Third-party vendors pose significant risks to financial institutions, with a doubling in breaches sourced from third parties “30% of all breaches involved a third-party, up from 15% the previous year” according to the 2025 Verizon DBIR. The GLBA (Gramm-Leach-Bliley Act) mandates that institutions ensure their third-party service providers protect customer information through robust security programs.
Many have previously thought that managing a vendor through contract compliance was enough, but with cyber incidents increasing, there is a lot of mess to clean up that more companies are becoming proactive in continuously monitoring their vendors including employing external attack surface assessments to better manage the cyber risk posed by third parties with SLAs for remediation becoming part of the contract management aspect.
Addressing the challenges and solutions for GLBA compliance in higher education, third-party risk management is one of the more critical opportunities to uplevel the cybersecurity posture of an institution’s supply chain/ecosystem for safeguarding sensitive data and maintaining regulatory compliance. Explore our comprehensive guide to enhance your institution’s third-party risk posture.
Why Third-Party Risk Management Is Necessary
Outsourcing services to vendors like cloud storage providers, file transfer software, student information systems, or payment processors introduces serious vulnerabilities. These third parties may not follow your institution’s cybersecurity best practices, creating a weak link in the data protection chain.
According to GLBA compliance requirements for higher education, you’re accountable for these risks under 314.4(f)(3) of the Code of Federal Regulations. Therefore, managing third-party risk isn’t just smart, it’s a legal requirement to ensure data breach prevention and maintain higher education regulatory compliance.
Third-Party Risk in the Higher Education Landscape
Understanding third-party risk in the higher education landscape is crucial for managing potential vulnerabilities and ensuring compliance with various regulations.
The Unique Challenges for Educational Institutions
Colleges and universities operate in a decentralized environment. Departments often engage different vendors for various services, from learning management systems, scientific lab software, to housing and billing platforms. This fragmented structure increases the institution’s attack surface and the complexity of tracking vendor access and ensuring secure data practices.
The Impact of a Vendor Breach
A breach by a third-party vendor can have devastating consequences for higher education institutions (recall the MOVEit file transfer breach from Progress Software), including the exposure of thousands of student records, regulatory penalties, loss of reputation and trust, and potential litigation.
Even if the breach occurs outside the institution’s direct control, they are still held accountable, requiring an investigation and if needed to make required to make legal information disclosure announcements, making it crucial to implement rigorous third-party assessments and ongoing monitoring to reduce that burden.
This underscores the importance of proactively managing vendor relationships to mitigate the risks associated with external partnerships and protect both institutional and student data.
Key Components of Third-Party Risk Management in GLBA Compliance
To ensure alignment with GLBA requirements for higher education, it’s important to understand the key components that form the foundation of effective third-party risk management.
1. Incident Response and Breach Notification Protocols
Ensure vendors have robust incident response plans. Define breach notification procedures clearly, including timelines and required information. Being proactive aids in rapid data breach prevention and containment.
2. Contractual Safeguards
Some terms align vendors with your cybersecurity best practices and enforce shared responsibility. Include specific clauses in contracts that obligate vendors to:
- Follow your institution’s security protocols
- Report incidents within a defined timeframe
- Allow periodic audits and assessments
- Some institutions are now including SLAs related to vulnerability remediation
3. Ongoing Monitoring and Due Diligence
Use automated tools to track vendor compliance with your GLBA security checklist efficiently. Vendor risk doesn’t end after contract signing. Institutions must:
- Monitor vendor activities regularly
- Update risk profiles annually or after major changes
- Conduct periodic security reviews or third-party audits
- Offboard vendors, removing access, if the service relationship has been terminated
4. Vendor Risk Assessment
Before onboarding any vendor, perform a detailed risk assessment. This should include:
- Evaluating the vendor’s cybersecurity posture
- Requesting documentation like a HECVAT, SOC 2 Type 2 reports or ISO 27001 certifications
- Reviewing the vendor’s data handling, storage, and access control policies
5. Vendor Offboarding and Data Disposal
At the end of a vendor relationship, ensure:
- Secure return or destruction of data
- Removal of system access
- Documentation of the offboarding process
Failure to do so may leave residual access points vulnerable to attack.
Best Practices for Strengthening Third-Party Risk Posture
To build on these foundational strategies to meet the challenges and solutions for GLBA compliance in higher education, the following best practices offer practical steps to further strengthen your institution’s third-party risk posture.
1. Establish a Centralized Risk Management Team
Form a cross-functional team with members from IT, legal, procurement, and compliance to standardize vendor evaluation, onboarding, and monitoring.
This ensures consistent risk management practices and promotes accountability across all departments involved in third-party oversight.
2. Use a Tiered Risk-Based Approach
Categorize vendors into risk tiers based on data sensitivity, system access, and potential impact. Prioritize oversight for high-risk vendors while applying lighter controls to lower-risk ones, ensuring efficient resource use and appropriately scaled compliance efforts.
3. Conduct Staff Training
Conducting regular staff training is essential to building a culture of security awareness across all departments in higher education institutions. Colleges or Departments may begin to understand what a “risky vendor” looks like as they evaluate solutions to meet their needs.
Faculty and administrative staff should be educated on recognizing risky vendor behaviors, properly reporting concerns, and incorporating compliance requirements into Requests for Proposal (RFPs) and vendor selection processes.
4. Regularly Update the GLBA Security Checklist
Institutions should regularly update their GLBA security checklist to keep pace with evolving regulations and emerging threats. The regulation may change over time, your IT environment and services are likely to change more quickly which can require maintaining an accurate asset inventory, documentation reviews, user access reviews and continuous vulnerability monitoring.
This includes incorporating new compliance mandates, adopting advancements in data protection technologies, and applying lessons learned from past incidents or audits.
Learning from the experiences of peer institutions can also strengthen the framework and improve overall security and compliance readiness.
5. Implement Continuous Monitoring of Vendor Performance
Rather than relying solely on periodic assessments, adopt continuous monitoring tools and processes to track vendor performance and risk indicators in real time.
This approach supports GLBA compliance by enabling institutions to detect potential issues early, respond proactively to threats, and maintain an up-to-date view of third-party risk profiles.
6. Integrate Risk Management into the Contract Lifecycle
Embed risk evaluation and mitigation strategies throughout the vendor contract lifecycle, from initial negotiation to contract renewal or termination.
Ensure that contracts clearly define security expectations, compliance obligations, and incident response procedures. This not only protects institutional data but also fosters transparency and accountability between both parties.
Integrating Third-Party Management into Broader Compliance Programs
Integrating third-party risk management into broader compliance programs is vital for higher education institutions navigating complex regulations like GLBA, FERPA, and HIPAA. This integration ensures consistency across federal and state guidelines, reduces audit fatigue, and supports comprehensive data protection strategies.
By aligning third-party oversight with institutional compliance plans, colleges and universities can streamline processes and minimize risks. Utilizing tools that consolidate multiple regulatory requirements into a unified governance framework enhances efficiency, strengthens vendor accountability, and simplifies monitoring and reporting.
A holistic approach not only safeguards sensitive information but also demonstrates a proactive commitment to regulatory compliance and institutional integrity.
Secure the Chain, Secure the Data with FortifyData
Third-party vendors can be the weakest link or a powerful asset, depending on how well they’re managed.
By embedding vendor risk oversight into your GLBA compliance program, your institution strengthens its defense against breaches and regulatory consequences. Build trust, safeguard data, and stay audit-ready one vendor at a time.
FortifyData can assist by providing a comprehensive platform for continuous third-party risk monitoring, helping you assess and mitigate vendor risks in real life, and ensuring ongoing GLBA compliance with ease and confidence.
Ready to see what TPRM with FortifyData looks like? Schedule a demo and let’s discuss how we can help your educational institution’s third-party / vendor risk management program.
