C.F.R. » Title 34 » CHAPTER VI—OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION › PART 668—STUDENT ASSISTANCE GENERAL PROVISIONS › Subpart G—Fine, Limitation, Suspension and Termination Proceedings

34 C.F.R. § 668.82

Standard of conduct

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(a) A participating institution or a third-party servicer that contracts with that institution acts in the nature of a fiduciary in the administration of the Title IV, HEA programs. To participate in any Title IV, HEA program, the institution or servicer must at all times act with the competency and integrity necessary to qualify as a fiduciary.

(b) In the capacity of a fiduciary—

(1) A participating institution is subject to the highest standard of care and diligence in administering the programs and in accounting to the Secretary for the funds received under those programs; and

(2) A third-party servicer is subject to the highest standard of care and diligence in administering any aspect of the programs on behalf of the institutions with which the servicer contracts and in accounting to the Secretary and those institutions for any funds administered by the servicer under those programs.

(c) The failure of a participating institution or any of the institution's third-party servicers to administer a Title IV, HEA program, or to account for the funds that the institution or servicer receives under that program, in accordance with the highest standard of care and diligence required of a fiduciary, constitutes grounds for—

(1) An emergency action against the institution, a fine on the institution, or the limitation, suspension, or termination of the institution's participation in that program; or

(2) An emergency action against the servicer, a fine on the servicer, or the limitation, suspension, or termination of the servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in that program.

(d)(1) A participating institution or a third-party servicer with which the institution contracts violates its fiduciary duty if—

(i)(A) The servicer has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds;

(B) A person who exercises substantial control over the servicer, as determined according to § 668.15, has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds;

(C) The servicer employs a person in a capacity that involves the administration of Title IV, HEA programs or the receipt of Title IV, HEA program funds who has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or who has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds; or

(D) The servicer uses or contracts in a capacity that involves any aspect of the administration of the Title IV, HEA programs with any other person, agency, or organization that has been or whose officers or employees have been—

(1) Convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds; or

(2) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds; and

(ii) Upon learning of a conviction, plea, or administrative or judicial determination described in paragraph (d)(1)(i) of this section, the institution or servicer, as applicable, does not promptly remove the person, agency, or organization from any involvement in the administration of the institution's participation in Title IV, HEA programs, or, as applicable, the removal or elimination of any substantial control, as determined according to § 668.15, over the servicer.

(2) A violation for a reason contained in paragraph (d)(1) of this section is grounds for terminating—

(i) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program; and

(ii) The participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution had been aware of the violation and had failed to take the appropriate action described in paragraph (d)(1)(ii) of this section.

(e)(1) A participating institution or third-party servicer, as applicable, violates its fiduciary duty if—

(i)(A) The institution or servicer, as applicable, is debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or

(B) Cause exists under 2 CFR 180.700 or 180.800, as both those sections are adopted at 2 CFR 3485.12, for debarring or suspending the institution, servicer, or any principal or affiliate of the institution or servicer under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and

(ii) Upon learning of the debarment, suspension, or cause for debarment or suspension, the institution or servicer, as applicable, does not promptly—

(A) Discontinue the affiliation; or

(B) Remove the principal from responsibility for any aspect of the administration of an institution's or servicer's participation in the Title IV, HEA programs.

(2) A violation for a reason contained in paragraph (e)(1) of this section is grounds for terminating—

(i) The institution's participation in any Title IV, HEA program; and

(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program. The violation is also grounds for terminating, under this subpart, the participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution knew or should have known of the violation.

(f)(1) The debarment of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under the procedures described in 2 CFR 3485.612(d) terminates, for the duration of the debarment—

(i) The institution's participation in any Title IV, HEA program; and

(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.

(2)(i) The suspension of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under the procedures described in 2 CFR 3485.612(d), suspends—

(A) The institution's participation in any Title IV, HEA program; and

(B) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.

(ii) A suspension described in paragraph (f)(2) of this section lasts for a period of 60 days, beginning on the effective date specified in the notice by the Secretary under 2 CFR 3485.612(c), unless—

(A) The institution or servicer, as applicable, and the Secretary, agree to an extension of the suspension; or

(B) The Secretary begins a limitation or termination proceeding against the institution or servicer, as applicable, under this subpart before the 60th day of the suspension.

(3) A debarment or suspension not described in (f)(1) or (f)(2) of this section of a participating institution or third-party servicer by another Federal agency constitutes prima facie evidence in a proceeding under this subpart that cause for suspension or debarment and termination, as applicable, exists.

(Authority: E.O. 12549 (3 CFR, 1986 Comp., p. 189), E.O. 12689 (3 CFR, 1989 Comp., p. 235); 20 U.S.C. 1070, et seq., 1082(a)(1) and (h)(1), 1094(c)(1)(D) and (H), and 3474) [59 FR 22444, Apr. 29, 1994, as amended at 60 FR 33058, June 26, 1995; 68 FR 66615, Nov. 26, 2003; 77 FR 18679, Mar. 28, 2012]
Notes of Decisions
Cited in 11 cases (1 in the last 5 years), 1983–2026 · leading case: United States Ex Rel. Miller v. Weston Educ., Inc., 840 F.3d 494 (8th Cir. 2016).
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United States Ex Rel. Miller v. Weston Educ., Inc., 840 F.3d 494 (8th Cir. 2016). “” 34 C.F.R. § 668.82 . However, Relators fail to argue how Heritage’s knowledge of this general duty shows Heritage's pre-PPA knowledge and intent for the types of alterations made here.”
Moy v. Adelphi Inst., Inc., 866 F. Supp. 696 (E.D.N.Y 1994). · cites it 2× “5 Plaintiffs therefore allege that as Adelphi administered such financial aid programs it violated its fiduciary duty to students by making misrepresentations concerning the institution.”
United States Ex Rel. Miller v. Weston Educ., Inc., 784 F.3d 1198 (8th Cir. 2015). “” 34 C.F.R. § 668.82 . However, Relators fail to argue how Heritage's knowledge of this general duty shows Heritage's pre-PPA knowledge and intent for the types of alterations made here.”
Sistema Universitario Ana G. Mendez v. Riley, 234 F.3d 772 (1st Cir. 2000). “, 34 C.F.R. § 668.82 (1999). In 1982, PRJC began offering a community-based extension education program known as PROSEE (Programa de Servic-ios Educativos Especiales, or Special Educational Extension Services Program), and by 1984, Universidad Metropolitana and Universidad del…”
Student Gov't Ass'n of Wilberforce Univ. v. Wilberforce Univ., 578 F. Supp. 935 (S.D. Ohio 1983). “If an offending institution fails to bring itself into compliance, the Secretary may terminate CWS funds ( 34 C.F.R. § 668.82 ). Furthermore, reinstatement into the program is a matter within the Secretary’s discretion and the determinative factor in resuming funding is whether…”
Chauffeur's Training Sch., Inc. v. Riley, 967 F. Supp. 719 (N.D.N.Y. 1997). “” 34 C.F.R. § 668.82 . After a review of the relevant regulatory and statutory provisions, the Court agrees.”
Bowling Green Jr. Coll. v. U. S. Dep't of Educ., 687 F. Supp. 293 (W.D. Ky. 1988). “34 C.F. R. § 668.82. The purpose of these Title IV programs is not to keep an institution in business, but to assist its students in gaining a post-secondary education.”
United States v. Teeven, 745 F. Supp. 220 (D. Del. 1990). · cites it 2× “"In the capacity of a fiduciary, the [Academy] is subject to the highest standard of care and diligence in administering the programs and in accounting to the Secretary for the funds received under [the Pell and Stafford] programs.”
Chickoiyah Miller v. Weston Educ. (8th Cir. 2016). “” 34 C.F.R. § 668.82 . However, Relators fail to argue how Heritage’s knowledge of this general duty shows Heritage’s pre-PPA knowledge and intent for the types of alterations made here.”
Goddard v. City Univ. of Seattle (D.D.C. 2026). “” 34 C.F.R. § 668.82 (a); ECF 7 at 5–6. Goddard’s argument fails because to the degree that this regulation creates a fiduciary duty, that duty is created “only between the institution and the government agency supplying the federal funding.”
Lamec, Inc. v. Alexander (1st Cir. 1992). “The first, 34 C.F.R. 668.82 (c), states: An institution's failure to administer the Title IV, HEA programs, or to account for the funds it receives under those programs, in accordance with the highest standard of care and diligence required of a fiduciary, constitutes grounds…”
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