All You Need to Know About GLBA Compliance in Higher Education

Colleges and universities are not just centers of learning. They collect and store large amounts of sensitive data ranging from students’ personal financial information Furthermore, educational institutions also handle tuition payments and federal financial aid. This information makes them subject to the Gramm-Leach-Bliley Act (GLBA), a law designed to protect personal financial information.

For higher education institutions, however, compliance is challenging: decentralized IT environments, reliance on third-party vendors, and limited security budgets create gaps that cybercriminals are quick to exploit. Meeting GLBA’s strict requirements, which include risk assessments, encryption standards, continuous monitoring, and vendor oversight, is often an unbearable burden for campus resources.

Explore what GLBA compliance means for higher education, why it poses such unique challenges, and how working with the right compliance partner can make the GLBA compliance process far more manageable.

What is the Gramm-Leach-Billey Act?

GLBA was enacted on November 12, 1999, to reform the financial services industry and address concerns relating to consumer financial privacy. The Act’s primary purpose is to ensure that financial institutions safeguard the confidentiality of nonpublic personal information (NPPI) gathered from consumer records. The GLBA has three main sections: the Financial Privacy Rule, the Safeguards Rule, and a set of pre-text provisions.

The Financial Privacy Rule requires financial institutions to inform about their information-sharing practices and provide customers with the right to opt out. A detailed overview of the GLBA  privacy requirements is available online. This post is mainly concerned with the Safeguards Rule that requires financial institutions and their affiliates to have necessary administrative, technical, and physical measures to keep consumer information secure. In addition to protecting NPPI, organizations that fall under Act’s provisions must also take measures to detect and prevent as many instances of unauthorized access attempts as possible.

The GLBA has seen several important updates in recent years that directly affect higher education institutions handling student financial data. In 2021, the FTC issued a major revision to the Safeguards Rule, with enforcement beginning in June 2023. These changes require colleges and universities to designate a qualified individual to oversee information security, conduct formal risk assessments, implement encryption, create written incident response plans, and provide annual compliance reports to leadership.

In November 2023, the FTC introduced new breach notification requirements mandating that institutions report to the FTC within 30 days any breach affecting 500 or more individuals.

For higher education specifically, these updates tie into Title IV audit requirements and student financial aid data handling, meaning that noncompliance can jeopardize federal funding.

How does GLBA apply to higher education institutions?

First, GLBA compliance in higher education is more than just a regulatory requirement, but a safeguard for the financial well-being of students and the institution itself. Colleges and universities process vast amounts of financial aid data, tax records, loan information, and banking details, all of which are prime targets for cybercriminals.

A failure to secure this information can lead to identity theft for students, costly remediation for the institution, reputational damage, and even the loss of eligibility to participate in federal student aid programs.

Meanwhile, education was the third most targeted industry in 2024 worldwide, with the US seeing the greatest level of threat activity. In March 2024, the University of California, San Francisco fell victim to a ransomware attack. Malicious actors encrypted sensitive data, leading to a payment of $1.14 million to cybercriminals to regain access. In June 2025, the cyberattack on Columbia University affected almost 1M students, applicants, and employees, compromising their Social Security numbers, health information, and other sensitive data, according to school officials.

What are the Requirements for GLBA Compliance in Higher Education?

Higher education institutions that handle student financial aid data must comply with the FTC Safeguards Rule, which outlines how colleges and universities protect sensitive financial information. Here are the key requirements:

• ‍Designate a qualified individual. Each institution must appoint a security leader (GLBA Program Coordinator or Qualified Information Security Officer (QISO), responsible for overseeing the information security program and ensuring compliance across departments.
• Develop an information security program and maintain an incident response plan.Universities are required to maintain a documented information security program that defines policies, procedures, and technical safeguards for protecting student financial data. A written plan must outline how the institution will detect, respond to, and recover from a security incident, ensuring minimal disruption to operations and compliance with reporting requirements.‍
• Conduct risk assessments.Educational institutions that fall under GLBA scope must identify potential risks to financial aid systems, assess the likelihood and impact of threats, and continuously re-evaluate as technology and risks evolve.‍
• Implement technical and non-technical safeguards.To mitigate risks associated with sensitive data, schools must apply a list of security safeguards and conduct regular security audits to verify the effectiveness of their safeguards. The safeguards include: Role-based access controls, Strong authentication for financial systems, Encryption for data in transit and at rest, Secure software development and patch management, Continuous monitoring of networks and systems‍
• Manage third-party vendors.Universities often rely on vendors for cloud storage, loan servicing, and payment processing. Under GLBA, institutions are responsible for ensuring these vendors meet the same security standards through contracts and oversight.‍
• Report. At least annually, the designated security officer must provide a written report to the Board of Trustees or senior leadership, detailing the status of the information security program, identified risks, and recommendations for improvements.

Annual GLBA compliance audits

Higher education institutions started submitting GLBA-related information to the Department of Education back in 2019. According to the amendment to the Audit Guide, independent auditors will check colleges and universities for the presence of the following:

When an auditor determines that an institution has failed to comply with any of these requirements, the finding will be included in the institution’s audit report.

1. Individuals designated to coordinate the Information Security program;
2. Performed risk assessment that addresses the three critical areas: employee training and management, information systems, as well as the organization's ability to detect, prevent, and respond to attacks intrusions, or other systems failures; and
3. Documented safeguards for each risk identified during step 2.

Documented safeguards for each risk identified during step 2

What are the implications for GLBA non-compliance

GLBA provisions include severe penalties for non-compliance, including fines and even imprisonment. In case of GLBA violation:

• The institution will be subject to up to $100,000 penalty;
• Executives (or other responsible individuals) will be personally liable and may be subjected up to $10,000 for each violation;
• The institution’s executives may also be subject to imprisonment for not more than five years.

In addition, the Department of Education itself can undertake enforcement actions. Expressly, if a college or university is found to be non-compliant, it will be denied access to the Department’s information systems.

To conclude

While the GLBA Safeguards Rule provides a clear framework, higher education institutions often struggle to implement these requirements effectively. Colleges and universities typically operate with decentralized IT environments, multiple departments managing their own systems, and legacy infrastructure not designed for modern security needs. Limited cybersecurity budgets and staffing shortages further complicate efforts to deploy required security measures. The combination of these factors makes achieving full compliance challenging, leaving institutions exposed to regulatory penalties, data breaches, and potential loss of public trust.

To stay updated on the most recent GLBA-related topics, keep reading our blog or contact the Planet 9 team. We’ll be happy to assist!