases regarding third party servicer contacts, 

demographics, client lists, and/or the services provided to higher education institutions is 

inconsistent and inaccurate. Therefore, the Department is unable to rely on the information

reported by institutions to provide appropriate oversight of the entities performing work on 

behalf of Title IV eligible institutions.

The information collected through the Third Party Servicer Data form will allow the Department 

to identify institutions of higher education that are failing to report or incorrectly reporting third 

party servicer information via the E-App; to monitor and enforce third party servicer compliance 

with annual audit requirements pursuant to 34 C.F.R. § 668.25(c), to identify other persons or 

organizations that contract with a third party servicer to assist with any aspect the administration 

of a Title IV program on behalf of the third party servicer or its clients, and to effectively

coordinate third party servicer program review assessments. 

 

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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

The Higher Education Act of 1965, as amended, allows institutions of higher education to 

outsource any aspect of the institution’s participation in any Title IV, HEA program. A third 

party servicer is defined as any individual or entity that contracts with or performs work on 

behalf of an institution to administer, through manual or automated processing, any aspect of an 

institution’s responsibilities required under the Title IV, HEA programs. 34 C.F.R. § 668.2 

(definition of third party servicer). 

Higher education institutions are required to notify the Secretary within 10 days of the date that:

(1) the institution enters into a new contract or significantly modifies an existing contract 

with a third party servicer to administer any aspect of that program;

(2) the institution or a third party servicer terminates a contract for the servicer to administer 

any aspect of that program; or

(3) a third party servicer that administers any aspect of the institution’s participation in that 

program stops providing services for the administration of that program, goes out of 

business, or files a petition under the Bankruptcy Code.

The institution’s notification must include the name and address of the servicer. See 34 C.F.R. § 

668.25(e)(1). 

The Title IV, HEA regulations authorize the Department to provide oversight of third party

servicers. A third party servicer is subject to the highest standard of care and diligence in 

administering any aspect of the programs on behalf of the institutions with which the servicer 

contracts and in accounting to the Secretary and those institutions for any funds administered by

the servicer under those programs. 34 C.F.R. § 668.82(b)(2). 

When contracting with an institution, a servicer and/or its contractors essentially steps into the 

shoes of that institution with respect to its compliance with the various requirements relevant to 

the Title IV, HEA functions it is servicing. A servicer is jointly and severally liable with the 

institution for any violation of Title IV, HEA requirements resulting from the functions 

performed by the servicer. 34 C.F.R. § 668.25(c)(3). 

The failure of a third party servicer to administer a Title IV, HEA program, or to account for the 

funds that the institution or servicer receives under that program, in accordance with the highest 

standard of care and diligence required of a fiduciary, constitutes ground for the Department to:

(1) Seek an emergency action against the servicer;

(2) Impose a fine against the servicer; or

(3) Limit, suspend, or terminate the servicer’s eligibility to contract with any institution to 

administer any aspect of the institution’s participation in that program.

34 C.F.R. § 668.82(c)(2).

A third party servicer violates its fiduciary duty if the servicer uses or contracts in a capacity that 

involves any aspect of the administration of the Title IV, HEA program with any other person, 

agency, or organization that has been or whose officers or employees have been convicted of, or 

pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of 

Federal, State, or local government funds; or administratively or judicially determined to have 
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OMB Number: XXXX-XXXX Revised: 11/25/2014

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committed fraud or any other material violation of law involving Federal, State, or local 

government funds. 34 C.F.R. § 668.82(d)(1)(i)(D).

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new 

collection, indicate the actual use the agency has made of the information received from the 

current collection.

Third Party Servicers that contract with Title IV eligible institutions to administer any aspect of 

an institution’s responsibilities required under the Title IV, HEA programs will be required to 

complete the Third Party Servicer Data Form. Hard copy forms will be sent to Third Party

Servicers currently listed in Department databases and will also be available to download from 

the Information for Financial Aid Professionals (IFAP) web-site. Servicers will be instructed to 

submit the form to the Third Party Servicer Oversight Group/Kansas City School Participation 

Division by e-mail or regular mail.

The Third Party Servicer Oversight Group will compare the information collected on the Third 

Party Servicer Data Form to the information maintained in the Department’s Postsecondary

Education Participants System (PEPS) database and update the servicer’s contact and 

demographic information in the system as needed. Higher Education institutions that failed to 

report or terminate third party servicer relationships will be notified to update the E-App to 

accurately reflect the institution’s relationship with the servicer(s). The Third Party Servicer 

Oversight Group will enter the information collected on the form into an Access database 

utilized by the Third Party Servicer Oversight Group to track program review and audit 

activities. The information collected will provide essential data needed to monitor third party

servicer compliance with annual audit requirements, as well as more reliable data for risk 

analysis and program reviews. 

The information collected will be utilized to populate third party servicer information during data 

migration when the Department’s Integrated Partner Management (IPM) system is implemented. 

IPM is currently scheduled for deployment the end of 2015 and will replace and/or integrate with 

a number of Department systems currently utilized, including PEPS.

The Third Party Servicer Oversight Group will work with the Department’s Policy Liaison and 

Implementation staff to issue an electronic announcement to the Higher Education community to 

communicate the requirement for third party entities to comply with this request.

3. Describe whether, and to what extent, the collection of information involves the use of 

automated, electronic, mechanical, or other technological collection techniques or forms of 

information technology, e.g. permitting electronic submission of responses, and the basis for the 

decision of adopting this means of collection. Also describe any consideration given to using 

technology to reduce burden.

Based on the comments received during the 60 day comment period, the format of the form was 

revised to allow respondents to type and save responses. Respondents will be able to submit the 

form as an e-mail attachment or print and submit the form via standard mail delivery. Once the
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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

IPM system is fully implemented, respondents will be required to enter and/or update the 

information through the partner portal that will reside in the IPM system. The IPM system data 

justification will be submitted through a separate OMB approval process.

4. Describe efforts to identify duplication. Show specifically why any similar information 

already available cannot be used or modified for use for the purposes described in Item 2 above.

The Department does not currently have a mechanism in place to collect the information needed 

for effective oversight directly from the entities that partner with eligible higher education 

institutions to perform Title IV related functions. The minimal amount of third party servicer 

information that is collected from higher education institutions through the E-App process has 

been determined to be inaccurate, inconsistent, and limited in scope. 

In addition, the Department has received notification from institutions indicating that some 

servicers have instructed institutions to not report an entity as a third party servicer creating 

confusion in the community regarding who should or should not be reported as a third party 

servicer. As a result, the Department has been unable to rely on the information reported by

higher education institutions to determine servicer compliance with audit requirements and/or to 

contact servicers for purposes of scheduling program reviews or responding to inquiries. 

Reliance solely on data reported from higher education institutions has restricted the 

Department’s ability to ensure third party servicers are complying with the statutes and 

regulations the Department has been tasked with overseeing. Requiring third party servicers to 

complete and submit the information contained on the Third Party Servicer Data form will equip 

the Department with the information necessary to effectively provide required oversight. 

Approval of this data collection tool will allow the Department to request and obtain vital 

information directly from entities that have been identified as third party servicers regardless of 

whether or not the servicer has been identified through the E-App process.

5. If the collection of information impacts small businesses or other small entities, describe any

methods used to minimize burden. A small entity may be (1) a small business which is deemed 

to be one that is independently owned and operated and that is not dominant in its field of 

operation; (2) a small organization that is any not-for-profit enterprise that is independently

owned and operated and is not dominant in its field; or (3) a small government jurisdiction, 

which is a government of a city, county, town, township, school district, or special district with a 

population of less than 50,000.

No small businesses are affected by this information collection. 

6. Describe the consequences to Federal program or policy activities if the collection is not 

conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing 

burden.

As stated previously, reliance solely on data reported from higher education institutions has 

restricted the Department’s ability to ensure third party servicers are complying with the statutes 

and regulations the Department has been tasked with overseeing. The Department must be able 
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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

to easily identify and contact any entity that is involved in the administration of Title IV 

programs on behalf of a Title IV eligible institution or the students it serves. The Department 

must have a method to validate the information reported by higher education institutions and to 

resolve discrepancies when one or more entities report incorrect or conflicting information. 

Absent a data collection tool to request pertinent information from third party servicers that 

contract with Title IV eligible institutions to perform one or more Title IV related functions, the 

Department lacks adequate information that is necessary to ensure compliance with the laws, 

regulations, and policies that govern the programs. Failure to collect this information

jeopardizes the Department’s ability to fulfill its fiduciary responsibility of safeguarding

taxpayer interest and ensuring all participants in the system of funding postsecondary education 

serve the interests of students. 

7. Explain any special circumstances that would cause an information collection to be conducted 

in a manner:

 requiring respondents to report information to the agency more often than quarterly;

 requiring respondents to prepare a written response to a collection of information in 

fewer than 30 days after receipt of it;

 requiring respondents to submit more than an original and two copies of any document;

 requiring respondents to retain records, other than health, medical, government contract, 

grant-in-aid, or tax records for more than three years;

 in connection with a statistical survey, that is not designed to produce valid and reliable 

results than can be generalized to the universe of study;

 requiring the use of a statistical data classification that has not been reviewed and 

approved by OMB;

 that includes a pledge of confidentiality that is not supported by authority established in 

statute or regulation, that is not supported by disclosure and data security policies that are 

consistent with the pledge, or that unnecessarily impedes sharing of data with other 

agencies for compatible confidential use; or

 requiring respondents to submit proprietary trade secrets, or other confidential 

information unless the agency can demonstrate that it has instituted procedures to protect 

the information’s confidentiality to the extent permitted by law.

Entities will be required to submit the initial Third Party Servicer Data Form within, but no later 

than, 30 days after receiving notification of the requirement. Consistent with the requirements of 

higher education institutions pursuant to 34 C.F.R. § 668.25(e)(1), third party servicers will be 

required to submit revised information within 10 days of the date:

 The entity changes its name;

 The entity changes the address or contact information for a primary location or additional 

location;

 The entity adds or terminates a contract with an eligible Title IV institution; or 

 The entity buys, sells, or merges with another third party servicer.

8. As applicable, state that the Department has published the 60 and 30 Federal Register notices 

as required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to 
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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

submission to OMB. Summarize public comments received in response to that notice and 

describe actions taken by the agency in response to these comments. Specifically address 

comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the 

availability of data, frequency of collection, the clarity of instruction and record keeping, 

disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or 

reported.

Consultation with representatives of those from whom information is to be obtained or those 

who must compile records should occur at least once every 3 years – even if the collection of 

information activity is the same as in prior periods. There may be circumstances that may

preclude consultation in a specific situation. These circumstances should be explained.

We published the 60-day Federal Register Notice inviting public comment. Comments were

received from two external entities. The form was updated based on the comments received. A 

description of the updates made to the form and the Department’s response to the general

comments submitted are included as an attachment to this filing. This notice is the final 30-day

Federal Register Notice inviting public comment.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration 

of contractors or grantees with meaningful justification.

No gifts or payments will be provided to any respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the 

assurance in statute, regulation, or agency policy. If personally identifiable information (PII) is 

being collected, a Privacy Act statement should be included on the instrument. Please provide a 

citation for the Systems of Record Notice and the date a Privacy Impact Assessment was 

completed as indicated on the IC Data Form. A confidentiality statement with a legal citation that 

authorizes the pledge of confidentiality should be provided.2If the collection is subject to the 

Privacy Act, the Privacy Act statement is deemed sufficient with respect to confidentiality. If 

there is no expectation of confidentiality, simply state that the Department makes no pledge 

about the confidentiality of the data.

The Department makes no pledge about the confidentiality of the data.

11. Provide additional justification for any questions of a sensitive nature, such as sexual 

behavior and attitudes, religious beliefs, and other matters that are commonly considered private. 

 

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Requests for this information are in accordance with the following ED and OMB policies: Privacy Act of 1974, 

OMB Circular A-108 – Privacy Act Implementation – Guidelines and Responsibilities, OMB Circular A-130 

Appendix I – Federal Agency Responsibilities for Maintaining Records About Individuals, OMB M-03-22 – OMB 

Guidance for Implementing the Privacy Provisions of the E-Government Act of 2002, OMB M-06-15 –

Safeguarding Personally Identifiable Information, OM:6-104 – Privacy Act of 1974 (Collection, Use and Protection 

of Personally Identifiable Information)
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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

The justification should include the reasons why the agency considers the questions necessary, 

the specific uses to be made of the information, the explanation to be given to persons from 

whom the information is requested, and any steps to be taken to obtain their consent.

The Department is not collecting information of a sensitive nature.

12. Provide estimates of the hour burden of the collection of information. The statement should:

 Indicate the number of respondents by affected public type (federal government, 

individuals or households, private sector – businesses or other for-profit, private 

sector – not-for-profit institutions, farms, state, local or tribal governments), 

frequency of response, annual hour burden, and an explanation of how the burden was 

estimated, including identification of burden type: recordkeeping, reporting or third 

party disclosure. All narrative should be included in item 12. Unless directed to do 

so, agencies should not conduct special surveys to obtain information on which to 

base hour burden estimates. Consultation with a sample (fewer than 10) of potential 

respondents is desirable. If the hour burden on respondents is expected to vary widely 

because of differences in activity, size, or complexity, show the range of estimated 

hour burden, and explain the reasons for the variance. Generally, estimates should 

not include burden hours for customary and usual business practices.

 If this request for approval covers more than one form, provide separate hour burden 

estimates for each form and aggregate the hour burdens in the ROCIS IC Burden 

Analysis Table. (The table should at minimum include Respondent types, IC activity, 

Respondent and Responses, Hours/Response, and Total Hours)

 Provide estimates of annualized cost to respondents of the hour burdens for 

collections of information, identifying and using appropriate wage rate categories. 

The cost of contracting out or paying outside parties for information collection 

activities should not be included here. Instead, this cost should be included in Item 

14.

The Department anticipates an initial response of approximately 600 third party servicers based 

on the initial mailing. Of the 600, the Department anticipates that 400 respondents will be forprofit servicers, 100 respondents will be not-for-profit servicers, 50 respondents will be State 

servicers and 50 respondents will be individuals. The Department estimates that it will take an 

average of 75 minutes to complete the Third Party Servicer Data Form and return it to the 

Department.

Therefore, the Department estimates the total burden for this information collection to be 750 

hours.

Type of Respondent Number of Responses Time/Response Total Time

For-profit servicer 400 90 minutes 36,000 minutes

Not-for-profit servicer 100 60 minutes 6,000 minutes

State agencies 50 30 minutes 1,500 minutes

Individuals 50 30 minutes 1,500 minutes

Total for new collection 600 75 minutes 

(weighted average)

45,000 minutes or 

750 hours
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OMB Number: XXXX-XXXX Revised: 11/25/2014

RIN Number: XXXX-XXXX (if applicable)

13. Provide an estimate of the total annual cost burden to respondents or record keepers 

resulting from the collection of information. (Do not include the cost of any hour burden shown 

in Items 12 and 14.)

 The cost estimate should be split into two components: (a) a total capital and start-up cost 

component (annualized over its expected useful life); and (b) a total operation and 

maintenance and purchase of services component. The estimates should take into account 

costs associated with generating, maintaining, and disclosing or providing the 

information. Include descriptions of methods used to estimate major cost factors 

including system and technology acquisition, expected useful life of capital equipment, 

the discount rate(s), and the time period over which costs will be incurred. Capital and 

start-up costs include, among other items, preparations for collecting information such as 

purchasing computers and software; monitoring, sampling, drilling and testing 

equipment; and acquiring and maintaining record storage facilities.

 If cost estimates are expected to vary widely, agencies should present ranges of cost 

burdens and explain the reasons for the variance. The cost of contracting out information 

collection services should be a part of this cost burden estimate. In developing cost 

burden estimates, agencies may consult with a sample of respondents (fewer than 10), 

utilize the 60-day pre-OMB submission public comment process and use existing 

economic or regulatory impact analysis associated with the rulemaking containing the 

information collection, as appropriate.

 Generally, estimates should not include purchases of equipment or services, or portions 

thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with 

requirements not associated with the information collection, (3) for reasons other than to 

provide information or keep records for the government or (4) as part of customary and 

usual business or private practices. Also, these estimates should not include the hourly

costs (i.e., the monetization of the hours) captured above in Item 12

Total Annualized Capital/Startup Cost : 

Total Annual Costs (O&M) : 

____________________

Total Annualized Costs Requested : 

There are no additional costs. There are no systems requirements to respondents.

14. Provide estimates of annualized cost to the Federal government. Also, provide a description 

of the method used to estimate cost, which should include quantification of hours, operational 

expenses (such as equipment, overhead, printing, and support staff), and any other expense that 

would not have been incurred without this collection of information. Agencies also may

aggregate cost estimates from Items 12, 13, and 14 in a single table.

There are no additional costs to the Federal government.

15. Explain the reasons for any program changes or adjustments. Generally, adjustments in 

burden result from re-estimating burden and/or from economic phenomenon outside of an 
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RIN Number: XXXX-XXXX (if applicable)

agency’s control (e.g., correcting a burden estimate or an organic increase in the size of the 

reporting universe). Program changes result from a deliberate action that materially changes a 

collection of information and generally are result of new statute or an agency action (e.g., 

changing a form, revising regulations, redefining the respondent universe, etc.). Burden changes 

should be disaggregated by type of change (i.e., adjustment, program change due to new statute, 

and/or program change due to agency discretion), type of collection (new, revision, extension, 

reinstatement with change, reinstatement without change) and include totals for changes in 

burden hours, responses and costs (if applicable).

This is a request for a program change due to agency discretion. This new information collection 

will provide necessary information on third party servicers who provide Title IV, HEA services 

to eligible institutions and allow the Department to maintain oversight of the servicers and 

protect the interests of eligible institutions, eligible students and taxpayers.

16. For collections of information whose results will be published, outline plans for tabulation 

and publication. Address any complex analytical techniques that will be used. Provide the time 

schedule for the entire project, including beginning and ending dates of the collection of 

information, completion of report, publication dates, and other actions.

The results of this collection will not be published.

17. If seeking approval to not display the expiration date for OMB approval of the information 

collection, explain the reasons that display would be inappropriate.

The Department is not seeking this approval.

18. Explain each exception to the certification statement identified in the Certification of 

Paperwork Reduction Act.

The Department is not requesting any exceptions to the “Certification for Paperwork Reduction 

Act Submissions” of OMB Form 83-1.