Maintained for Historical Purposes

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

Student Eligibility and Financial Need - The Student's Financial Aid History

AwardYear: 1997-1998
EnterChapterNo: 2
EnterChapterTitle: Student Eligibility and Financial Need
SectionNumber: 2
SectionTitle: The Student's Financial Aid History
PageNumbers: 39-52


Generally, when a student transfers from one school to another, the
new school must receive a financial aid history for the student before
it disburses or delivers SFA funds. 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 Chapters 6, 10,
and 11. 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]]
In the past, a school was required to obtain a student's financial aid
history by requesting a paper financial aid transcript (FAT) from the
previous schools the student attended. Beginning in 1996, schools
have also been permitted to obtain student financial aid histories
through the National Student Loan Data System (NSLDS), a
comprehensive database containing select financial aid history
information. Schools were notified that the NSLDS could be
accessed for this purpose in "Dear Colleague" letter GEN-96-13,
published July 1996. (Notification was also published in the Federal
Register on September 16, 1996.) This "Dear Colleague" letter also
provides detailed information on how to access and use the NSLDS
as an alternative to the FAT process.

Schools use the NSLDS for a number of other functions besides
accessing financial aid histories, such as reporting the status of
Perkins Loans and completing required Student Status Confirmation
Reports (SSCRs). The Department has incorporated the SSCR
function into the NSLDS beginning March 1997. (See GEN-96-17
for more on SSCR.) All schools that participate in the SFA Programs
must enroll in NSLDS to use the SSCR function, even if they choose
not to use the database to obtain financial aid histories. In this
chapter, we will only be discussing the use of NSLDS to fulfill the
financial aid history requirement.

[[NSLDS optional]]
Presently, although schools are strongly encouraged to use the
NSLDS for financial aid histories, they are not required to do so. The
NSLDS may be used as an ALTERNATIVE to the paper FAT.
Schools may still request a student's 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 Match

[[All schools responsible for default and overpayment information
from NSLDS]]
A student's application information is matched against the NSLDS
database, and the results of this match are provided on output
documents on the NSLDS Financial Aid History page and in the
FAA Information Section. All schools are responsible for resolving
any default or overpayment problems reported through the NSLDS
match, even if they are not using NSLDS for financial aid histories.
As is the case for other matches, problems that must be resolved are
indicated by a "C" next to the student's EFC. The school must resolve
these eligibility problems before disbursing aid. (See Section 1 for
more on resolving default and overpayment situations.)

[[Partial match]]
If the student's SSN is in the database, but neither the first name nor
date of birth matches those the student reported, the output document
will have a comment explaining that the financial aid history is not
provided because the name and date of birth do not match, and
directing the student to work with the school to resolve any
discrepancies (Comment 138). This partial match may result when
students use nicknames. When there is a partial match, the output
document will not have the financial aid history or any information
on defaults or overpayments associated with the reported SSN, and
will have a "C" code. A partial match REQUIRES RESOLUTION;
otherwise the school will not have information from the Department
on defaults and overpayments.

[[Obtaining information through the NSLDS]]
If the student originally reported incorrect information, the school
can have the student submit correct information; the student's
information will then be sent through the match again. The school
can also access NSLDS directly using the reported SSN to determine
if the NSLDS record belongs to the applicant. The school determines
whether the NSLDS record is the student's by considering whether
other information it has about the student is consistent with the
NSLDS data. For example, if the name reported on the application is
a nickname and the name in NSLDS is the actual name, the school
should determine that the record is the student's and use the NSLDS
data in determining the student's eligibility. Or if the school knows
that the student attended a particular school in a particular award
year, and NSLDS shows aid received at the school in that year, the
school may assume that the record belongs to the student. If the
school discovers the discrepancy is due to the student misreporting
the name or date of birth on the application, it should have the
student make a correction. However, the school may use the NSLDS
record to determine the student's eligibility; it does not need to wait
for the corrected data to be reported.

If the school determines that the financial aid history associated with
the student's SSN does not belong to the student, it may assume that
the student has no relevant financial aid information. The school (or
the student) may also contact the agency that reported someone else's
data using the student's SSN, but is not required to do so. See "Dear
Colleague" Letter GEN-96-13 for further discussion.

CHECKING PREVIOUS ATTENDANCE

[[Checking required if using FAT]]
A school not using NSLDS to obtain an applicant's financial aid
history 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 school's
application. The financial aid administrator is responsible for
ensuring the "consistency of information" at the school regarding a
student's eligibility (see Chapter 3, Section 2), and therefore must
have a system to exchange such information with the admissions
office.

[[Checking not required for NSLDS]]
A school using NSLDS for financial aid histories is not required to
determine if the student previously attended other schools. However,
in some cases a school using NSLDS will still want to contact
previous schools directly, and so will need to determine if the student
has attended other eligible schools. For example, if the student
begins enrollment during the award or academic year, the output
document might not have a completely current financial aid history,
and the school might decide to contact previous schools for the
current information. To do so, it will need to determine what schools
(if any) the student previously attended.

USING NSLDS FOR FINANCIAL AID HISTORIES

There are five methods by which a school may obtain financial aid
history information from the NSLDS. The school may

- use the NSLDS Financial Aid History page of Part 1 of the SAR;

- use the NSLDS Financial Aid History section of the 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; or

- log on to the NSLDS directly and access the NSLDS data on-line
for an individual student.

An output document will contain the NSLDS financial aid history
information only if the student's identifying information matches the
database and there is relevant information for the student in the
database. The financial aid history will not be provided on a rejected
application. The school can check the NSLDS results flag reported in
the FAA Information Section to determine why an application has no
NSLDS financial aid history.

[[Partial match]]
A results flag of "2" indicates that the SSN was found in the NSLDS
database, but neither the name nor the date of birth matched what the
student reported. A school must resolve this partial match situation
(see page 2-40).

[[No history]]
A results flag of "3" indicates that the student's SSN is not in the
database; therefore, the student has no financial aid history. The
student will also receive a comment on the output document
explaining that NSLDS confirmed that the SSN is not associated
with any previous financial aid history (Comment 140).

[[No relevant history]]
A results flag of "4" indicates that the student's SSN is in the
database, but there is no relevant data to report. For example, no data
would be reported if the only information for a student was for a Pell
Grant received in the previous year, because that information is not
needed to determine the student's eligibility for aid for the current
year. The student will receive a comment explaining that his or her
record was matched with NSLDS, but no information was found to
print on the NSLDS page (Comment 137).

[[Changes to NSLDS data]]
Once the school has received the financial aid history through
NSLDS, it is not required to check for changes to the data before it
disburses or delivers funds to the student. However, if the school
learns (from NSLDS or another source) that the student was not
eligible or is no longer eligible, it must not deliver or disburse any
more SFA funds and must help make sure the student arranges to
repay the aid that he or she was not eligible for.

[[NSLDS Transaction Number]]
[[NEW]]
To help schools identify when they have received an output
document with changed NSLDS data, the Department has added a
new flag, the NSLDS Transaction Number. This number can be
found in the FAA Information Section with the other match flags.
The NSLDS Transaction Number is the number of the last
transaction on which the NSLDS data changed. If a school receives
an output document with an NSLDS Transaction Number later than
the one on the output document the school used to determine the
student's eligibility, the school should review the NSLDS data on the
new document to be sure there are no changes affecting the student's
eligibility. Note that if a student or school requests a duplicate output
document, the request is also sent to the NSLDS for matching. If the
NSLDS data have changed, the request will be treated as a system-
generated correction, and both the output document transaction
number and the NSLDS Transaction number will be updated.

REQUESTING FAT INFORMATION

If the school does not obtain financial aid history information from
the NSLDS, and discovers that the student did attend another eligible
school, the school is required to obtain FAT information from that
school (or schools, if the student attended more than one eligible
school) directly. The FAT information 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 financial aid 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.

A school is not required to use a paper FAT to obtain the FAT
information directly from another school. A school may use any
reasonable method to obtain the information, as long as the school
obtains all of the FAT information required by regulations and the
school maintains proper documentation. In addition to a paper FAT,
a school may obtain the information through written documentation,
such as letters or faxes. All documentation must contain the signature
of the official authorized by the previous school to provide FAT
information. The use of electronic mail messages is not allowed
because signatures cannot be attached to such messages.

[[Closed school]]
If it appears that the student's previous school has since closed, the
current school can request the Department's 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 Department's 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 school's 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.

[[CLARIFICATION]]
If no transcript is required, either because the previous school is
foreign, has closed, or does not participate in the SFA Programs, a
school is not required to take further steps to obtain the financial aid
history information. However, the school must use any information it
is aware of to ensure that the student in question has not defaulted on
an SFA loan. A school is encouraged, but not required, to check the
NSLDS for information. Also, to prevent an overaward for the
current award year, the school should secure the student's signed
statement of the amounts of SFA Program funds that were awarded
and disbursed to him or her for the current award year.

NSLDS AND MIDYEAR TRANSFERS

[[GEN-96-13]]
In some cases, NSLDS might not provide timely financial aid history
information for students who attended another school during the
same award year (midyear transfers). Because NSLDS data providers
are on a monthly submission schedule (except Pell, which is weekly),
the student's current information may not be available immediately
when he or she transfers. The school has several options for
obtaining financial aid history information for midyear transfer
students.

1. The school can determine if the student previously attended other
schools (as it normally would if it was relying on paper FATs) and
obtain financial aid history information for a midyear transfer
directly from the previously attended school or schools. If the
previous school has closed, the school may check NSLDS or write
to the FSAIC, as described on the previous page.

2. The school can use NSLDS for the financial aid history for
previous years, and request only current year information from the
previous school. The necessary current year information is: the
student's name and SSN, the award year which the transcript
covers, the student's scheduled Pell Grant, the amount of Pell
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.

3. The school may use NSLDS and disburse aid if it checks the
NSLDS no earlier than 60 days after the student's last date of
enrollment at the other school. Waiting for 60 days after the
student's previous enrollment has ended should allow enough time
for all the data from the previous school to be reported. If the
school later discovers that the student should not have received all
or some of the aid, the school would not be liable, but the student
would be responsible for repaying any amounts for which he or
she was not eligible.

4. The school could review the NSLDS data from the student's
output document and then make an initial disbursement of Pell and
campus-based funds or certify or originate loans as is permitted
when a school is waiting to receive an FAT it has requested (see
the next page). The school would then check the NSLDS no
earlier than 60 days after the student's last enrollment at the
previous school; it may then make subsequent disbursements or
release loan funds, if the student's eligibility is confirmed.

PAYMENT AND CERTIFICATION OPTIONS

[[Pell and campus-based programs]]
Once the school has requested the FAT information, 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 information the school must make any
necessary adjustments to the student's aid package before making
another payment. Also, the school must have documentation that the
FAT information was requested. The school is not liable for the
amount of the first payment if the school never receives the FAT
information (or if the information arrives and shows that the student
is ineligible). However, the school may not make any subsequent
payments to the student without receiving the transcript information,
and the school must attempt to collect any overpayment from the
student.

[[Federal Stafford]]
[[NEW]]
After requesting the transcript information, 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
information is received. If the school does elect to certify a Stafford
loan application and then receives FAT information that shows the
student to be ineligible for payment, the school must return the loan
proceeds to the lender. In addition, beginning with the 1997-98
award year, the school may not hold FFEL proceeds for more than
10 days (this changes to three days beginning with award year 1999-
2000). If the FATs still have not arrived at the end of the 10 days, the
school must return the loan proceeds to the lender. For more
information on the return of FFEL Program funds to a lender, see
Chapter 10.

[[PLUS]]
Under General Provisions regulations, the school may not certify a
PLUS application until the school has received the FAT information.

[[Direct Loan]]
After requesting the transcript information, the school may originate
a Direct Loan award for the student, but the school may not disburse
funds to the student until the transcript information 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 a financial aid transcript. The school may
pay the student as usual if the previous school certifies that the
student did not receive SFA Program funds or certifies that the
record retention period for the student's period of attendance has
expired and the previous school no longer has the student's records.
(See Chapter 3, Section 7 for recordkeeping requirements). As
mentioned earlier, the new school may also pay without transcript
information 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 transcript]]
When a school receives a request for FAT information, the school
must promptly provide the requested information. 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 the transcript information will not be sent and
specify the reason. (See Chapter 3 Section 7 for recordkeeping
requirements.)

[[Listing other schools attended]]
If the school sending the transcript information has any information
indicating that the student had attended any other schools, it must
include the names of those schools with the transcript information (or
in the written response, if the school is not required to send transcript
information). When the school requesting the transcript information
finds that the student has attended another school, it must also
request transcript information from that school.

A school cannot withhold FAT information 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 official academic transcripts in compliance with
applicable state laws.

[[Signature requirement]]
All FAT information must be signed by the person the school
authorizes to sign transcripts and other financial aid documents; the
transcript does not need to be certified. Using a signature stamp to
validate transcript information is also acceptable if the stamp's 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 transcript information, provided it
is properly completed and signed.

REQUIRED INFORMATION ITEMS

The transcript information must include

- THE STUDENT'S 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 holder
of the debt (the guaranty agency, the state agency, or the
Department) will have informed the school if the student is in
default or owes a repayment.

- FOR THE AWARD YEAR IN WHICH THE TRANSCRIPT IS
REQUESTED, THE AMOUNT OF PERKINS FUNDS
DISBURSED.

- 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.

- WHETHER THE STUDENT HAD AN OUTSTANDING
BALANCE ON AN NDSL (EITHER DEFENSE OR DIRECT)
FROM THAT SCHOOL ON OCTOBER 1, 1992.

- 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 student's parents on the student's behalf.

- THE STUDENT'S SCHEDULED PELL GRANT AND THE
AMOUNT OF PELL GRANT FUNDS DISBURSED TO THE
STUDENT FOR THE CURRENT AWARD YEAR.

[[FSEOG]]
Schools do not have to report information on FSEOG awards with
the transcript information 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 student's default or overpayment status at other
schools. However, the school sending the transcript must list these
other schools with the transcript information, and the new school
must make sure that it has received transcript information 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 any information about a student's
eligibility for, or receipt of, financial aid if the school considers that
information useful to the school the student will be attending.

NSLDS Information

The NSLDS financial aid history includes the required information
described above, plus additional information:

- WHETHER THE STUDENT IS IN DEFAULT ON LOANS
RECEIVED AT ANY SCHOOL. Note that an output document
for a student who has defaulted loans will have a "C" next to the
EFC.

- A LISTING OF DEFAULTED LOANS IN THE STUDENT'S
NAME. The list includes the type of loan (that is, whether the loan
is subsidized, unsubsidized, a Perkins Loan, a FFEL, etc.), the
default date, the outstanding balance, the loan period, identifiers
indicating the guaranty agency (if a FFEL), the school that
administered the loan, the current servicer, and--if the Department
is holding the loan--the regional office holding it. Up to six
defaulted loans will be listed on the student's output document. If
there are more than six defaulted loans, the NSLDS Information
page will have a message telling the school to access NSLDS for
more records. The school may access NSLDS directly (through
TIV-WAN) for additional information.

- WHETHER THE STUDENT OWES AN OVERPAYMENT AT
ANY SCHOOL. For 1997-98, if the student does not owe an
overpayment, the NSLDS Information will have an "N" printed in
the appropriate field. Previously, the fields were left blank if there
was no overpayment.

- WHETHER THE STUDENT FILED FOR BANKRUPTCY
PROTECTION ON A SFA DEBT.

- THE AGGREGATE AMOUNTS THE STUDENT BORROWED
UNDER FFEL AND DIRECT LOANS AT ALL SCHOOLS. For
1997-98, in addition to reporting the outstanding principal,
NSLDS provides the amount of pending disbursements and a total
loan amount (the sum of the outstanding principal plus pending
disbursements). If Consolidation Loan amounts are listed and if
the outstanding principal balance may affect student eligibility for
additional loan amounts, the school must determine what portions
of the Consolidation Loan should be attributed to each of the loan
types by logging into NSLDS or contacting the loan holder .

- THE CUMULATIVE AMOUNT OF PERKINS LOANS
DISBURSED TO THE STUDENT AND, FOR THE CURRENT
AWARD YEAR, THE ANNUAL AMOUNT OF PERKINS
LOANS DISBURSED. Note that beginning in 1997-98, the
NSLDS will no longer report whether loans were disbursed prior
to 1987.

- INDICATORS SHOWING IF ANY PERKINS LOANS WERE
AWARDED UNDER THE EXPANDED LENDING OPTION
(ELO), WHICH CHANGES THE ANNUAL AND
CUMULATIVE MAXIMUM ALLOWED.

[[NEW]]
- DETAILS--FOR THE PURPOSE OF PROVIDING SCHOOLS
WITH INFORMATION NEEDED TO MONITOR ANNUAL
LOAN LIMITS AND FREQUENCY OF THE RECEIPT OF
THESE LOANS--ON UP TO SIX FFEL AND/OR DIRECT
LOANS. Note that this is an increase in the number of loans listed;
in 1996-97, information was given on up to three FFEL and/or
Direct Loans per student. In addition, this list is no longer limited
to loans for loan periods beginning on or after January 1, 1994. If
more than six loans exist, the NSLDS Information page will
include a message stating "Access NSLDS for additional loan
records."

MODEL TRANSCRIPT

Although there is no official form for the required FAT information,
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 I 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 student's signature is optional.
However, the transcript must include the student's name and Social
Security Number.

[[Part II]]
Part II of the transcript gives the student's 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 student's
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 "Model Financial Aid Transcript" on pages 2-51 and 2-52 is
currently unavailable for viewing. Please reference your paper
document for additional information.]]

Last Modified: 07/21/1998