The Department is aware that a large and growing industry has developed to provide one or more of these services as a means of transitioning academic programs into a distance education environment and expanding enrollment. Companies providing such services are sometimes referred to as “online program managers” or OPMs. As such, the institutions that contract with these entities are subject to reporting requirements with respect to the entities, and the entities themselves are subject to annual non-federal audits of the Title IV-relevant functions they perform, if such functions are covered by the audit guide.

Updated third-party servicer guidance 
The Department also released updated guidance that clarifies when organizations that contract with institutions are considered regulated entities known as third-party servicers. In particular, the guidance clarifies when companies and others who provide recruitment services for colleges will fall into this category. The updated guidance will ensure the Department has full transparency into and more data on the companies that work with colleges in areas that relate to federal financial aid. It also ensures that the Department and auditors will have the ability to review these companies’ compliance with federal rules and regulations.
  
Institutions will have until May 1, 2023, to report any arrangements with third-party servicers that have not been reported to the Department, detail the services the entity performs on behalf of the institution, and disclose the timeframe of the agreement. Entities or individuals that meet the definition of a third-party servicer as a result of this Dear Colleague Letter are required to submit the Third-Party Servicer Data Form to the Department or update their existing form by May 1, 2023.
Any audits required of third-party servicers would not be needed for at least six months, with most servicers having significantly longer than that. At the same time, the Department will accept public comment on the guidance through the Regulations.gov website for 30 days (Docket ID ED-2022-OPE-0103). We will consider those comments and publish any relevant changes based upon that feedback at a later date.

DALCPA has been providing assurance services and TPS Attestations / Audits for over 30 years for submission to the US Department of Education. With the rapidly changing regulatory environment, we would be happy to discuss with you your TPS needs.