Sen. Ron Wyden Expresses Privacy Concerns With ED's Payment Vehicle Pilot

By Allie Arcese, Sr. Director of Strategic Communications & Engagement

By Allie Bidwell, NASFAA Senior Reporter

The ranking member of the Senate Committee on Finance, Sen. Ron Wyden (D-OR), on Thursday wrote to Education Secretary Betsy DeVos, expressing concern over the potential for abuse of student data through the recently announced solicitation for companies to develop a pilot program to help students receive their Title IV credit balances without any fees via a mobile app.

The so-called “payment vehicle” would be developed by a third party company, which would manage a pilot program in cooperation with the Department of Education (ED). The company would not receive payment for running the program, and would not be allowed to charge schools for the service. ED also noted in the solicitation that the company cannot use any student data for marketing purposes “without explicit permission” from the student, which would be given through an explicit opt-in option.

Nevertheless, Wyden wrote, allowing the data to become the property of the third party company “creates the potential for abuse and misuse of thousands of students’ sensitive data.” He went on to say that many questions relating to privacy issues remain unanswered, and said he was concerned that students will be “aggressively encouraged to share their data with companies that put profits above students.”

He asked that by November 16 ED respond to a list of questions related to a private financial institution’s role in the payment vehicle program pilot, such as whether ED “views it as permissible” for such an institution to make a profit off of students’ transaction data, and whether limits will be placed on the use of data collected for non-marketing purposes.

“Students should not have to sacrifice their privacy as a condition of accessing their federal financial aid in a timely and efficient manner,” he wrote.


Publication Date: 11/2/2018

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