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

In order to improve the efficiency and effectiveness of the student aid delivery system, the Secretary and the Chief Operating Officer shall encourage and participate in the establishment of voluntary consensus standards and requirements for the electronic transmission of information necessary for the administration of programs under subchapter IV. The Chief Operating Officer shall participate in the activities of standard setting organizations in carrying out the provisions of this section. The Chief Operating Officer shall encourage higher education groups seeking to develop common forms, standards, and procedures in support of the delivery of Federal student financial assistance to conduct these activities within a standard setting organization. The Chief Operating Officer may pay necessary dues and fees associated with participating in standard setting organizations pursuant to this subsection. Except with respect to the common financial reporting form under section 1090(a) of this title , the Secretary shall consider adopting voluntary consensus standards agreed to by the organization described in subsection (b) for transactions required under subchapter IV, and common data elements for such transactions, to enable information to be exchanged electronically between systems administered by the Department and among participants in the Federal student aid delivery system. Nothing in this section shall restrict the ability of participating institutions and lenders from using a clearinghouse or servicer to comply with the standards for the exchange of information established under this section. to ensure the integrity and confidentiality of the information; and to protect against any reasonably anticipated security threats, or unauthorized uses or disclosures of the information. The term “clearinghouse” means a public or private entity that processes or facilitates the processing of nonstandard data elements into data elements conforming to standards adopted under this section. is accredited by the American National Standards Institute; develops standards for information transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this section; and is open to the participation of the various entities engaged in the delivery of Federal student financial assistance. The term “voluntary consensus standard” means a standard developed or used by a standard setting organization described in paragraph (2).