Publication Date: June 12, 2007
Author: Jeff Baker, Director Policy Liaison and Implementation, Federal Student Aid
Summary: Access to NSLDS – Update #4
Posted on 06-12-2007
This message is the fourth update to the community related to our April 17, 2007, decision to suspend NSLDS web access for certain program participants.
As noted in earlier updates, we have developed a plan to reinstate, on a phased-in basis, NSLDS web access to some of those entities whose access had been suspended. We began this process with the FFEL guaranty agencies and then with FFEL lenders. Within the next few weeks we expect to extend reinstatement to State Grant Agencies and address the issue of access to NSLDS for entities involved in eligible lender trustee arrangements.
We understand that some FFEL Program participants may be concerned about the impact of the suspension and the phased-in reinstatement on lenders’ ability to advise and counsel borrowers who may be interested in applying for consolidation loans this month, in order to “lock-in” a lower interest rate. However, because the statutory formula used to calculate consolidation loan interest rates includes a rounding-up factor, the upcoming modest increase in the variable interest rates (less than one-tenth of one percent) will, for most student borrowers, result in the same rate on a new consolidation loan whether that loan is made prior to or after July 1, 2007. Thus, at least for interest rate purposes, there is no compelling reason why these borrowers should consolidate before the end of June or, for that matter at all.
In the past, FFEL Program participants have used their NSLDS access to gather information about the borrower in connection with the completion of the consolidation application. However, under our revised access rules, a lender, that does not hold the borrower’s loan, may only access a borrower’s NSLDS record after it has received a completed and signed consolidation loan application from the borrower.
Borrowers, using their Federal Student Aid PIN, may obtain the loan detail information needed to complete a consolidation loan application by accessing NSLDS on the web or through voice response at our 1-800-4FEDAID number. Of course, the borrower may never provide his or her PIN to anyone else, including a lender.