ChapterTitle: What is NSLDS?
July 23, 1999DRAFT1
What Is NSLDS?
The NSLDS supports ED in a variety of operational and research functions meant to improve the administration and delivery of student aid through Title IV aid programs. Specifically, the three main goals of NSLDS are:
1.To improve the quality and accessibility of student aid data
2.To reduce the burden of administering Title IV aid
3.To minimize abuse within the aid programs through accurate tracking of funds appropriated to assist the postsecondary students for whom the programs were designed
NSLDS is a national database of Title IV recipients, enrollment data, loan information, Federal Pell Grants and overpayments on student aid disbursed under Title IV of the Higher Education Act of 1965, as amended (the Act). Data in NSLDS is provided by schools, GAs, and ED agencies. The data include information about the following:
· Federal Family Education Loan Program (both FFELP and Direct Loans)
· Federal Perkins loans (including National Direct Student Loans, National Defense and Income Contingent Loans)
· Federal Pell Grants
· Demographic and enrollment data of Title IV recipients
What Are the NSLDS Functions?
NSLDS currently has responsibility for the following functions:
1.Prescreening for Title IV Aid EligibilityThe NSLDS Prescreening function gives schools electronic access to information on prior Title IV aid received by aid applicants. Schools use this information to determine applicants eligibility for further Title IV aid.
2.Postscreening for Title IV Aid EligibilityThe NSLDS Postscreening function informs institutions when their applicants eligibility for Title IV aid changes due to a change in default or overpayment status after their initial prescreening.
3.Default Rate CalculationsDefault rates are calculated annually for schools participating in the Federal Stafford, Unsubsidized Stafford, Supplementary Loans for Students (SLS) programs, and the Federal Direct Loan Program (FDLP). Schools with default rates above established thresholds for at least three consecutive years may be disqualified from participating in some or all student financial aid programs.
4.Monitoring of GA and Lender Billings for ReasonabilityNSLDS allows ED to monitor billings for reasonability by supporting more timely assessment and by providing loan-level information. This helps ensure that the billings ED receives from lenders and GAs reflect the status of their portfolios as reported to NSLDS.
5.Research Studies and Policy Development SupportNSLDS provides several types of access in support of users performing research and developing policy. Online queries range from focused queries, pertaining to a single student or school for relatively small amounts of data, to massive queries requiring NSLDS to supply or summarize massive amounts of data.
6.ED Budget Analysis and DevelopmentEvery year, ED develops input for the Presidents budget, based partly on projected loan program costs for a seven-year period. NSLDS information is used to develop reliable, sound assumptions on which to base the estimated program budget; answer budget related questions; and support necessary hypothetical analyses.
7.Audit and Program Review PlanningED uses audits and program reviews to assess the performance of various Title IV aid delivery system participants. Audit and program review planning functions include retrieving specific data from NSLDS on organizations (schools, lenders, and GAs), and identifying key indicators used to schedule audits and reviews for maximum effectiveness.
8.Assessment of FFELP Administration by GAs, Schools, and LendersNSLDS provides the data for researching and assessing FFELP administration by GAs, schools, and lenders. Such research may be either short- or long-term and generally aims to evaluate the effectiveness of specific program practices.
9.Refund/Cancellation SupportWhen a student withdraws from school early and qualifies for a refund, the school is required to provide the refund or return of a check to the appropriate party within a fixed time period. NSLDS provides information about the time schools take to perform these actions. This information helps auditors and program reviewers identify schools with poor records of handling refunds and cancellations.
10.Borrower TrackingThe Borrower Tracking function is employed by qualified users attempting to locate borrowers who have defaulted on student loans. NSLDS Borrower Tracking capabilities allow these qualified users to identify other schools, GAs, and lenders previously associated with a borrower, so they may be contacted for the borrowers current address.
11.Pre-Claims Assistance/Supplemental Pre-Claims Assistance Notification SupportLenders must request Pre-Claims Assistance (PCA) on delinquent loans within 10 days of the date that assistance is available from the loan guarantor. Lenders must also notify schools when PCA requests are made for borrowers of FFEL loans attending those schools. The NSLDS helps facilitate this process.
12.Loan Transfer TrackingLoan Transfer Tracking monitors transfer activity by maintaining dates of sale and names of loan holders. This information identifies likely problems with participants. It also helps evaluate the administration and billing of Title IV loan programs.
13.Student Status Confirmation ReportStudent Status Confirmation Report (SSCR) information is used by loan holders to verify a borrowers enrollment status. The enrollment information enables loan holders to properly place a borrower into repayment. NSLDS has standardized the SSCR process and maintains current enrollment information.
14.Financial Aid TranscriptThe Financial Aid Transcript (FAT) component of the NSLDS summarizes all previous Title IV aid a student has received.
15.Credit Reform Act SupportThe Credit Reform Act (CRA) requires loan level tracking of all federally guaranteed loans. NSLDS tracks and reports loans by program and by cohort year in which the loan is guaranteed within risk category summary totals. Loan data is used semi-annually to estimate government costs associated with loan programs.
16.Aid OverpaymentNSLDS maintains a record of overpayments owed and repaid by students on Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, and Federal Perkins Loans. The information is used to determine a students eligibility for aid.
17.Organization ContactNSLDS enables users, such as schools, to enter contact information by function. This online contact capability helps users locate the person at a school, GA, or other data provider quickly.
These function areas, and the system capabilities designed to support them, reflect requirements established by ED business organizations to meet the goals established for NSLDS.
Where Does NSLDS Data Come From?
As a comprehensive repository of Title IV recipients and their loan, Pell Grant, overpayment and enrollment information, NSLDS receives data from many sources (some external and some internal to ED) and makes it available to approved users for a variety of purposes authorized by the Act. The principal sources are the following:
· Guaranty Agencies (GAs) provide loan data on FFELP loans from loan origination until the loan is paid in full. Some of the information provided, such as loan balances, is received from lenders who report on loans through their GAs. Data is provided monthly.
· Postsecondary Institutions (schools) provide enrollment data via the SSCR process.
· Schools (or their servicers) that participate in the Federal Perkins Loan Program provide monthly updates of loans.
· The Federal Family Education Loan (FFEL) System provides data monthly on loans and overpayments assigned to ED and weekly data on lenders and lender servicers.
· The Postsecondary Education Participant System (PEPS) provides weekly data on schools.
· The Central Processing System (CPS) provides quarterly demographic data on students in the NSLDS database.
· The Pell Grant Recipient Financial Management System (PGRFMS and the new RFMS) provides daily updates on Pell Grant payments to students.
· The Federal Direct Loan Program (FDLP) Servicers provide monthly data on FDLP loans.
NSLDS users include personnel from ED, other Federal agencies, GAs, lenders, schools, and independent researchers.
NSLDS provides its users with both online and batch processing. The systems products are designed to provide efficient access to NSLDS data for a variety of user levels and purposes. See Figure 2 for the flow of data from NSLDS to various users.