The protection of consumer data is critical in multiple industries, but it’s a vital practice in the world of higher education. As colleges and universities collect basic and financial information about students, those students need to know that their personal data is secure and private.
This is where data privacy legislation specific to higher education comes into focus. One example is the Gramm-Leach-Bliley Act, which sets the standard for how colleges and universities must handle data as it relates to financial aid, assistance, and loan programs.
In this post, we’ll explore why GLBA matters for higher education and how you can create compliant data practices to keep your school in check.
What is GLBA?
The Gramm-Leach-Bliley Act is a federal regulation that falls under the purview of the Federal Trade Commission (FTC). The GLBA establishes that companies and organizations that provide financial services (like loans or aid) be transparent about information-sharing procedures.
Moreover, the GLBA requires organizations to have a public plan in place for protecting and guarding sensitive data. Under this law, sensitive data includes any confidential information that connects financial information to a specific individual.
Brief history of GLBA
Before President Clinton signed the Gramm-Leach-Bliley Act into law in 1999, the Glass-Steagall Act was the major governing rule associated with consumer financial data. GLBA replaced Glass-Steagall and made it easier for financial institutions to merge and offer a wider variety of services to customers.
Yet in the years following the signing of GLBA, consumer data privacy threats have steadily increased with the rise of online information sharing. While the flexibility for corporations is greater under GLBA rules, the responsibilities and associated penalties for non-compliance are also higher than they were in past decades.
Although the GLBA is applicable to a wide circle of institutions that offer financial products to consumers, more stringent practices are now required at institutions of higher education within the United States.
The impact on colleges and universities
Because colleges and universities work directly with the public (and particularly with students), the GLBA goes to great lengths to protect the data of these individuals from risk, breach, criminal threat, or loss.
Higher education financial aid departments may collect and use significant amounts of personal data related to a student’s or to a family’s financial background. Colleges then use this information to process several financial activities, which may include:
- Student loans (public or private)
- Federally sponsored Work Study programs
- Academic or merit-based grants
- Insurance policies
- Late or delinquent payment collection
- Payment plans
These financial offerings are critical for a school’s business operations, but they also have enormous impacts on a student’s financial standing after graduation. GLBA regulations mean that schools must carefully and privately handle the data they collect to fulfill these tasks.
Why GLBA compliance matters
Most colleges and universities are familiar with some level of data privacy regulation. For example, FERPA (Family Education Rights and Privacy Act) is the gold standard when handling educational record-keeping for students who are 18 years of age and older. FERPA dictates how (and to whom) college officials can speak about a student’s educational activities.
In a similar fashion, GLBA compliance matters in the world of higher education because it is the standard operating procedure for financial activities. Schools cannot cast off the responsibilities associated with GLBA without facing serious backlash, both from a legal and community standpoint.
GLBA also works behind the scenes to create successful financial pathways for students, parents, and families as they navigate a complex college enrollment process. During a time in which sensitive data is threatened more regularly than ever before, efforts to protect such data are critical for a school’s reputation.
Audits and risk mitigation
Colleges and university personnel—especially those who handle or process financial information—are responsible for instilling policies that align with GLBA. Institutions may be subject to standard audits and regular compliance checks.
Auditors may look for policies and procedures related to:
- The school’s comprehensive information security program
- Adherence to GLBA policies and procedures
- Adequate training for employees and individuals who process sensitive data
- Privacy rule maintenance and “opt out” policies for students and families
Failure to comply with GLBA standards may result in fines, penalties, or other actions that suspend normal business operations of a school.
How to learn more about GLBA and compliance practices
At FormAssembly, our goal is to help customers navigate complex data privacy policies and to make informed decisions about how data is collected, stored, and leveraged. If you serve at a college or university and want to strengthen your GLBA foundation, the following resources can serve as a practical launching point.
- GLBA: How FormAssembly Can Help
- FormAssembly for Higher Education
- Student Data Privacy Laws in Higher Ed
- The Ultimate Guide to GLBA
Get started with GLBA compliance
If you know that GLBA applies to the work you do, take your compliance practices seriously. FormAssembly’s GLBA Checklist makes it easy to see the steps you need to take in order to finetune your data privacy practices.