Questions and Answers 30 - 59 FAT DATA ON SARs AND ISIRs Q30 What FAT information is included on the SAR and in the ISIR? A30 The NSLDS Financial Aid History page of the SAR and the corresponding section of the ISIR will include the following information: 1. An indicator of whether the applicant is in default on a Title IV student loan. A default status will continue to generate comments on the SAR, comment codes in the ISIR, and a 'C' indicator on the SAR and in the ISIR. 2. If in default, a listing of each defaulted loan that will include the type of loan, the default date, the outstanding balance, the loan period, and; identifiers for the guaranty agency if an FFELP loan, the school that awarded the loan, the current servicer, and ED's regional office if the loan is held by the Department. There will be an indicator if there are more defaulted loans than will fit on the page or in the record. In such instances the school can access the NSLDS directly to get the additional information. 3. An indicator if the applicant owes an overpayment on a Title IV grant or on a Perkins loan. If so, the school can log onto the NSLDS in order to assist the student in determining what kind of overpayment is owed and to whom it is owed. An overpayment status will continue to generate comments on the SAR, comment codes in the ISIR, and a 'C' indicator on the SAR and in the ISIR. 4. An indicator as to whether the student has filed for bankruptcy on a Title IV debt. 5. The aggregate amount of FFELP/Direct Loans received (outstanding principal balances) itemized separately for subsidized loans, unsubsidized loans, and consolidation loans. Note that the aggregate amount will only include that portion of FFELP or Direct Loans that has been disbursed. Schools may need to make an adjustment to account for the amount still to be disbursed (See Q&A #50). If consolidation loan amounts are listed and if the outstanding principal balance of the consolidation loans might have an effect upon the student's eligibility for additional loan amounts, the school must determine which portions of the consolidation loan should be attributed to each of the loan types (subsidized, unsubsidized, Perkins, etc.). See Q&A #52 for additional information on the handling of consolidation aggregate amounts. 6. The cumulative amount of Perkins Loans disbursed to the student and, for the current processing (award) year, the annual amount of Perkins Loans disbursed. 7. Indicators if the applicant had and continues to have a National Direct Student Loan outstanding balance on July 1, 1987, or on October 1, 1992. These data are needed to determine promissory note provisions for any new loans awarded. 8. An indicator showing if any Perkins Loans were awarded under the Expanded Lending Option (ELO), which changes the cumulative maximum allowed. 9. In order to provide schools with information needed to monitor annual loan limits and the frequency of their receipt, details on the SAR and ISIR on up to three FFELP and/or Direct Loans made for loan periods that began on or after January 1, 1994. This time period was chosen because it should include all loans that could, with the variability of academic years, have an impact upon the annual maximum loan amount a school could approve. There will be an indicator if there are more than three loans in the NSLDS that were made for loan periods that began on or after January 1, 1994. In such instances the school can access the NSLDS directly to get the additional information. These listings will include the type of loan (Direct Subsidized, Stafford Unsubsidized, etc.), its status (in-school, deferment, repayment, default, etc.), the outstanding principal balance, the loan amount, the beginning and ending dates of the loan period, and identifiers for the guaranty agency if an FFELP loan, or the current servicer if a Direct Loan. Q31 Why are there no Pell Grant payment data on the SAR page or in the ISIR section? A31 Delays in the submission of Pell Grant payment data from a school into the Pell Grant Recipient Financial Management System (PGRFMS) and then into the NSLDS mean that the utility of providing Pell Grant payment data on the SAR or in the ISIR is limited. Remember that Pell Grant information is only important, in the context of an FAT, for students who transfer into a school after attending another school within the same award year. Please see the discussion beginning at Q&A #40 concerning the use of the NSLDS for mid-year transfers. Note that the Overpayment Indicator will be set if the student owes an overpayment under the Pell Grant program. Q32 Will updated NSLDS information be included with subsequent SARs and ISIRs? A32 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. Q33 Are the FAT data available from the NSLDS when a school uses the batch method or the on-line methods discussed in Q&A #22 the same as the data provided on the SAR and in the ISIR? A33 Generally yes, however the format for presentation of the data is different for each medium. The attachments to this Dear Colleague Letter show which data are provided on each and how they are formatted. Q34 Does a school have access to additional information in the NSLDS beyond what is provided by and needed for the NSLDS FAT process? Such information might be helpful when assisting a student who needs to determine the history of a loan or who needs to make contact with the holder of a loan or other debt in order to make satisfactory repayment arrangements. A34 Yes, the school will have access to additional information for an applicant by using on-line access to the NSLDS. For example, the school could access data that will provide the loan processing history of the record, including changes in status, loan holder history, and the name of past and current servicers of the loan. Q35 How will a school get computer access to the NSLDS for on-line look-up or to submit a batch file of FAT requests? A35 Access to the NSLDS will be through the Department's Title IV Wide Area Network (TIV-WAN). Information describing the TIV-WAN, including sign-up procedures, was included in 1996-97 Action Letter #7 (GEN-96-8). When a school signs up for access to the NSLDS using the TIV-WAN, the individual signing up will receive both an NSLDS ID and password. For security reasons, these will be sent in separate envelopes. For further information on the Title IV WAN, please contact Title IV WAN Customer Service at (800) 615-1189. USING FAT DATA FROM THE NSLDS Q36 Must a school document that it obtained FAT information from the NSLDS? A36 Yes, a school must maintain documentation of its receipt of FAT information, including indicators that no data was reported, from the NSLDS. Documentation can be accomplished for each of the five methods of access discussed in Q&A #22 as follows: 1. NSLDS FAT page of a SAR - Maintain 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. 2. NSLDS FAT section of the ISIR - The FAT section of the ISIR will be saved as a part of the schools' regular EDExpress process of saving ISIRs. 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. 3. Data file of NSLDS FAT records - The school should save this file, perhaps archiving it to a tape or disk for later retrieval if needed. 4. Print file of NSLDS FAT records - The hard copy of the NSLDS FAT printed from this file will serve as documentation. 5. On-line screen access - The school should use the print screen feature of its computer to print a copy of the NSLDS FAT that was accessed by this method. A message will display if no NSLDS record was found. A print of this screen should also be made and maintained. Q37 Must the school make certain that any default statuses or other negative information in the NSLDS be cleared in the NSLDS before it can disburse Title IV student aid? A37 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. Q38 Can a school determine the amount of a loan not yet disbursed but scheduled to be? A38 A school can calculate the amount of undisbursed loan funds by comparing NSLDS FAT data fields for the most recent loans. The amount of undisbursed loan will be the difference between the "Loan Amount" for a specific loan and its "Outstanding Balance." We are planning to provide this calculated amount as part of the NSLDS FAT process in the future. Q39 What if a school believes that data in the NSLDS may be in error? A39 If a school believes that data in the NSLDS for a student are in error the school should contact the data provider included in the NSLDS record and provide it with any information that will assist the data provider in its investigation and possible correction of the error(s). Data providers are: 1. For FFELP loans, the guaranty agency or the Department's Debt Collection Service (DCS), as appropriate. 2. For Direct Loans, the Direct Loan Servicer or the Department's Debt Collection Service (DCS), as appropriate. 3. For Perkins Loans, the school that reported the loan or the Department's Debt Collection Service (DCS), as appropriate. 4. For Pell Grant payment information, the school that reported the payment. 5. For overpayments, the school that reported the overpayment or the Department's Debt Collection Service (DCS), as appropriate. 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. MID-YEAR TRANSFERS Q40 What is a mid-year transfer. A40 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 mid-year transfers for purposes of Title IV FAT requirements. Q41 Earlier it was stated that sufficient FAT information for mid- year transfers could not be obtained from the NSLDS. Why is this so? A41 Because of the timing of submission of data into the NSLDS the information may not be current for a mid-year transfer. Loan data are submitted once each month and, while Pell Grant payment information is submitted from the Department's Pell Grant payment system (PGRFMS) weekly, the PGRFMS receives Pell payment information from schools approximately every 30 days. Therefore, it is very likely that critical grant and loan information will 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. Q42 If a school cannot rely upon the NSLDS FAT information for mid-year transfers what should it do to get the needed FAT information? A42 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 (See Q&A #4). Please see Q&A #44-47 for possible alternatives. Q43 When one school needs to request FAT information directly from another school only for the current award year, may such a request only ask for current year information? A43 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 needs 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. Q44 Are there any other methods schools could use to comply with their responsibility to enforce student eligibility and program award maximum provisions for mid-year transfers? Could the methods be different depending upon whether the students in question attended during a summer preceding an academic year or attended during an earlier portion of a school's academic year (e.g., the Fall term)? A44 Yes, there are two additional methods schools may use to meet the FAT requirements for students that may have attended another eligible institution earlier in the award year, and one additional method that could be used for those students that may have had prior enrollment in the summer preceding a school's academic year. The two additional methods that could be used for all mid-year transfers are discussed here and the additional method for summer school students is discussed in Q&A #46. 1. Since the problem with the use of the NSLDS for mid-year transfers is that there may not have been sufficient time for data to have been transmitted to the NSLDS from the student's previous attendance, the new school could disburse Title IV aid if it had, no earlier than 60 days after the end of the student's prior enrollment at the other school, checked the NSLDS in order to get the latest information. This method would minimize the number of cases when late data would result in a loss of some or all of a student's eligibility. Of course, while the school would not be liable if it later turned out that the student was not eligible for all or some of the aid received, the student would be responsible under the provisions for overpayment and repayment of loans as discussed in Q&As #15, #16, and #17. 2. A school could, after reviewing NSLDS data on the SAR or in the ISIR and, consistent with current regulations for schools awaiting the receipt of an FAT from another institution §668.19(a)(3)], make an initial disbursement of Pell Grant and campus-based funds to a mid-year transfer student. The school may also certify an application under the FFELP loan program or originate a loan under the Direct Loan program, but it could not release FFELP or Direct Loan funds until it had confirmed the student's eligibility by checking the NSLDS no earlier than 60 days after the end of the student's prior enrollment. Once again, while the school would not be liable if it was determined that the student was not eligible for all or some of the aid received, the student would be responsible under the provisions for overpayment and repayment of loans as discussed in Q&As #15, #16, and #17. Q45 What are the differences between students who may have prior attendance in the summer preceding the school's academic year and those that are transferring into a school after attending another eligible institution during the academic year? A45 Most, but not all, students who attend other schools during a summer that precedes an academic year are not regular students at the other school and, therefore, will not be receiving any Title IV aid for that attendance. This is particularly true for a school's current students who take a few extra classes at another school during the summer. This is a much different situation than the status of most students who attend other schools during the academic year. Such students might very well be enrolled at the other school as regular students and, therefore, could be recipients of Title IV aid. Q46 With the distinction of mid-year transfers as described above in mind, what is the third alternative to requesting a paper FAT a school could choose for those students that may have attended another eligible institution during the current award year, but prior to the beginning of the school's academic year (e.g., summer attendees)? A46 A school could determine for any of its students that may have attended another school in the summer preceding its academic year, and after considering the nature of its students and the potential for liability, to use any NSLDS FAT information provided to it from the normal sources (SAR page or ISIR section) and award Title IV aid based only upon that information. If a later review of the NSLDS (perhaps as a part of the next year's application process) determined that the school had awarded and disbursed Title IV funds for which the student was not eligible, it would be liable for returning those funds to either the appropriate Title IV account or to the lender or servicer in the case of a FFELP or Direct Loan. In many instances the risk of liability to a school will be non-existent or at least minimal for the following reasons. First, the most common problem that would make a student ineligible for Title IV aid is that he or she is in default or owes an overpayment. Since prior to making the initial award the school would have checked the NSLDS data provided to it on the SAR or ISIR, and it is unlikely that a student that did not have a default or overpayment at the time of the earlier review would have one a few months later, further checking of the NSLDS generally would not show any change of eligibility. Second, if it turns out that the student had received some Pell Grant funds during the summer at the other school, the Pell payment system would automatically reduce the second school's expected payment utilizing the Pell Overpayment procedures currently in place. The notification of this reduction by the Pell payment system would generally be accomplished in time for the school to reduce one or more subsequent disbursements of additional Pell Grant funds for the award year. Finally, the school could check the NSLDS later in the year, but prior to the release of additional loan funds, in order to make certain that no additional data indicated that the student had previously received loan funds for the year that could result in exceeding an annual or aggregate maximum. If such a result was indicated there would usually be plenty of time to adjust subsequent disbursements in order to eliminate the problem and the liability. Q47 Must a school make the same choice for all of its mid-year transfers? A47 The school may meet the eligibility determination requirements using a different method for each of its students. OTHER ISSUES Outstanding Principal Balance Q48 Why is outstanding principal balance information for FFEL and Direct Loans included in all NSLDS FAT reports, including the SAR and ISIR? A48 Both the FFELP and Direct Loan programs have statutory aggregate loan maximums. While the maximums vary depending upon a number of factors (See the Federal Student Aid Handbook), they are based upon outstanding principal balance. Outstanding principal balance is the sum of all disbursed amounts (net of refunds and other adjustments to disbursements), less payments of principal made on the loan by or on behalf of the borrower. Note that for the Federal Perkins Loan Program the statute bases annual and cumulative maximums on the amount originally disbursed (net of refunds and other adjustments to disbursements), not on the outstanding principal balance. Q49 Will the "Aggregate Amount of Outstanding Principal Balance" listed on the SAR and in the ISIR include the most recent loans? A49 The "Aggregate Amount of Outstanding Principal Balance" in the NSLDS will be only the disbursed amounts of Direct or FFELP loans, including the most recent loan(s). It will not include any scheduled but not yet disbursed amounts. Therefore, schools should check to see if there are funds scheduled to be disbursed from the most recent loan(s) that are not yet a part of the "Aggregate Amount of Outstanding Principal Balance." Q50 How can a school determine if there are funds scheduled to be disbursed from the most recent loan(s)?" A50 A school can calculate the amount of undisbursed loan funds by comparing NSLDS FAT data fields for the most recent loans. The amount of the undisbursed loan will be the difference between the "Loan Amount" for a specific loan and its "Outstanding Balance." We are planning to provide this calculated amount as part of the NSLDS FAT process in future years. Q51 Why is the amount of "Outstanding Principal Balance" for the individual loans included in the NSLDS often blank even though, based upon the loan period, it appears that the loans have been fully disbursed? A51 During the loading of FFELP loan data, some guaranty agencies were not able to provide outstanding principal balance information to the NSLDS. It is expected that this problem will be resolved during the first few months of 1996-97 processing. If there is an amount in the outstanding principal balance field for a loan record, schools can assume it is accurate. If the field is blank, schools should use the amount reported as the "loan amount" as a proxy for the outstanding principal balance until this problem is corrected. If the value of the field is '0' (zero), the school can assume that there is no outstanding principal balance on the loan. Consolidation Loans Q52 Why do NSLDS FAT records, including SARs and ISIRs, show an "Outstanding Principal Balance" amount for consolidation loans? A52 The section of the HEA that provides for annual and aggregate maximums of subsidized and unsubsidized loans, provides that the amounts of subsidized and unsubsidized loans that underlie a consolidation loan be used when determining if a borrower may receive additional loans. Therefore, information about any outstanding balance of a consolidation loan is made available so that the school can properly determine additional eligibility. Q53 What should a school do with the information provided by the NSLDS about an "Outstanding Principal Balance" of a consolidation loan? A53 It is somewhat complicated to sort out the proper proportions of an outstanding balance of a consolidation loan into subsidized and unsubsidized. However, in many instances a school may determine that it is unnecessary to go through that process. The school could determine what the affect on additional subsidized loan eligibility would be if it assumed that all of the consolidation loan's outstanding balance were from subsidized FFELP or Direct Loans. If such an assumption would not affect the amount of subsidized loan the student would otherwise be eligible for, then no additional action is necessary. Similarly, the school could consider the affect on eligibility if all of the consolidation loan's balance were assumed to be unsubsidized. Q54 If it is necessary to determine which portions of the outstanding balance of a consolidation loan represent subsidized and unsubsidized loans, how does a school know what the underlying loans were so that it can properly monitor loan maximums? A54 To do this, the school must access the NSLDS on-line and find the loans that were paid off by the consolidation. This is accomplished by selecting loans with a status that indicates that the loans were paid in full through consolidation. Within the NSLDS, this status code will be 'PC'. The school must then prorate the amount of outstanding principal balance on the consolidation loan in the same ratio that each of the 'PC' original loan amounts is to the original consolidation loan amount. The resultant outstanding principal balance amounts must be allocated to the proper loan type (subsidized, unsubsidized, Perkins, etc.) when determining continuing eligibility for those loan types. In some instances, because of timing or coding problems by lenders and guaranty agencies, all of the loans that made up a consolidation loan will not be included in the NSLDS. Schools will be responsible only for the data contained in the NSLDS and are not expected to research further or to make assumptions regarding other non 'PC' loans contained in the NSLDS. Q55 Are there other ways a school could determine the make-up of the consolidation outstanding balance? A55 Yes, a school could also review the consolidation paperwork that the student has to determine the portion of the consolidated loan that must be considered subsidized or unsubsidized. Privacy Issues Q56 Are there special security or privacy issues related to school access to the NSLDS? A56 Yes, in addition to the normal issues of privacy and confidentiality related to all information submitted by or about an applicant for Title IV aid, access to the NSLDS by schools creates additional privacy and security concerns. Q57 What are the privacy responsibilities of the financial aid officer (FAO) who has access to the NSLDS? A57 When an FAO signs a Title IV WAN Letter of Application to gain access to data in the NSLDS, he or she also agrees to abide by the provisions of the Privacy Act of 1974, as amended. These provisions include the requirement that individuals who have access to data in the NSLDS understand that they can be held personally liable if they violate any provisions of the Privacy Act. In practical terms this means that persons accessing the NSLDS should only do so for legitimate reasons related to an applicant's application for Title IV aid. Any data contained in the NSLDS must remain confidential and be used only for purposes related to an individual's Title IV aid history or application for Title IV aid. Proper protection of any printed or computer generated NSLDS information must also be applied. Finally, no one may access data in the NSLDS for a person who is not a prior recipient of, or a current applicant for Title IV aid at that school except if such access is necessary to determine whether records in the NSLDS relate to such an individual (See Q&A 27). Q58 What are the special issues and concerns related to the use of the NSLDS? A58 The most critical of these relates to the ability of school staff to access information from the NSLDS using only a Social Security Number (SSN). As is discussed in Q&A #26, there are instances when a financial aid officer (FAO) will need to determine if certain data in the NSLDS belong to an applicant for aid at that school. In order to allow FAOs to make such a determination, the NSLDS, which normally requires a name and date of birth in addition to an SSN, provides a special access feature that allows access using only an SSN. It is critical that schools understand both the institutional and personal responsibility and possible liability that accompanies such access. Q59 Does the Department plan on monitoring the use of this special access feature by FAOs? A59 Yes, the Department is developing software that will monitor access into the NSLDS by FAOs with particular emphasis on the use of the special SSN ONLY access. If the Department believes that an FAO is abusing his or her access to NSLDS data, it may eliminate that person's ability to use the NSLDS.