The U.S. Department of Education is telling colleges that accommodating transgender students extends to the data collected about them, but many colleges are finding that neither their software providers nor other federal agencies are prepared for such a change.

In a Dear Colleague letter issued earlier this month, the Education Department said colleges risk losing federal funding if they treat transgender students differently than other students of the same gender identity.

Those requirements also cover privacy and education records. According to the letter, a failure to keep a student’s transgender status private may be seen as a violation of Title IX of the Education Amendments of 1972. Releasing a student’s name or sex assigned at birth without the student’s permission, it continues, could also be a violation of the Family Educational Rights and Privacy Act of 1974.

Many colleges have for years asked students to share their preferred names and pronouns, but that information is normally used locally on campus, for example in university communications and for faculty members during roll call. Since the federal government requires colleges to report legal names and genders, colleges often keep students’ preferences separate from the names and genders they were assigned at birth.

Doing so usually means colleges have to customize software that they use. Many colleges are running older student information systems that were developed well before the debate about transgender people’s rights became a mainstream issue. Some systems may include options to categorize a student as “Male,” “Female” or “Unknown,” but administrators who use those systems on a regular basis say that one field is not enough to communicate the history of a student’s gender identity -- that a student was assigned one sex at birth and now identifies as another.

Major software vendors in the enterprise resource planning (ERP) market either declined to comment for this article or did not respond to requests for comment on whether they are considering updating their systems to accommodate transgender students. The issue, as it relates to the ERP market, has at least recently been in the news. Earlier this month, Ellucian agreed to pay $140,000 after the U.S. Equal Employment Opportunity Commission found the company had discriminated against a transgender employee.

Yet even if the vendors issue an update, rolling the fix out to colleges that host their own software is still going to be a “nightmare,” said Joel Dehlin, CEO of the software provider Kuali. If the software was hosted in the cloud, in comparison, vendors could quickly push out an update to all customers, he said.

“Any on-premise vendor is worse off than anybody else,” Dehlin said in an interview. “Unless they thought of this when they were building it 10 years ago, they’re going to have issues.” (Kuali, which is developing its suite of administrative software one module at a time, doesn’t yet offer a student record system.)

Very few colleges run cloud-based administrative software. According to last year’s Campus Computing Survey, which tracks campus technology trends, less than 10 percent of institutions said they host their student information systems in the cloud. Less than 20 percent of respondents said they expect to do so by 2020.

It’s easy to get lost in the technical details about how colleges collect and store preferred names and pronouns, but information officers and people in the ed-tech industry urged colleges to see the personal issue at the heart of the problem. Making an effort to address students based on their preference, they said, can go a long way toward transgender students feeling welcome on campus.

If software vendors are looking at the issue, it would come as welcome but long overdue news, said Jeffrey Butera, associate director for application and web services at Hampshire College.

“A lot of things these vendors do is pretty reactionary and not forward-looking,” Butera said. “We’ve been doing this for years now.”

Hampshire, a private liberal arts college in Amherst, Mass., has found a workaround by creating custom tables in its ERP system, Colleague by Ellucian, to store information the system doesn’t ask for out of the box. The college collects information about students’ preferred names and pronouns in three different ways, Butera said.

The first is through the Common Application, which last month announced it would ask users their “sex assigned at birth” and add an optional free response box. Once students matriculate, the college sends them information packet that includes a form about preferred names and pronouns. Finally, the college’s public directory allows anyone on campus to log in and change their preferences.

“We want to capture that information as early as possible, because that way …, the first time faculty members see the information, they’re seeing the preferred name,” Butera said. “We want faculty to be successful addressing students the way they want to be addressed.”