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(Loans) Subject: Loan Servicing Information - Direct Loan Transfer Initiative Update

Posted Date:January 13, 2011

Author: Jana Hernandes, Service Director, Operations, Federal Student Aid

Subject: Loan Servicing Information - Direct Loan Transfer Initiative Update

We are pleased to report the successful transfer of approximately 1.2 million William D. Ford Federal Direct Loan (Direct Loan) Program borrower accounts to new federal loan servicers by the end of December 2010. As explained in a November 23, 2010 Electronic Announcement on the Information for Financial Aid Professionals (IFAP) Web site, the purpose of this transfer initiative was to begin positioning student and parent borrowers who had Direct Loans assigned to the Direct Loan Servicing Center (ACS) and additional Direct Loans and/or Federal Family Education Loan (FFEL) Purchased Loans assigned to FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and/or Sallie Mae to have one federal loan servicer for all of their federally-owned loans. Borrowers receive correspondence from the new servicer upon completion of the transfer process.

In the majority of cases, this transfer initiative will result in all of a student or parent borrower’s federally-owned loans being serviced by one federal loan servicer. In a very small number of cases, a borrower may still have more than one servicer. For borrowers with more than one servicer, we will continue our transfer work until all of a borrower’s federally-owned loans are serviced by one servicer. We plan to complete the next round of transfers of this nature by mid-March of this year.

In the November 23rd announcement, we explained that federal loan servicers report loan information to the National Student Loan Data System (NSLDS) on a weekly basis. At this time, we have identified two issues related to the data transfers that will temporarily impact the accuracy of some borrowers’ loan information in the NSLDS. In each case, the impact on borrowers is very limited; however, we want to inform the community of what has occurred and what we are doing to resolve the situations.

Incorrect Loan Status and Balance Information for Some Transferred Loans in NSLDS

Data errors occurred that resulted in some borrowers’ transferred Direct Loans being incorrectly entered into the NSLDS with a loan status of paid-in-full (PF) and a zero ($0) outstanding principal balance (OPB) and outstanding interest balance (OIB). These loans do not have zero balances. We regret the confusion that affected borrowers and schools may experience related to the data errors.

We have removed the incorrect information from the NSLDS and reinstated the correct loan status and balance information in the NSLDS. Now, we will focus on creating system-generated Institutional Student Information Records (ISIRs) containing NSLDS Loan Detail reflective of the correct loan status and balance information and pushing them to the Student Aid Internet Gateway (SAIG) mailboxes of schools that previously received 2010-2011 and 2011-2012 ISIRs reflective of the incorrect information. The number of borrowers for whom this occurred is approximately 1,000.

We plan to complete this work as part of our normal processing schedule on Tuesday, January 18, 2011. Schools will be able to identify the affected ISIRs through one of the following methods:
  • The ISIRs will be sent under the IGSG11OP (for 2010-2011 ISIRs) or IGSG12OP (for 2011-2012 ISIRs) message class.

  • The ISIRs will include an NSLDS Postscreening Reason Code = 99 and a CPS processed date of January 18, 2011 – January 21, 2011.

If a school has questions about this issue, it should contact the NSLDS Customer Support Center at 800/999-8219. The school may also e-mail

Delayed Availability of Some New Loan and/or Subsequent Loan Disbursement Information in NSLDS

Timing issues occurred with the data transfer for a limited number of borrowers (approximately one percent of the 1.2 million accounts transferred) that will result in a delay in making information about some new loans and/or subsequent loan disbursements for these borrowers available in the NSLDS. We regret the inconvenience that affected borrowers and schools may experience related to this data transfer delay.

We are in the process of resolving this issue and will inform the community as we complete our work. In the meantime, information about an affected borrower’s new loans and/or loan disbursements is accurately reflected in the Common Origination and Disbursement (COD) System and accessible via the COD Web site.

In addition, the COD School Relations Center and all of our federal loan servicers have detailed information for all affected borrowers. Schools and borrowers can contact the appropriate customer service center for assistance with questions as follows:

  • If a school has a question about a registered student, including a transfer student, who is affected by this data transfer delay, it should contact the COD School Relations Center at 800/848-0978. The school may also e-mail
  • If a student or parent borrower affected by this data transfer delay has a question about his or her loan, the borrower should contact his or her new federal loan servicer as outlined in the letter the servicer sent upon completion of the transfer process. Contact information for the appropriate servicer also can be found on the Loan Servicing Centers for Schools Contact Information page on the IFAP Web site.

    Note: If a borrower does not know the identity of his or her new servicer, a school can assist by looking up this information via the COD Web site or the NSLDS Professional Access Web site. In addition, a new School Portfolio Report (SCHPR1) is now available to schools by request under the Report Tab on the NSLDS Professional Access Web site and is delivered via the SAIG. For complete information about this new report, refer to NSLDS Newsletter 29 on the IFAP Web site.

Contact Information
We appreciate the community’s ongoing support of our approach to servicing federally-owned loans and its patience and understanding related to the two issues explained in this announcement. Schools and borrowers with questions should contact the appropriate customer service center as explained above.

Last Modified: 01/12/2011