| DCLPublicationDate: 8/1/2000 DCLID: 00-L-223 AwardYear: Summary: This letter notifies guaranty agencies, lenders, and servicers in the FFEL program of new Department procedures for processing enrollment information about FFEL borrowers. August 2000 G-00-327 L-00-223 PurposeThis letter notifies guaranty agencies, lenders, and servicers in the FFEL program of new Department procedures for processing enrollment information about FFEL borrowers. These new procedures will reduce the amount of redundant data received by lenders and lender servicers and simplify the process FFEL participants use to monitor the enrollment status of student borrowers. Dear Partner: Background Information about the enrollment status of students who have borrowed from the Federal Family Educational Loan (FFEL) and Direct Loan programs is currently obtained from schools through the Student Status Confirmation Report (SSCR) process administered by the National Student Loan Data System (NSLDS). On a schedule chosen by the school, NSLDS sends each school an electronic SSCR roster containing records for all borrowers who, according to the most recent data in NSLDS, attend that school. Schools are responsible for confirming and updating the enrollment status of each borrower on the SSCR roster and for returning the updated roster to NSLDS.*1* Every week NSLDS sends the enrollment data obtained from schools to guaranty agencies (GAs) for borrowers of loans they guaranteed or hold under the FFEL Program. The GAs then forward enrollment information to the lenders or lender servicers responsible for servicing individual loans. Guaranty agencies have up to 60 days to forward any updated enrollment information they receive from NSLDS to lenders or servicers. Similarly, NSLDS sends enrollment information it receives about Direct Loan borrowers to the Direct Loan Servicing Center. Pilot Project: During the past few months, we have developed a pilot program in which NSLDS sends enrollment information directly to certain FFEL lenders and lender servicers each week (as it does to the Direct Loan servicer) at the same time it sends the same information to GAs. Under the pilot lenders and lender servicers receiving enrollment information directly from NSLDS no longer receive the same enrollment information from guaranty agencies. The pilot aims to test the concept of direct transmission and to measure its benefits. It uses the National Council of Higher Education Loan Programs (NCHELP) standard, Common Account Maintenance transactions, to exchange data between NSLDS and pilot lenders and lender servicers. The pilot has been well received by participants and, as expected, has led to quicker delivery of enrollment information to those who need it for loan servicing. This new procedure has prevented many so-called technical defaults by documenting when a borrower is still enrolled. On the other hand, it increases compliance and responsibility when it places borrowers into grace and repayment status in a more timely manner. The pilot has also shown the opportunity to reduce costs for all parties. As a result, we intend to make this pilot process permanent and to offer it to other large lenders and lender servicers beginning later this year. ActionsIn order to reduce redundant enrollment status reporting, we will consider a participating guaranty agency to have met the regulatory requirements of 34 CFR 682.401(b)(20) when the agency is informed that NSLDS has reported enrollment information directly to a lender or lender servicers.*2* Therefore, GAs should not forward enrollment information they receive from NSLDS to lenders and lender servicers who are already receiving such information directly from NSLDS. This will be the case even when the information provided by NSLDS consists only of changes to borrowers enrollment status. We will identify to each guaranty agency those lenders and lender servicers that receive information directly from NSLDS so that agencies can exclude NSLDS information from their normal reporting to those parties. Finally, since much of the enrollment information NSLDS receives from schools simply confirms a previously reported enrollment status, NSLDS will offer to guaranty agencies, lenders, and lender servicers the option of receiving only changed information. Sincerely, Katrina Turner, Director Partner Services Financial Partners F. Lynn Alexander, Director National Student Loan Data System, CIO Jeff Baker, Director Program Development, Analysis [[*1* Of course, many schools use a third-party servicer to handle all aspects of their SSCR responsibilities. *2* 34 CFR 682.401(b)(20), in general requires guaranty agencies to report enrollment information to the current holder of the loan within 60 days of when any change in the student's enrollment status is reported to the agency.]] |