Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Institutional Eligibility and Administrative Requirements - Financial Aid Transcripts and the NSLDS

AwardYear: 1996-1997
EnterChapterNo: 3
EnterChapterTitle: Institutional Eligibility and Administrative Requirements
SectionNumber: 4
SectionTitle: Financial Aid Transcripts and the NSLDS
PageNumbers: 65-74


Generally, when a student transfers from one school to another, the
new school must receive a financial aid history from the previous
schools the student has attended before it disburses Federal Pell
Grant, Direct Loan, FFEL, or Campus-Based funds to the student or
certifies a PLUS Loan application. Exceptions to this rule are
discussed later in this section.

[[Purpose of obtaining a financial aid history]]
The financial aid history is needed to monitor two aspects of student
eligibility. First, it tells the financial aid administrator how much aid
a transfer student has received from the SFA Programs at other
schools. By using this information, the aid administrator can make
sure that the student does not receive an overpayment. Most of the
SFA Programs have annual maximum limits; the loan programs also
have cumulative maximum limits, as discussed in Chapter 2.*1*
Second, the financial aid history is used to prevent a student from
receiving any SFA aid if he or she is in default or owes a repayment
on an SFA grant or loan.

[[NSLDS alternative]]
[[NEW]]
In the past, schools were required to obtain a student’s financial aid
history by requesting a financial aid transcript (FAT) from the
previous schools the student attended. As an alternative, final
regulations published on December 1, 1995 permit schools to obtain
a student’s financial aid history through the National Student Loan
Data System (NSLDS) upon notification from the Department that
the NSLDS may be accessed. The Department will be notifying
schools through a "Dear Colleague" letter to be published in the
Summer that the NSLDS may be used as an alternative to requesting
a paper FAT for the 1996-97 award year, and how schools are to use
the NSLDS for this purpose. An official notice in the Federal
Register will be published soon after.

At this time, although schools are encouraged to use the NSLDS, it is
not required. The NSLDS may be used as an ALTERNATIVE to the
paper FAT. Schools may still request a student’s financial aid history
through a paper FAT, and a school that receives a request for a paper
FAT must still complete and return the FAT to the requesting school.
There are no changes to the requirements for requesting or receiving
a paper FAT.

NSLDS

[[NEW]]
The NSLDS is a database containing certain federal financial aid
history information on SFA recipients. The NSLDS contains the
financial aid history information that a school will need to determine
if a student is eligible to receive SFA funds. This includes
information on all SFA loans, payment information for the Pell Grant
Program, and overpayment information for the Pell Grant, FSEOG,
and Federal Perkins Loan programs. In addition, the NSLDS will
simplify the Student Status Confirmation Report processing, track
loan history information, calculate default rates, and provide a
database for research.

[[Obtaining information through the NSLDS]]
There are five methods by which a school can obtain financial aid
history information from the NSLDS

- Use the NSLDS Financial Aid History page of Part 1 of the
Student Aid Report (SAR)

- Use the NSLDS Financial Aid History section of the Institutional
Student Information Record (ISIR) sent to a school through the
Title IV Wide-Area Network (TIV-WAN)

- Request an electronic file of financial aid history information for
specific students through the TIV-WAN

- Request a print file of financial aid history information for specific
students through the TIV-WAN

- Log on to the NSLDS directly and access the NSLDS data on-line
for an individual student

For more detailed information on the NSLDS, schools should refer to
the upcoming "Dear Colleague" letter.

REQUESTING A PAPER FAT

[[Finding out if the student has attended other schools]]
If a school does not use the NSLDS to access an applicants financial
aid history, it must determine if a student who applies for aid from
the SFA Programs previously attended other eligible schools. The
school must make an active effort to find out if the student
previously attended other schools. For instance, most schools
routinely ask any prospective student to state their previous academic
experience, either in the course of an admissions interview or on the
school’s application. The financial aid administrator is responsible
for ensuring the "consistency of information" at the school regarding
a student’s eligibility (see Section 2), and therefore must have a
system to exchange such information with the admissions office.

If the school discovers that the student did attend another eligible
school, and does not obtain financial aid history information from the
NSLDS, the school is required to obtain a paper FAT from that
school (or schools, if the student attended more than one eligible
institution). The FAT must be sent directly from the previous school
to the current school (not to the student). The student may request
that a transcript be sent, or the current school may make the request.
In either case, the current school must document that a request was
made. (Neither the school nor the student is required to request a
transcript from a foreign school.) Note that although a student may
make the request that a transcript be sent, it is the school, not the
student, that is REQUIRED to obtain the FAT.

If it appears that the student’s previous school has since closed, the
current school can request the Department’s assistance by writing to
the following address:

Student Financial Aid Information Center
Financial Aid Transcript Request
P.O. Box 4129
Iowa City, IA 52244

The current school will receive one of the following responses from
the Department’s SFA Information Center:

- No transcript is required for this student because his or her school
has closed, is no longer eligible to participate in the SFA
Programs, or does not appear to be actively participating in the
SFA Programs,

- The transcript must be requested directly from the school, which is
currently in operation and is participating in the SFA Programs
(the school’s current name and address will be included in this
response), or

- The request did not provide the needed information; the school
must resubmit the request, providing the name of the student, the
name and address (city, state) of the previous school, and the
specific years of attendance in question.

If no transcript is required, either because the previous school is
foreign, has closed, or does not participate in the SFA Programs, the
school must use any information from the NSLDS to ensure that the
student in question has not defaulted on an SFA loan. Also, to
prevent an overaward for the current award year, the school should
secure the student’s signed statement of the amounts of SFA that
were awarded and disbursed to him or her for the current award year.

PAYMENT AND CERTIFICATION OPTIONS

[[Pell and campus-based programs]]
Once the school has requested the FAT, the school may pay the
student under the Pell Grant and Campus-Based programs for one
payment period only. If a school exercises this option, after it
receives the transcript the school must make any necessary
adjustments to the student’s aid package before making another
payment. Also, the school must have documentation that the FAT
was requested. The school is not liable for the amount of the first
payment if the school never receives the FAT (or if the transcript
arrives and shows that the student is ineligible). However, the school
may not make any subsequent payments to the student without
receiving the transcript, and the school must attempt to collect any
overpayment from the student.

[[Federal Stafford]]
After requesting the transcript, the school may certify a Stafford loan
application for the student, but the school may not release the
proceeds from the loan until after the transcript is received. If the
school does elect to certify a Stafford loan application and then
receives an FAT that shows the student to be ineligible for payment,
the school must return the loan proceeds to the lender. In addition,
please remember that the school may not hold the loan proceeds for
more than 45 days--If the FAT(s) still have not arrived at the end of
the 45 days, the school must return the loan proceeds to the lender.

[[PLUS]]
Under General Provisions regulations, the school may not certify a
PLUS application until the school has received the FAT(s).

[[Direct Loan]]
After requesting the transcript, the school may originate a Direct
Loan award for the student, but the school may not disburse funds to
the student until the transcript is received.

[[Payment without transcript: no SFA funds received, records
unavailable]]
In several cases, the regulations permit the school to pay a transfer
student without receiving an FAT. The school may pay the student
as usual if the previous school certifies that the student did not
receive SFA funds or certifies that the record retention period for the
student’s period of attendance has expired and the previous school
no longer has the student’s records. (See Section 8 for
recordkeeping requirements). The new school may also pay without
a transcript if the new school discovers that the previous school has
closed and the requested information is not available.

SENDING A TRANSCRIPT

[[Reasons for not sending a transcript]]
When a school receives a request for an FAT, the school must
promptly provide the requested information on the transcript. If the
student did not receive assistance from the SFA Programs, or
attended the school so long ago that the record retention period has
lapsed and the school no longer has those records, the school must
notify the requesting school in writing that a transcript will not be
sent and specify the reason. (See Section 8 for recordkeeping
requirements.)

[[Listing other schools attended]]
If the school sending the transcript has any information indicating
that the student had attended any other schools, it must include the
names of those schools on the transcript (or in the written response,
if the school is not required to send a transcript). When the school
requesting the transcript finds that the student has attended another
school, it must also request a transcript from that school.

A school cannot withhold a FAT for a student who owes a debt to the
school (such as unpaid tuition and fees, or a library fine or parking
fine). However, the Department does not discourage the withholding
of academic transcripts in compliance with applicable state laws.

[[Signature requirement]]
An FAT must be signed by the person the school authorizes to sign
transcripts and other financial aid documents; the FAT does not need
to be certified. Using a signature stamp to validate transcripts is also
acceptable if the stamp’s use is restricted for use by specific financial
aid personnel. In either case, a school is liable for any inaccurate
information provided. Note that a school may accept a facsimile of
the transcript, provided it is properly completed and signed.

REQUIRED INFORMATION ITEMS

[[Required items]]
The transcript must include

- THE STUDENT’S NAME AND SOCIAL SECURITY
NUMBER.

- WHETHER THE STUDENT IS IN DEFAULT ON AN NDSL,
OR PERKINS LOAN, OR OWES A REPAYMENT ON A PELL
GRANT OR FSEOG AT THAT SCHOOL. The school should
always be able to tell from its own records if the student is in
default or owes a repayment for any of these programs.

- IF KNOWN, WHETHER THE STUDENT OWES A
REPAYMENT ON AN SSIG OR IS IN DEFAULT ON A FFEL
AT THAT SCHOOL, OR IS IN DEFAULT ON A DIRECT
LOAN OR CONSOLIDATION LOAN. In many cases, the
guaranty agency or the state agency for SSIG will have informed
the school if the student is in default on a FFEL or Consolidation
Loan, or if he or she owes a repayment on an SSIG obtained at
that school.

- THE TOTAL AMOUNT OF ANY LOANS RECEIVED BY THE
STUDENT UNDER THE PERKINS AND NDSL PROGRAMS
AT THAT SCHOOL.

- WHETHER THE STUDENT HAD AN OUTSTANDING
BALANCE ON AN NDSL (EITHER DEFENSE OR DIRECT)
FROM THAT SCHOOL ON JULY 1, 1987. This will affect
whether the student may be considered a new borrower in the
Perkins Loan Program. New Perkins borrowers are given a nine-
month grace period, rather than the six-month NDSL grace period
and are eligible for a deferment or cancellation for volunteer
service in the Peace Corps.

- THE AMOUNT AND PERIOD OF EACH LOAN MADE TO
THE STUDENT UNDER THE FFEL AND DIRECT LOAN
PROGRAMS AT THAT SCHOOL. This includes PLUS loans
taken out by the student’s parents on the student’s behalf.

- THE STUDENT’S SCHEDULED PELL GRANT AND THE
AMOUNT OF PELL GRANT FUNDS DISBURSED TO THE
STUDENT FOR THE CURRENT AWARD YEAR.

[[SEOG]]
Schools do not have to report information on FSEOG awards on the
transcript because annual FSEOG maximums apply only to the
amount that the school may award during an award year, not to how
much the student may receive from multiple schools.

[[Information about aid at other schools attended]]
When responding to an FAT request, a school is not required to
include information about the amount of aid awarded at other
schools or the student’s default or overpayment status at other
schools. However, the school sending the transcript must list these
other schools on the transcript, and the new school must make sure
that it has received transcripts from those schools.

A school may decide to provide additional information such as types
of work-study or cooperative-education study performed,
institutional scholarships awarded, or Pell awards received in prior
years. A school may also include in the transcript any information
about a student’s eligibility for, or receipt of, financial aid if the
school considers that information useful to the school the student will
be attending.

MODEL TRANSCRIPT

Although there is no official form for the required FAT, the National
Association of Student Financial Aid Administrators (NASFAA) has
developed an FAT form that schools may use as a model (see the
following pages). Financial aid administrators may receive a copy
by writing to NASFAA at 1920 L Street N.W., Suite 200,
Washington DC 20036.

[[Part I]]
Part 1 of the transcript contains identifying information about the
student and may be filled out either by the student or by the
requesting (current) school. The student’s signature is optional.
However, the transcript must include the student’s name and Social
Security Number.

[[Part II]]
Part 2 of the transcript gives the student’s financial aid history,
as completed by the financial aid office at the prior school.
SECTION A gives information about other schools the student
attended. SECTION B is used when the school is not providing the
student’s financial aid history either because the student did not
receive SFA funds at the school or because the record retention
period has expired and the records are no longer available.
SECTION C contains several statements regarding the SFA funds
received by the student, including outstanding loan balances,
repayments owed, and defaults. The school should check all
statements that are true for the student in question. SECTIONS D
AND E are used to report amounts of aid received from the SFA
Programs. SECTION F is the signature block for the school sending
the transcript.

[[The NASFAA model financial aid transcript on pages 3-73 and
3-74 is currently unavailable for viewing. Please reference your
paper handbook for additional information.]]


*1* Loan limits are also discussed in chapters 6 and 10.