FERPA and Student Loans: Protecting Student Privacy

The Family Educational Rights and Privacy Act of 1974 (FERPA) is a federal law that protects the privacy of student education records. It grants students certain rights regarding their education records and limits the disclosure of personally identifiable information without their consent. This article explores the relationship between FERPA and student loans, highlighting the key provisions of FERPA and how they apply to financial aid offices and student loan information.

Understanding FERPA

FERPA, also known as the Buckley Amendment, was enacted to ensure that students have access to their education records and to protect the confidentiality of those records. The law applies to all educational institutions that receive funding from the federal government, including colleges, universities, and elementary and secondary schools. If the Education Department finds any school violating it, the department may withhold funding from the institution.

Key Definitions

To understand FERPA's implications, it's crucial to define some key terms:

Education Records: These include any records, files, documents, video tapes, audio tapes, film, microfilm, microfiche, electronic records, and other materials that contain information directly related to a student and that are maintained by an educational agency or institution or by a party acting for the agency or institution [53 FR 11943, Apr. 11, 1988, as amended at 60 FR 3468, Jan. 17, 1995; 61 FR 59295, Nov. 21, 1996; 65 FR 41852, July 6, 2000; 73 FR 74851, Dec. 9, 2008; 76 FR 75641, Dec.
Personally Identifiable Information (PII): This refers to information that can be used to distinguish or trace an individual's identity, such as name, address, date of birth, Social Security number, biometric record, and other personal details [53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59295, Nov. 21, 1996; 73 FR 74851, Dec.
Eligible Student: This is a student who has reached 18 years of age or is attending a postsecondary institution [53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59296, Nov. When a student becomes an “eligible student,” all rights under FERPA transfer from the parent to the student.
Dates of attendance: The period of time during which a student attends or attended an educational agency or institution.

Student Rights Under FERPA

FERPA grants students several rights regarding their education records, including:

Right to Inspect and Review: Students have the right to inspect and review their education records [60 FR 3469, Jan. (a) Except as limited under §99.12, a parent or eligible student must be given the opportunity to inspect and review the student's education records.
Right to Seek Amendment: Students can request to have their education records amended if they believe the records are inaccurate, misleading, or violate their privacy rights [53 FR 11943, Apr. 11, 1988, as amended at 58 FR 3189, Jan. 7, 1993; 69 FR 21671, Apr. (d) The educational agency or institution shall give the parent or eligible student a full and fair opportunity to present evidence relevant to the issues raised under §99.21. If the request to change the records is denied, the student may request a hearing to challenge the contents on the grounds that the records are inaccurate, misleading, or violate the rights of the student. If the school does not amend the records after the hearing, the student has the right to place a statement in the record concerning the contested information.
Right to Consent to Disclosure: Generally, schools must obtain a student's written consent before disclosing personally identifiable information from their education records [53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59296, Nov. Law violations extend to personal information collected as a result of educational data collection, such as grades, disciplinary records, and personally identifiable information.
Right to File a Complaint: A parent or eligible student may file a written complaint with the Office regarding an alleged violation under the Act and this part [65 FR 41854, July 6, 2000, as amended at 73 FR 74854, Dec.
Right to Opt-Out of Directory Information: Schools may disclose directory information (information not considered harmful or an invasion of privacy if released) without consent, but they must provide students and parents with the opportunity to opt-out of such disclosures [53 FR 11943, Apr. 11, 1988, as amended at 73 FR 74854, Dec.

FERPA and the Financial Aid Office

FERPA applies to the Financial Aid Office. Records created and maintained by the financial aid office are considered to be education records and may not be disclosed without the student’s consent. The financial aid office handles sensitive student financial information, making FERPA compliance essential.

Read also: Understanding FERPA Eligibility

Records Protected by FERPA in Financial Aid

The following records are typically protected by FERPA in the financial aid office:

Records relating to eligibility and disbursement of Federal student aid funds.
Student account.
Federal work-study payroll records.
Financial aid applications.
SARs and ISIRs.
Documentation of professional judgment decisions.
Documentation relating to a refusal to certify Federal education loans.
Financial aid history information (for transfer students).
Cost of attendance information, including documentation relating to any adjustments.
Satisfactory Academic Progress (SAP) documentation (information on SAP Appeals).
Documents used for verification.
Entrance and exit counseling records.
Financial records.
Educational records include any materials received from the student and/or parents. It also includes any records that were used to make decisions about the student.

Exceptions to Consent for Financial Aid Disclosures

While FERPA generally requires student consent for disclosing education records, there are exceptions, particularly in the context of financial aid:

Financial Aid Eligibility: If the student applied for or received financial aid, disclosure is permitted if needed to determine financial aid eligibility or the amount of aid, or to enforce the terms and conditions of the aid.
US Department of Education: The school must provide directory information to the US Department of Education for recipients of Federal student aid funds who attend or attended the school. Likewise, the school must provide directory information for FFEL borrowers to the relevant lender and/or guarantee agency.
Legitimate Educational Interest: Disclosures to other departments or business units of the school are generally prohibited unless they have a legitimate educational interest in the records. (Typically, the development office will want to use this information to identify wealthy parents. FERPA prohibits providing the development office with this information, since the disclosure is not narrowly limited to a legitimate educational interest. Even if the college establishes it as a legitimate educational interest in advance through the annual notice of FERPA rights, one must ask whether this disclosure is for the benefit of the student or the benefit of the institution. Disclosures that are contrary to the interest of the student may have a chilling effect. For example, many families say they prefer private education loans over Federal education loans because of concerns over privacy. They trust the education lenders with their private information more than they trust the college.) When disclosure to a different school department is permitted, the disclosure must be limited to just the information for which they have a legitimate educational interest. For example, although some information may be shared with the registrar, the registrar does not have a legitimate educational interest in some of the information contained in ISIR records, so the financial aid office may not give the registrar copies of the full ISIR records.
Dependent Students: The student’s education records may be disclosed to either parent of a dependent student, where dependent follows the IRS definition (i.e., 50% support test), not the Federal student aid definition. Since this technically means that divorced parents could see the information submitted by the other ex-spouse, many schools go beyond the minimal FERPA requirements in their own policies, requiring consent of the party that provided the information before releasing it to the other parent or to the student. FERPA does not require the school to disclose the parent’s financial records to the student. (See 34 CFR 99.4, 34 CFR 99.7, 34 CFR 99.10, 34 CFR 99.12(b), 34 CFR 99.31(8) and 34 CFR 99.32 for details.)

Restrictions on Disclosure

Disclosures to other departments or business units of the school are generally prohibited unless they have a legitimate educational interest in the records.
Schools may not disclose directory information for a subset based on non-directory information, such as race or gender, as that would implicitly disclose the non-directory information. Dear Colleague Letter GEN-07-05 emphasizes that directory information that is linked to non-directory information, such as financial aid status, may not be disclosed. Directory information does not include race, gender, national origin, GPA, amounts of any awards (e.g., donor awards), student ID number, or Social Security Number.

Directory Information

Directory information, which is information that is not considered harmful or an invasion of privacy if released, may be disclosed without consent. However, the school must provide students and parents with the opportunity to opt-out of such disclosures.

What is Considered Directory Information?

Common examples of directory information include:

Student's name.
Address.
Telephone number.
Email address.
Photograph.
Dates of attendance.
Enrollment status (e.g., full-time or part-time).
Major field of study.
Degrees and awards received.
Participation in officially recognized activities and sports.
Weight and height of members of athletic teams.

Limitations on Directory Information Disclosure

The school may not disclose directory information for a subset based on non-directory information, such as race or gender, as that would implicitly disclose the non-directory information. Dear Colleague Letter GEN-07-05 emphasizes that directory information that is linked to non-directory information, such as financial aid status, may not be disclosed.

Record Retention

FERPA proper only requires that one keep a record of all disclosures of education records and that one retain any records that are subject to a pending disclosure request. The General Education Provisions Act, as amended by the Improving America’s Schools Act of 1994, requires education records to be retained for at least three years. In most cases this means that records must be kept at least three years from the end of the award year. For some records, a different reference date is used. For example, records concerning education loans must in most cases be kept for at least three years from the end of the award year in which the student last attended.

Exceptions to Consent

Disclosure of education records without consent is permitted in certain circumstances.

FERPA does not preclude the disclosure of statistical, non-personally identifiable information.
Disclosure of education records is permitted to authorized representatives of the US Department of Education (including contractors and the Office of the Inspector General) as well as state and local education authorities.
Disclosure of education records is also permitted to the INS for international students who have signed a Form I-20 or who are attending under an M-1 or J-1 visa.
The health or safety emergency exception allows disclosure without consent where the information that is disclosed will help prevent or mitigate a serious threat to the health or safety of the student, other students, or other members of the school community. The threat must be imminent and the disclosure must be narrowly tailored to the nature of the emergency.
Law enforcement unit records may be released without the student’s consent. This includes, for example, records maintained by the campus police.
Schools may disclose information concerning sex offenders that they received under a State sex offender registration and community notification program.
Educational records may be disclosed in response to a lawfully issued subpoena or court order or an ex parte order in connection with the investigation or prosecution of terrorism crimes. Since financial aid office staff are not qualified to determine whether a subpoena or court order is properly issued and qualifies for the disclosure exception, all such requests for disclosure should be turned over to the school’s attorney. The school’s attorney may take steps to challenge the subpoena (e.g., have it limited, modified or quashed) and will comply with any requirements to notify the student. Do not do anything in response to a subpoena or court order until the school’s attorney tells you what to do. (Schools most often encounter this kind of problem when a student is getting divorced. Such requests for educational records may or may not satisfy the requirements for a FERPA exception, and only the school’s attorney can make that call.)

Health and Safety Exceptions

If the educational agency or institution determines that there is an articulable and significant threat to the health or safety of a student or other individuals, it may disclose information from education records to any person whose knowledge of the information is necessary to protect the health or safety of the student or other individuals [53 FR 11943, Apr. 11, 1988; 53 FR 19368, May 27, 1988, as amended at 61 FR 59297, Nov. 21, 1996; 73 FR 74854, Dec.

Dealing with Subpoenas and Court Orders

Educational records may be disclosed in response to a lawfully issued subpoena or court order or an ex parte order in connection with the investigation or prosecution of terrorism crimes. Since financial aid office staff are not qualified to determine whether a subpoena or court order is properly issued and qualifies for the disclosure exception, all such requests for disclosure should be turned over to the school’s attorney. The school’s attorney may take steps to challenge the subpoena (e.g., have it limited, modified or quashed) and will comply with any requirements to notify the student. Do not do anything in response to a subpoena or court order until the school’s attorney tells you what to do. (Schools most often encounter this kind of problem when a student is getting divorced. Such requests for educational records may or may not satisfy the requirements for a FERPA exception, and only the school’s attorney can make that call.)

Complaints and Enforcement

A parent or eligible student may file a written complaint with the Office regarding an alleged violation under the Act and this part [65 FR 41854, July 6, 2000, as amended at 73 FR 74854, Dec.

Read also: Understanding FERPA

Filing a Complaint

A complaint must contain specific allegations of fact giving reasonable cause to believe that a violation of the Act or this part has occurred.
If you wish to file a complaint under FERPA or PPRA, you should do so by completing the FERPA or PPRA complaint form provided below.

Investigation and Resolution

The Office investigates a timely complaint filed by a parent or eligible student, or conducts its own investigation when no complaint has been filed or a complaint has been withdrawn, to determine whether an educational agency or institution or other recipient of Department funds under any program administered by the Secretary has failed to comply with a provision of the Act or this part.
The Office notifies in writing the complainant, if any, and the educational agency or institution, the recipient of Department funds under any program administered by the Secretary, or the third party outside of an educational agency or institution if it initiates an investigation under §99.64(b).
If the Office finds that an educational agency or institution or other recipient has not complied with a provision of the Act or this part, it may also find that the failure to comply was based on a policy or practice of the agency or institution or other recipient.
If an educational agency or institution determines that it cannot comply with the Act or this part due to a conflict with State or local law, it must notify the Office within 45 days, giving the text and citation of the conflicting law.

Other Relevant Regulations

Note to §99.2: 34 CFR 300.610 through 300.626 contain requirements regarding the confidentiality of information relating to children with disabilities who receive evaluations, services or other benefits under Part B of the Individuals with Disabilities Education Act (IDEA). 34 CFR 303.402 and 303.460 identify the confidentiality of information requirements regarding children and infants and toddlers with disabilities and their families who receive evaluations, services, or other benefits under Part C of IDEA.

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