Maintained for Historical Purposes

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

Use of the NSLDS for Financial Aid Transcript Purposes

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.

Last Modified: 08/16/1999