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 students 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 students 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 students 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 schools application. The financial aid administrator is responsible for ensuring the "consistency of information" at the school regarding a students 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 students previous school has since closed, the current school can request the Departments 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 Departments 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 schools 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 students 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 students 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 students period of attendance has expired and the previous school no longer has the students 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 stamps 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 STUDENTS 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 students parents on the students behalf. - THE STUDENTS 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 students 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 students 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 students signature is optional. However, the transcript must include the students name and Social Security Number. [[Part II]] Part 2 of the transcript gives the students 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 students 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. |