Magazine article University Business

Signing on to ESIGN: Electronic Signatures Bring New Convenience to Admissions and Financial Aid Transactions

Magazine article University Business

Signing on to ESIGN: Electronic Signatures Bring New Convenience to Admissions and Financial Aid Transactions

Article excerpt

Nearly four years have passed since enactment of the Electronic Signatures in Global and National Commerce Act (ESIGN Act) opened the door for higher education institutions to use electronic records and electronic signatures (e-sign) in place of traditional paper records and handwritten signatures. During that time, acceptance of e-sign has accelerated steadily on campuses across the nation, driven by two key factors. First, e-sign appeals to today's internet-savvy generation of applicants who are accustomed to the convenience and immediacy of online transactions. Second, schools recognize its potential to simplify and speed the admissions and financial aid processes and reduce administrative overhead.

To date, e-sign has found its greatest acceptance on federal financial aid documents. Not coincidentally, this is the arena in which the Department of Education (DOE) first provided definitive guidance on e-sign requirements with the July 2001 publication of Standards for Electronic Signatures in Electronic Student Loan Transactions. In the absence of similar guidance for other e-sign applications, many schools have been reluctant to broaden its use, not wanting to possibly run afoul of the requirements of the Family Educational Rights and Privacy Act (FERPA).

That may soon change, however, in the wake of DOE's recent amendment of [section] 99.30 of FERPA. The amendment allows students to use an electronic signature to consent to the release of transcripts and other personal data, and also details the standards that must be met to assure that e-sign is legally comparable to a pen-and-ink signature. These standards track very closely with those detailed earlier by DOE for e-sign on federal financial aid forms. With the amendment now in effect, schools have the guidance they need to construct an e-sign system that meets regulatory muster for all matriculation-related documents.

Removal of this final impediment is expected to spur institutions still on the sidelines to get into the e-sign game. To ease the way, they can learn much from the experience of schools who already have taken that step. Among these trailblazers, no school has longer experience with e-sign than American InterContinental University (AIU) Online. In June 2002, we became the first higher education institution in the United States authorized by DOE to allow students to use e-sign on federal financial aid documents. A year later, we were the first U.S. university or college to offer secure e-sign capabilities on all legal documents required for a student to apply and enroll in one of our online degree programs, including electronic signatures on transcript request forms.

KEY E-SIGN ISSUES

AIU Online's initial launch of e-sign followed several months of development work during which we collaborated closely with DOE officials to assure that our approach complied fully with their requirements in three critical areas:

* Authentication. The DOE standards require that the name, date of birth and Social Security number associated with an electronic signature must be authenticated by a third party against an approved database;

* Security. Transmission of social security numbers from a school to the third-party authenticator must be 100 percent secure, to prevent unauthorized access to applicants' personal data; and

* Disclosure. Applicants must be fully informed of their rights regarding the use of electronic signatures, including their right to opt out of the e-sign system.

The DOE standard allows considerable latitude in selecting the independent source of data against which applicant-provided data is compared. Such sources can include but are not limited to national commercial credit bureaus, commercially available data sources or services, state motor vehicle agencies and government databases. However, school databases are not an acceptable source.

Information that is to be verified must, at a minimum, include the applicant's name, Social Security number or driver's license number and date of birth. …

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