The Ins and Outs of NSLDS

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The Ins and Outs of NSLDS

• Ann Scott
• Great Lakes Educational Loan Services, Inc.
• November 2006

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Todays Session

• Using NSLDS in Determining Eligibility
• Resolving Conditions that Affect Eligibility
• NSLDS Adapts to HERA

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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

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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/06
  07FSAHBkVol1Ch3.pdf

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Source Data and Student Eligibility

• What if a loans status or balance
• changes before NSLDS is updated?
• Get paper documentation from lender/servicer
• Get correct information directly from the loan
  holders database
• METEOR a tool that aggregates loan data from
  various holders in real time

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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

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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

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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

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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

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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 gt25
• Prior Default
• Resolve with 6 monthly payments
• PIF the loan (payment, consolidation or
  rehabilitation)
• Get proof of resolved default
• NSLDS status, Reinstate Eligibility letter

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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.

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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.

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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)

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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

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Effect of Prior Discharge due to Disability

• To regain eligibility after a
• Conditional Disability Discharge
• For discharges post 7/1/02
• Obtain physicians statement that borrowers
  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

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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 physicians statement that borrowers
  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

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Effect of Exceeding Loan Limits on Eligibility

• Students exceeding the annual or
• aggregate limits are not eligible
• for Title IV funding.

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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

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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

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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)

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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

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Other Sources of Unallocated Amounts

• HEAL loans
• Perkins loans
• Spouses loans
• FFEL or DL that are misreported or have edit
  problems

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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

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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

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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

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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

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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.

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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

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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

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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)

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Thank YouEnjoy the Conference!

• Ann Scott
• Industry Relations and Regulatory Specialist
  
• Great Lakes Educational Loan Services, Inc.
• St. Paul, MN
• [phone], ext. 296
• [phone] FAX
• aescott_at_glhec.org