 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER I--GENERAL PROVISIONS
 
  Part D--Administrative Provisions for Delivery of Student Financial 
                               Assistance
 
Sec. 1018b. Administrative simplification of student aid 
        delivery
        

(a) In general

    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 of this chapter and part C of subchapter I of chapter 34 
of title 42.

(b) Participation in standard setting organizations

    (1) The Chief Operating Officer shall participate in the activities 
of standard setting organizations in carrying out the provisions of this 
section.
    (2) 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.
    (3) The Chief Operating Officer may pay necessary dues and fees 
associated with participating in standard setting organizations pursuant 
to this subsection.

(c) Adoption of voluntary consensus standards

    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) of this section for transactions required under 
subchapter IV of this chapter and part C of subchapter I of chapter 34 
of title 42, 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.

(d) Use of clearinghouses

    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.

(e) Data security

    Any entity that maintains or transmits information under a 
transaction covered by this section shall maintain reasonable and 
appropriate administrative, technical, and physical safeguards--
        (1) to ensure the integrity and confidentiality of the 
    information; and
        (2) to protect against any reasonably anticipated security 
    threats, or unauthorized uses or disclosures of the information.

(f) Definitions

                          (1) Clearinghouse

        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.

                  (2) Standard setting organization

        The term ``standard setting organization'' means an organization 
    that--
            (A) is accredited by the American National Standards 
        Institute;
            (B) develops standards for information transactions, data 
        elements, or any other standard that is necessary to, or will 
        facilitate, the implementation of this section; and
            (C) is open to the participation of the various entities 
        engaged in the delivery of Federal student financial assistance.

                  (3) Voluntary consensus standard

        The term ``voluntary consensus standard'' means a standard 
    developed or used by a standard setting organization described in 
    paragraph (2).

(Pub. L. 89-329, title I, Sec. 143, as added Pub. L. 105-244, title I, 
Sec. 101(a), Oct. 7, 1998, 112 Stat. 1615.)


                            Prior Provisions

    Prior sections 1018b to 1018f were omitted in the general amendment 
of this subchapter by Pub. L. 102-325.
    Section 1018b, Pub. L. 89-329, title I, Sec. 143, as added Pub. L. 
100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1515, related to 
use of funds.
    Section 1018c, Pub. L. 89-329, title I, Sec. 144, as added Pub. L. 
100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1515; Pub. L. 
101-610, title II, Sec. 221(a), (b), Nov. 16, 1990, 104 Stat. 3180, 
related to applications.
    Section 1018d, Pub. L. 89-329, title I, Sec. 145, as added Pub. L. 
100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1516, related to 
technical assistance and coordination contracts.
    Section 1018e, Pub. L. 89-329, title I, Sec. 146, as added Pub. L. 
100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1516; Pub. L. 
101-305, Sec. 5, May 30, 1990, 104 Stat. 258; Pub. L. 101-610, title II, 
Sec. 221(c), Nov. 16, 1990, 104 Stat. 3180, related to authorization of 
appropriations.
    Section 1018f, Pub. L. 89-329, title I, Sec. 147, as added Pub. L. 
100-418, title VI, Sec. 6201, Aug. 23, 1988, 102 Stat. 1516, defined 
``public community agency'', ``institution of higher education'' and 
``Secretary''.
    A prior section 1019, Pub. L. 89-329, title I, Sec. 119, as added 
Pub. L. 96-374, title I, Sec. 101(a), Oct. 3, 1980, 94 Stat. 1383, 
authorized appropriations for education outreach programs, prior to the 
general amendment of this subchapter by Pub. L. 99-498.
