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The Ins and Outs of NSLDS

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The Ins and Outs of NSLDS

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    1. The Ins and Outs of NSLDS Ann Scott Great Lakes Educational Loan Services, Inc. November 2006

    2. Today’s Session Using NSLDS in Determining Eligibility Resolving Conditions that Affect Eligibility NSLDS Adapts to HERA

    7. Using NSLDS to Determine Eligibility ISIR Information is from NSLDS You may rely on ISIR information and on the information in NSLDS Mid-year transfer students need extra research on NSLDS--Transfer Monitoring Other conditions have an impact on eligibility

    8. Using NSLDS to Determine Eligibility Know the “alphabet soup” of NSLDS Status Codes – Useful chart in SFA Handbook p. 49 of Volume 1, 2006-2007 http://www.ifap.ed.gov/sfahandbooks/attachments/0607FSAHBkVol1Ch3.pdf

    13. Source Data and Student Eligibility What if a loan’s status or balance changes before NSLDS is updated? Get paper documentation from lender/servicer Get correct information directly from the loan holder’s database METEOR – a tool that aggregates loan data from various holders in real time In 2000, several leaders in the financial aid community recognized the need for a common, timely source for aggregated financial aid award information. Since then, Meteor™ -- the resulting initiative -- has become more than a network to access recorded loan information. In Meteor, financial aid professionals can aggregate important information from all of a student’s loan providers in real time, with award summary and detail information, disbursement and repayment information, and default and claim information available. In 2000, several leaders in the financial aid community recognized the need for a common, timely source for aggregated financial aid award information. Since then, Meteor™ -- the resulting initiative -- has become more than a network to access recorded loan information. In Meteor, financial aid professionals can aggregate important information from all of a student’s loan providers in real time, with award summary and detail information, disbursement and repayment information, and default and claim information available.

    14. What is Meteor? Web-based universal access channel for financial aid information Aggregated information to assist with counseling borrowers Collaborative effort of FFELP participants A gift to schools – access available through participating guarantors

    15. Using NSLDS to Determine Eligibility Transfer Students Prior Default/Overpayment of Grant Bankruptcy Prior Discharge due to Total and Permanent Disability Consolidation Loans/Exceeding Aggregate Loan Amount

    16. Transfer Student Eligibility Before disbursing Title IV funds to a transfer student, the school must Participate in NSLDS Transfer Monitoring Check prior Title IV history Loan history at previous school(s) Default status/Pell overpayment Annual and aggregate loan amounts Log in to NSLDS real time to check

    17. Transfer Student Eligibility Schools, not lenders or guarantors, bear ultimate responsibility to ensure that transfer students Do not exceed annual or aggregate limits Do not have a prior default

    18. Effect of Overpayment/Prior Default on Eligibility A student is not eligible for Title IV aid if the student has Prior Overpayment of Pell Must resolve if >=$25 Prior Default Resolve with 6 monthly payments PIF the loan (payment, consolidation or rehabilitation) Get proof of resolved default – NSLDS status, “Reinstate Eligibility” letter

    19. Effect of Prior Default on Eligibility A student that resolves default status anytime during the year regains eligibility retroactive to the beginning of the award year. Example: Student PIFs default in 01/05. School may certify a loan for 09/04 – 05/05.

    20. Effect of Bankruptcy on Eligibility Bankruptcy has no effect on loan eligibility, unless loan is in default and not discharged Bankruptcy Reform Act of 1994 says government cannot deny a loan based SOLELY on bankruptcy.

    21. Effect of Bankruptcy on Eligibility Eligible bankruptcy codes on NSLDS BC (discharged, not in default) BK (active bankruptcy, no prior default) DK (defaulted, bankrupt ch 13, then discharged) OD (defaulted, bankrupt ch 7 or ch 11, then discharged)

    22. Effect of Bankruptcy on Eligibility Ineligible bankruptcy codes on NSLDS DB (active bankruptcy ch 13, defaulted loan) DO (active bankruptcy ch 7 or ch 11, defaulted loan

    23. Effect of Prior Discharge due to Disability To regain eligibility after a Conditional Disability Discharge For discharges post 7/1/02 Obtain physician’s statement that borrower’s condition has improved, can engage in gainful activity (going to work and school) Affirm that any previous or new loans will not be discharged for the same disability Resume payment on the conditionally discharged loan

    24. Effect of Prior Discharge due to Disability Regaining eligibility after a Final Disability Discharge For discharges after 7/1/02 that have completed the 3-year conditional period OR for discharges prior to 7/1/02 Obtain physician’s statement that borrower’s condition has improved, can engage in gainful activity (going to work and school) Affirm that any previous or new loans will not be discharged for the same disability

    25. Effect of Exceeding Loan Limits on Eligibility Students exceeding the annual or aggregate limits are not eligible for Title IV funding.

    26. Effect of Exceeding Loan Limits on Eligibility If borrowing more than the maximum limit was inadvertant, resolution can be made by Repaying the excess in full Reallocating between subsidized and unsubsidized portions Entering into a payment arrangement to reduce the excess amount – loan consolidation satisfies this requirement In all the Dept. of Ed guidances, the term inadvertant is used to distinguish that the overborrowing must not be the result of intentational abuse of the program or even fraud. Vol 1, Ch. 5 of the 2006-2007 SFA handbook says the following about eligibility after exceeding the aggregate loan limit. If a student has consolidated the loan(s) that exceeded the annual or aggregate loan limit, he or she is considered to have made satisfactory arrangements to repay the debt, and no additional action on the part of the student is required. Once you have documented that the inadvertent overborrowing has been resolved (through repayment in full, making satisfactory arrangements to repay the debt, replacement of an excess subsidized loan with an unsubsidized loan, or consolidation of the excess loan amount), you may award additional Title IV funds to the student. Keep in mind, however, that the student may have no remaining loan eligibility, or may be eligible only for unsubsidized loans. In all the Dept. of Ed guidances, the term inadvertant is used to distinguish that the overborrowing must not be the result of intentational abuse of the program or even fraud. Vol 1, Ch. 5 of the 2006-2007 SFA handbook says the following about eligibility after exceeding the aggregate loan limit. If a student has consolidated the loan(s) that exceeded the annual or aggregate loan limit, he or she is considered to have made satisfactory arrangements to repay the debt, and no additional action on the part of the student is required. Once you have documented that the inadvertent overborrowing has been resolved (through repayment in full, making satisfactory arrangements to repay the debt, replacement of an excess subsidized loan with an unsubsidized loan, or consolidation of the excess loan amount), you may award additional Title IV funds to the student. Keep in mind, however, that the student may have no remaining loan eligibility, or may be eligible only for unsubsidized loans.

    27. Effect of Exceeding Loan Limits on Eligibility Determining aggregate totals for borrowers with consolidation loans NSLDS initially took a “cautious” approach in totaling subsidized amounts in FFELP consolidations Correct approach uses a specific algorithm and certain assumptions

    28. Effect of Exceeding Loan Limits on Eligibility Guidance from ED to schools: “Dear Partner” letter GEN 03-12 Algorithm method 2006-2007 Federal SFA Handbook, Vol.3, Ch. 4, page 3-86 In lieu of performing the algorithm, schools may total the disbursed amount of the loans paid through consolidation (PC, PN status)

    30. NSLDS Unallocated Amounts in FFEL Consolidations Unallocated amounts in consolidations cannot be attributed to subsidized or unsubsidized. Usually, the amounts are Capitalized interest Often, very high

    31. Other Sources of Unallocated Amounts HEAL loans Perkins loans Spouse’s loans FFEL or DL that are misreported or have edit problems

    32. Dept. of Ed Announcement about Unallocated Amounts Good News – Schools can ignore unallocated amounts that are reported on ISIRs and on NSLDS web screens NSLDS will not use unallocated amounts when applicant has exceeded or is close to a loan limit ISIRs and web screens will still show unallocated amounts

    37. $23,000 Aggregate Limit for De- pendent Undergraduates When monitoring the $23,000 limit, NSLDS excludes any amount of an unsubsidized loan that appears to be the result of a parent PLUS denial Additional Unsub Icon and “P” code in Loan History When it says “appears to be the result”, what does that mean? NSLDS is able to know the following about a student’s dependency status – date When it says “appears to be the result”, what does that mean? NSLDS is able to know the following about a student’s dependency status – date

    38. For purposes of understanding how NSLDS can make some correct assumptions about dependency status, pretend you can see the name, ssn and date of birth. The date of birth was Dec. 20, 1985, making the student 21 years old. This is one of the criteria for being dependent, being under 24 years of age.For purposes of understanding how NSLDS can make some correct assumptions about dependency status, pretend you can see the name, ssn and date of birth. The date of birth was Dec. 20, 1985, making the student 21 years old. This is one of the criteria for being dependent, being under 24 years of age.

    39. Next, see that loan #12 is flagged as the likely additional unsub due to a parent denial. It is an unsubsized loan for $5000 at grade level 3. See that subsidized loan #13 is for the same loan period. It is a full $5500 subsidized. This student appears to be dependent because of age and grade level, yet received the additional $5000 unsub on top of the full $5500 sub. Must have been because the parent’s PLUS was denied. Next, see that loan #12 is flagged as the likely additional unsub due to a parent denial. It is an unsubsized loan for $5000 at grade level 3. See that subsidized loan #13 is for the same loan period. It is a full $5500 subsidized. This student appears to be dependent because of age and grade level, yet received the additional $5000 unsub on top of the full $5500 sub. Must have been because the parent’s PLUS was denied.

    40. NSLDS Adapts to HERA Phase I changes implemented 7/1/06 Loan types Deferment status Overpayments accepted and displayed for ACG and SMART grants Phase II changes will be implemented 12/31/06 Display ACG and SMART grant awards Information on the Phase I changes found in NSLDS Newsletter #13, July 2006 on www.ifap.ed.gov

    41. Grad PLUS Loans on NSLDS How will PLUS loans to graduate and professional students appear on NSLDS? “GB” for FFEL “D3” for DL These will appear on Enrollment Verification Rosters

    42. Grad PLUS Loans on NSLDS How will PLUS loans to graduate and professional students appear on ’06-’07 ISIRs? “PL” for FFEL PLUS “D4” for Direct PLUS To accommodate trading partners until all systems are updated to receive GB, D3.

    44. Military Deferment HERA created a 3-year military deferment for eligible loans with a first disbursement on/after July 1, 2001. “MO” status, along with the deferment end date, will appear in “Loan Detail” For both FFEL and DL

    46. Overpayments of ACG and National SMART Grants Schools must report overpayments of new grants in overaward situations and to comply with §668.22(i) when students withdraw. Actual awards themselves are not yet displayed on NSLDS – will be after 12/31/06

    48. NSLDS Websites Access for Financial Aid Professionals at https://www.nsldsfap.ed.gov/secure/logon.asp Access for students at http://www.nslds.ed.gov/ (Students must have valid PIN)

    51. Thank You Enjoy the Conference! Ann Scott Industry Relations and Regulatory Specialist Great Lakes Educational Loan Services, Inc. St. Paul, MN (800) 322-9536, ext. 296 (651) 290-8799 FAX aescott@glhec.org

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