A LenderLender Servicer Odyssey through NSLDS

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A Lender/Lender Servicer Odyssey through NSLDS

• Pam Eliadis
• US Department of Education
• Ron Bennett
• US Department of Education

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Objectives

• Identify how lender reported data affects student
  eligibility
• Specify how the flow of enrollment data impacts
  timely conversion to repayment
• Recognize what data reported to NSLDS impacts the
  Cohort Default Rate
• Examine ways lenders can improve NSLDS Data
  Quality
• Define NSLDS Security rules and user
  responsibilities

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Student Eligibility
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Student Eligibility

• Lender Reported items that affect Student
  Eligibility
• Loan Statuses
• Originations
• Disbursements
• Cancellations/Refunds
• Outstanding Balances

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Student Eligibility

• Schools see eligibility information
• ISIR
• NSLDS FAP Website

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Student Eligibility

• Loan Status

• Lenders report to GAs using
• Common Account Maintenance (CAM)
• NSLDS Lender Manifest
• Proprietary Methods

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Student Eligibility

• Loan Status

• Default Status is based on Lender Claim Payment
• Rehabilitated Loans should be reported timely

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Student Eligibility

• Loan Status
• Identification of Consolidations Underlying
  Loans
• Loan Status Code PN, DN, PC, DP or PF
• Loan Status Date within 210 days (before or
  after) of the Consolidation Loan Date

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Student Eligibility

• Aggregates
• Aggregate Loan Limits are calculated for each
  student on NSLDS to assist the FAA in
  determining student eligibility.
• Three Major Variables
• Net Loan Amounts (Guaranty minus Cancellations)
• Disbursements
• Outstanding Principal Balance

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Student Eligibility

• Originations

• Report Originations as they happen
• Helps Schools see pending aid for Transfer
  Students

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Student Eligibility

• Cancellations/Refunds

Factor in determining the Net Loan Amount for
aggregate calculation
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Student Eligibility

• Disbursements

Factor in aggregate calculation
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Student Eligibility

• Outstanding Principal and Interest Balance Amounts

OPB factored in aggregate calculations, OIB and
Other Fees are not
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Student Eligibility

• Aggregates
• Recent Loans
• Period End Date lt 90 days old
• Loan Status IA, ID, IG, IM
• Aggregate OPB Greater of the OPB or Disbursed
  Amount, not to exceed net loan amount
• If both the OPB and Disbursed Amount equal zero,
  use zero

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Student Eligibility

• Aggregates
• Non-Recent Loans
• Period end date gt 90 days old
• Aggregate OPB lesser of the Net Loan Amount,
  Disbursed Amount, or Outstanding
  Principal Balance if all
  three are greater than zero

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Enrollment Reporting
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Enrollment Reporting

• Impacts of Enrollment Reporting on Lenders/Lender
  Servicers
• Enrollment Reporting Flow
• Changes to the Loan Status
• Impact on the Date Entered Repayment
• Effects of Non-Reported Enrollment Changes

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Enrollment Reporting

• How do students get on a schools roster?
• Reporting of a loan
• School adds them to a roster
• Reporting of a Pell Grant for students who
  previously borrowed at another school

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Enrollment Reporting Flow

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Enrollment Reporting

• When student drops below half-time attendance
• Loan Status IA to IM or IG

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Enrollment Reporting

• When a student in repayment returns to school
• Loan Status RP to DA

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Enrollment Reporting

• Impact on Date Entered Repayment (DER)
• Enrollment Effective Date used to
  drive DER
• DER is loan based, not student based
• GA Data Provider Instructions
• Grace Separation 6 months
• DER Separation 6 months 1 day
• After entering repayment, DER does not change

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Enrollment Reporting

• Possible Effects of Non-Reported
  Enrollment Changes
• Loan converted to repayment early
• Loan entering repayment delayed
• Borrower enters grace period without knowledge

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Enrollment Reporting

• Example of Improper Reporting
• Lenders system puts the student into grace and
  then repayment however, the student
  was stilled enrolled.

Outstanding Amount Balance History
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Enrollment Reporting

• Data Quality Monitoring

• Inconsistencies between enrollment and loan
  statuses

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Enrollment Reporting

• Effective Enrollment Reporting and usage
• Reduces risk of default
• Minimizes technical defaults
• NSLDS
• Maintains the official enrollment data
• Provides GAs enrollment data weekly
• Instructs GAs to inform Lender/Lender Servicers
  timely

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Cohort Default Rates
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Cohort Default Rates

• Recognize what data reported to NSLDS impacts the
  Cohort Default Rate (CDR)
• Formula
• Fields
• Rates
• Frequency
• Adjustments

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Cohort Default Rates

• Fiscal Year 2004 CDR Formula
• Borrowers who entered repayment in FY04
  and defaulted in FY04 05
• divided by
• Borrowers who entered repayment in
  FY04

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Cohort Default Rates

• What NSLDS fields affect the CDR calculation?
• Date Entered Repayment (DER)
• Loan Type
• Date Claim Paid
• Claim Reason Code
• Loan Status Codes
• Student Identifiers

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Cohort Default Rates

• Two Lender Calculations
• Originating Lender Rate
• Current Holder Rate

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Cohort Default Rates

• How often are the CDRs Calculated?
• Draft Cohort Default Rate (CDR)
• Calculate January
• Publish February
• Official Cohort Default Rate (CDR)
• Calculate August
• Publish September

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Cohort Default Rates

• CDR on the Web

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Cohort Default Rates

• CDR on the Web

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Cohort Default Rates

• How does the Lender request an adjustment to
  their CDR?
• Data Correction to GA within 30 days of
  publication
• The GA has 15 days to respond
• CDR Guide for GAs and Lenders http//www.ifap.ed.
  gov/drmaterials/FY03Cohortguide.html

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NSLDS Data Quality
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NSLDS Data Quality

• Examine how lenders can improve NSLDS Data
  Quality
• Timely reporting to GAs
• Effective communication of holder information
• Accurate information

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NSLDS Data Quality

• Benefits of Timely Reporting
• Timely reporting of information affecting
  student eligibility
• New data reported quickly for decision
  making
• Effective program management and oversight

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NSLDS Data Quality

• Effective Communication of Holder Information

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NSLDS Data Quality

• Effective Communication of Holder Information
• Contact information displayed on NSLDS web sites
• Contact Information to be used for the
  Interactive Voice Response Unit for
  1-800-4FEDAID
• Effective Oversight by GAs and ED
• Maintain fiscal responsibility
• Provide accurate picture of portfolio
• Monitor Exceptional Performers data

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NSLDS Data Quality

• Accurate Information
• Resolve reporting errors
• Close unconsummated loans
• Report loan transfers

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NSLDS Data Quality

• Accurate Information
• Resolve reporting errors
• Actively work reporting errors monthly
• Analyze loans error holistically
• Resolve for next submission to GA

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NSLDS Data Quality

• Accurate Information
• Non-Closure of Unconsummated Loans
• May cause GAs to assume the loan status
• Creates conflicting information

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NSLDS Data Quality

• Accurate Information
• Unconsummated Loan Aging

Assumed by the GA
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NSLDS Data Quality

• Accurate Information
• Notification of Loan Transfers
• Proprietary notification of transfers
• NSLDS fields support notification
• Date Loan Sold
• Date of Servicer Responsibility
• Code for Servicer
• Code for Current Loan Holder

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NSLDS Data Quality

• Accurate Information

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NSLDS Data Quality

• Accurate Information

Number of Identifier Conflicts by Month
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NSLDS Security
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Security

• Define NSLDS Security rules and user
  responsibilities
• DCL Gen 05-06
• Audit Reports
• Data Mining
• User IDs

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Security

• Dear Colleague Letter GEN 05-06
• NSLDS may not be used for marketing purposes
• Student/Borrowers permission required
• Reminds users of Federal Student Aids
  enforcement obligation

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Security

• Audit Reports
• Every student look-up is tracked by User ID
• Lender Audit Security Reports
• Requested by DPA
• Number of look-ups by user id
• Past 90 days

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Security

• Dating Mining
• Not permissible
• NSLDS preventing data mining
• Monitoring top 20 users and organizations

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Security

• User IDs
• Will be disabled after 12 months of inactivity
• Cannot be shared with colleagues
• Obtain through FSAwebenroll.ed.gov

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THANK YOU!Please be sure to complete your
conference evaluation forms after the conference!

• Pam Eliadis
• US Department of Education
• Ron Bennett
• US Department of Education