60D Comment Response

Federal Student Aid Response to Public Comment on Docket ED-2021-SCC-0127 – Third Party Authorization Form

Public Comments from National Council on Higher Education Resources (NCHER):

We hope this form/process will be electronic at some point and not just a paper process.

This form is for federally-held loans (per the above intro paragraph). The term "guaranteed" should NOT be used unless it also says loans held or owned by ED. NCHER agrees this form should only be used for federally owned/held loans. The language is now contradictory or can cause confusion with regard to loan types covered by this form.

NCHER does not support the scope of this form to include "acting on behalf/power of attorney functions. The current language could create issues with state laws that require a POA to be notarized before it is valid. This also could have unintended negative consequences by making it easier for scammers to misrepresent borrowers. We believe use of this form as a POA is not the intended use and this item needs to be corrected to reflect the intended use of this form.

We recommend that the certification language should also include the "cell phone consent" language included on deferment (and other) OMB-approved student loan forms. "I authorize the entity to which I submit this request and its agents to contact me regarding my request or my loans at any cellular telephone number that I provide now or in the future using automated telephone dialing equipment or artificial or prerecorded voice or text messages."

Discussion:

We appreciate the commenter’s suggestions on the form.

As it pertains to an electronic form/ process, we thank you for the comment and have noted this for any future form or process enhancement.

With regard to the use of language around guaranteed student loans or loans held or owned by the Department, our intent was not to preclude a borrower from providing access to a third-party to receive information pertaining to any Title IV federal student loan and/or federal grant that resides within the Department’s Information Technology (IT) systems. This includes any Federal Family Education Loan (FFEL), Federal Perkins Loan, or Health Education Assistance Loan (HEAL) that is currently or in the future captured within our (IT) systems. However, while a borrower may provide authorization for a third-party to receive federal student loan information, a third-party may only take action or act on behalf of the borrower for any federally owned or held loans and/ or federal grants. A third-party would not be permitted to take action on any federal student loans not held by the Department and the borrower would have to coordinate any action through their respective loan holder (e.g., FFEL loan holder).

The Department concurs that the final form should remove language and reference to a power of attorney provided variation in state laws and notary requirements that regulate such procedures.

Lastly, we appreciate the commenters’ suggestion to include ‘cell-phone consent’ language; however, we will retain the authorization/ consent language in the proposed form given it’s intended nature and use.

Changes:

We have modified Sections B (Designation, change, or revocation of third party) & C (Recipient’s request, understandings, authorizations, and certification) to clarify the difference between a third-party receiving any information about a Title IV federal student loan and/or federal grant that resides within the Department’s Information Technology (IT) systems versus a third-party’s ability to take action on behalf of a borrower with regard to certain federal student loans.

We provided instructions for a borrower that has non-federally held loans (e.g., FFEL loan holder) to contact their loan holder directly regarding any third-party authorizations.

We removed a reference to a power of attorney in Section C.

We added the Code of Conduct language to Section F which is a required affirmation for all third-party representatives as stated in Section D of the form.

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