20 U.S.C. § 1018b — Administrative simplification of student aid delivery

(a) In general. To make student-aid delivery more efficient and effective, the Secretary^* and Chief Operating Officer must encourage and participate in voluntary consensus standards and requirements for electronically transmitting information needed to administer subchapter-IV programs. (b) Standard-setting organizations. (1) The Chief Operating Officer must participate in these organizations’ activities. (2) The officer must encourage higher-education groups developing common forms, standards, and procedures to do so within such an organization. (3) The officer may pay necessary dues and fees. (c) Adoption. Except for the common financial reporting form under section 1090(a), the Secretary must consider adopting the organization’s voluntary consensus standards and common data elements for subchapter-IV transactions so systems and participants can exchange information electronically. (d) Clearinghouses. This section does not restrict institutions or lenders from using a clearinghouse or servicer to meet the standards. (e) Security. An entity maintaining or transmitting covered information must use reasonable and appropriate administrative, technical, and physical safeguards to (1) preserve its integrity and confidentiality and (2) protect against reasonably anticipated security threats and unauthorized uses or disclosures. (f) Definitions. (1) “Clearinghouse” means a public or private entity that processes or helps process nonstandard data into elements meeting adopted standards. (2) “Standard-setting organization” means an organization accredited by the American National Standards Institute that develops necessary or helpful transaction or data standards and is open to entities involved in Federal student-aid delivery. (3) “Voluntary consensus standard” means a standard developed or used by such an organization.