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PublicationDate: 4/23/96 Summary: Use of the NSLDS for Financial Aid Transcript Purposes Author: PDD - Policy Development Division/PTAS To: Financial Aid Administrators From: Jeff Baker, Director Policy Development Division Student Financial Assistance Programs Subject: Use of the NSLDS for Financial Aid Transcript Purposes Date: April 23, 1996 There have been a number of questions raised by the financial aid community regarding the use of data from the National Student Loan Data System (NSLDS) as a substitute for the regulatory requirement that schools request and obtain a paper financial aid transcript (FAT) for any of its Title IV aid applicants who had previously attended another eligible institution. We are currently in the process of clearing a comprehensive Dear Colleague letter on this subject. That letter should be distributed to the community within the next few weeks. In the meantime, the following Q&As should provide schools with sufficient guidance for them to take advantage of the FAT capabilities of the NSLDS beginning with the 1996-97 processing year. If you have questions on accessing the NSLDS you may call the NSLDS Customer Service Center at 1-800-999-8219, Monday through Friday between the hours of 7:00 AM and 7:00 PM (Eastern Time), federal holidays excluded. Questions regarding the use of data from the NSLDS for FAT purposes should be directed to the Department's SFA Customer Support Inquiry Service staff. They are available Monday through Friday between the hours of 9:00 AM and 5:00 PM (Eastern Time) at 1-800-433-7327. After hours calls will be accepted by an automated voice response system. Callers leaving their name and phone number will receive a return call the next business day. You may FAX an inquiry to the Customer Support Inquiry Service at (202) 260-4199. NSLDS and FAT PROCESSING Questions and Answers April 1996 Q1 Can an institution use data from the NSLDS for purposes of obtaining information previously collected through the paper FAT process? A1 Yes, beginning with the 1996-97 award year, schools may use information from the National Student Loan Data System (NSLDS), including NSLDS information included on a Student Aid Report (SAR) or contained in the NSLDS History section of an Institutional Student Information Record (ISIR), instead of requesting paper FATs as required in 34 CFR 668.19(a)(1) and (2)(i) of the Student Assistance General Provisions regulations. There is an exception to this allowance of the use of the NSLDS for FAT purposes as it applies to mid-year transfer students. Q2 Can a school continue, for the 1996-97 processing year, to request paper FATs in accordance with the current regulations even though the NSLDS is available? A2 Yes, although we would prefer that schools use the FAT capabilities of the NSLDS, we are not, at this time, requiring schools to use the NSLDS to meet the FAT requirements of the regulations. However, all schools even those that will be requesting paper FATs from other schools, are responsible for any default or overpayment information provided on the NSLDS History page of a SAR or in the NSLDS History section of the ISIR. Both of these conditions will result in a 'C' code and comments being included on the SAR and in the ISIR. Q3 What are the responsibilities of a school that receives a request for FAT information from another school or from a student? A3 There are no changes to the responsibilities of a school that receives a request for an FAT from another school or from a student. Institutions that receive FAT requests must be in compliance with the provisions of 668.19(b), (c), and (d) of the Student Assistance General Provisions regulations that relate to providing requested FAT information. Q4 Must a school access the NSLDS again, just prior to the disbursement of Title IV aid, if it had used the information provided on the SAR or ISIR to determine the applicant's eligibility for aid? A4 No, a review of the SAR and ISIR is sufficient to meet the FAT requirements for determining eligibility and award amounts. Note that schools are responsible for responding to any changes to a student's financial aid history they later become aware of. The most common way a school would get new information is when it receives a subsequent SAR or ISIR for a student. NSLDS and FAT PROCESSING page 2 Q5 What are a school's responsibilities and possible liabilities if a student had received Title IV aid not recorded in the NSLDS, or if the student was in default or owed an overpayment, and that information was not available from the NSLDS at the time the SAR and ISIR were produced? A5 A school will only be responsible for the financial aid history information it had obtained from the NSLDS at the time it determined a student's eligibility. A school will not be held liable for any Title IV aid it disbursed to a student even if subsequent information from the NSLDS (or other reliable sources) indicates that the student was not eligible for all or a portion of that aid, unless the school had access to conflicting information that showed a lack of, or reduced eligibility of the student. Once a school becomes aware, through the NSLDS or any other means, that a student is not eligible and/or was not eligible for aid previously disbursed, it must (1) not disburse or deliver additional funds and (2) assist the Department or lender in requiring the student to make arrangements to repay any funds the student was not eligible to receive. Q6 Are schools responsible for reconciling differences between financial aid history information it receives from the NSLDS with data it had previously obtained from paper FATs? Also, does the above reference to the school "having access to conflicting information that would show a lack of, or reduced eligibility of the student" include information the school has in its records from paper FATs collected in prior years? A6 No, schools are not required to reconcile information from previously obtained FATs with data from the NSLDS. Generally a school can rely upon the data in the NSLDS as being accurate and replacing any information it may have received earlier. However, if a school has information that it has reason to believe may be more current or more accurate than that provided by the NSLDS on the SAR or ISIR, it must resolve the conflicting information before releasing additional Title IV aid. Such new information could come from the student, from a previous school, from a lender or guaranty agency, from the Department, or from any other reliable source. Q7 What is reported on the NSLDS Financial Aid History page of the SAR and the NSLDS Financial Aid History section of the ISIR if the attempt to find a match between the Social Security Number reported by the applicant on the financial aid application (FAFSA) and the NSLDS fails? A7 There will be instances when the Central Processing System (CPS) match with the NSLDS will not result in FAT data being returned to the CPS for inclusion on the SAR and in the ISIR. When this happens the NSLDS Financial Aid History page of the SAR will be blank. Similarly, there will be no data in the NSLDS Financial Aid History section of the ISIR. NSLDS and FAT PROCESSING page 3 Q8 If there is no NSLDS Financial Aid History page printed or no data included in the NSLDS Financial Aid History section of the ISIR, can the school assume that the student did not receive any Title IV aid? A8 When no NSLDS data are returned, both the SAR and the ISIR will contain one of two comments and comment codes that explain the reason for the lack of NSLDS FAT information. The responsibilities of the school, as discussed below, will depend upon which comment code is reported. Q9 What are the school's responsibilities when the reason no NSLDS FAT information was returned to the CPS is explained by Comment Code #140? A9 Comment Code #140 will be included on the SAR and in the ISIR in one of two situations: (1) When the CPS match of the applicant's SSN with the NSLDS does not find any corresponding records in the NSLDS with the same social security number, and (2) when the match finds NSLDS records that match the reported SSN and either the first three letters of the first name or the date of birth also match, but those records contain no relevant Title IV aid such as a prior year's Pell Grant or a closed loan. The text for Comment Code #140 is as follows: Your application record was matched successfully with the National Student Loan Data System (NSLDS). The NSLDS confirmed that your social security number is not associated with any previous financial aid history. If the reason there were no NSLDS FAT data returned to the CPS is explained by Comment Code #140 the school can continue to process the application assuming that the student had not received any relevant Title IV aid. Q10 What are the school's responsibilities when the reason no NSLDS FAT information was returned to the CPS is explained by Comment Code #138? A10 Comment Code #138 will be included on the SAR and in the ISIR when the CPS match with the NSLDS finds a record in the NSLDS with the reported SSN but neither the first three letters of the first name nor the date of birth match with the CPS applicant record. When Comment Code #138 is reported on the SAR and in the ISIR, a 'C' code will also be included. The text for Comment Code #138 is as follows: We matched your social security number (SSN) with the National Student Loan Data System (NSLDS), but the name on the NSLDS record did not match the name you reported on your student aid application. Therefore this SAR does not contain the financial aid history that is associated with your reported SSN. You should review both your name and SSN as reported, and work with your FAA to resolve discrepancies. NSLDS and FAT PROCESSING page 4 When the reason there were no NSLDS FAT data returned to the CPS is explained by Comment Code #138 the school must determine if the existing NSLDS record is that of the applicant and, if so, must use the information in the NSLDS when determining eligibility for Title IV aid. The school should access the NSLDS directly (the most efficient way would be to utilize the on-line access through the TIV-WAN as described in item #5 of Q&A #23) to determine if the matched SSN in the NSLDS is the selected applicant. The school must make a determination of whether or not the record in the NSLDS is the applicant's by considering information it has about the applicant and the details of the data contained in the NSLDS. For example, if the name of the student as reported on the SAR or ISIR is a nickname and the name in the NSLDS is the applicant's actual name, the school should use the information in the NSLDS when determining the student's Title IV eligibility. Similarly, if the school has information that the applicant attended XYZ University during the 1995-96 award year and the NSLDS record shows that Title IV aid was received at XYZ University during that same award year, it may assume that the data in the NSLDS belong to the applicant. In many cases, the school will need to discuss the discrepancy with the applicant before making its final decision. If, as a part of the process whereby the school determines that the data in the NSLDS is that of the applicant, it also determines that the lack of a full match is that the student did not complete the application properly (such as using a nickname or reporting the wrong date of birth) it should instruct the applicant to make any necessary corrections to the CPS record, using the SAR or ISIR correction process. However, the school need not await the results of those corrections before using the reviewed data in the NSLDS for determining the student's eligibility. If the school, after reviewing the data in the NSLDS for the record with the same social security number of the applicant, determines that it is not the applicant's financial aid history, it can continue to process the application assuming that the student had not received any relevant Title IV aid. In this instance, while not required of the school, it may want to contact the agency that submitted someone else's information to the NSLDS using the applicant's social security number. The Department is currently attempting to facilitate the process whereby schools that discover problems in records contained in the NSLDS could refer them to a central source for resolution. Q11 Will updated NSLDS information be included with subsequent SARs and ISIRs? NSLDS and FAT PROCESSING page 5 A11 Yes, anytime a SAR or ISIR is created (correction update, request for a duplicate, etc.) the CPS record will be matched against the NSLDS to get the latest financial aid history information for inclusion on the SAR or in the ISIR record. As with any new information available, the school must review the FAT information on a subsequently received SAR or ISIR to determine the student's eligibility for Title IV aid. Q12 How does a school document that it obtained NSLDS FAT information from a SAR or ISIR? A12 A school must maintain documentation of its receipt of FAT information, including indicators that no data were reported, from the NSLDS. Documentation should be maintained for NSLDS information obtained from a SAR by retaining the hard copy of the SAR even if the NSLDS Financial Aid History page is blank in order to show that no data were reported from the NSLDS. Documentation should be maintained for NSLDS information obtained from an ISIR as part of the normal retention of the ISIR. Schools should be sure to save the NSLDS section of the ISIR even if it is blank, as this will provide documentation that the NSLDS did not return any information. Q13 Must the school make certain that any default statuses or other negative information contained in the NSLDS be cleared in the NSLDS before it can disburse Title IV student aid? A13 No, if the school can document that the student is eligible for Title IV aid despite such negative information contained in the NSLDS, it may award and disburse aid. An example would be if the NSLDS Financial Aid History page of the SAR or ISIR shows that the student has a defaulted loan, but the school has obtained documentation from the holder of the loan that the borrower had made "satisfactory arrangements to repay". This guidance is consistent with current requirements regarding the resolution of problems reported to a school by the CPS on a SAR or ISIR. Q14 Please describe what a mid-year transfer is. A14 For purposes of this discussion, a mid-year transfer is an applicant for Title IV aid at one school who attended another eligible institution during the same award year. Such an applicant could have attended the previous school in an earlier term or during the summer prior to the beginning of the school's academic year. While a mid-year transfer usually is a student who will be new to the school, it is possible that some of the school's continuing students attended another school during an earlier portion of the award year (e.g., during the summer), and thus, would be considered a mid-year transfer for purposes of Title IV FAT requirements. Q15 Earlier in these Q&As it was stated that sufficient FAT information for mid-year transfers could not be obtained from the NSLDS and that paper FATs might still be required. Why is this so? NSLDS and FAT PROCESSING page 6 A15 Because of the timing of submission of data into the NSLDS. Loan data are submitted only once each month and, while Pell Grant payment information is submitted from the Department's Pell Grant payment system weekly, it does not always receive data from schools on a timely basis. Therefore, it is very likely that critical grant and loan information may not be in the NSLDS at the time the new school is determining award amounts for a student who is entering after attending another school in the same award year. Q16 If a school cannot rely upon the NSLDS FAT information for mid-year transfers what should it do to get the needed FAT information? A16 The most obvious method would be for the school to comply with paragraphs (a) and (b) of Section 668.19 of the regulations, by determining if the student attended another school during the award year and, if so, requesting financial aid transcript information from that school. Q17 Since it may be that the only reason one school needs to request FAT information directly from another school is to obtain information dealing with the current award year, may such a request only include asking for current year information? A17 Yes, if the requesting school has decided that it will use the FAT information it had from the NSLDS (from a SAR or ISIR for example) to determine eligibility, but needed updated information for the current award year, it may limit its request to the previous school to only current year information. A school that receives a clearly described request for current year information only will be considered to be in compliance with the regulations when it provides that information. The current year items that must be included are; the student's name and social security number, and for the award year for which the transcript is requested, the student's scheduled Pell Grant, the amount of Pell Grant funds disbursed, the amount of Perkins loan disbursed; and, the amount of, and period of enrollment for, the most current loan made to the student under the FFEL and Direct Loan programs. Q18 Are there any other possibilities for schools to consider in exercising their responsibility to enforce student eligibility and program award maximum provisions for mid-year transfers? Might there be different possibilities depending upon whether the student attended during a summer preceding an academic year as opposed to those that actually attended during an earlier portion of a school's academic year (e.g., the Fall term)? A18 We are currently working on other options schools may use to meet the FAT requirements for mid-year transfers. Details will be provided in the forthcoming Dear Colleague letter. |