Posted Date: April 20, 2015
Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid
Subject: 150% Direct Subsidized Loan Limit: Electronic Announcement #17 - School Misreporting of Data to COD and NSLDS
We have determined that many schools are misreporting (1) academic year dates to the Common Origination and Disbursement (COD) System and (2) program length to both COD and to the National Student Loan Data System (NSLDS).
This misreporting adversely impacts students and affects our ability to carry out our statutory obligation to comply with the 150% Direct Subsidized Loan Limit statutory provision. This is a critical issue that the Department is closely monitoring, because, when incorrect data are reported, it is possible that students will receive loans for which they are not eligible, be denied loans for which they are eligible, or lose interest subsidy when they should not.
We will continue to monitor the accuracy of the data submitted by schools to COD and to NSLDS. We will contact schools that have submitted a large volume of data that we believe to be incorrect, and may refer schools that do not come into compliance to our Program Compliance office for further action. However, all schools, no matter its size or the number of records submitted, should check whether their reporting to COD and to NSLDS complies with the reporting information that is summarized in this announcement.
We are committed to continuing to work with schools, their third-party servicers, and professional organizations to improve the accuracy of reporting. However, if the amount of misreporting does not decrease, other steps—including additional reporting requirements that will allow us to specifically confirm whether reported data are in error and establishing edits in COD and NSLDS to reject suspected errors —will be taken to ensure compliance with statutory requirements.
Academic Year Dates Reported to COD
As explained in Dear Colleague Letter GEN-13-13 (DCL GEN-13-13), posted to IFAP on May 10, 2013, and provided as an attachment to this Electronic Announcement, the academic year dates that schools are required to report to COD for Direct Loans must be the exact beginning and ending dates of the full academic year to which the annual loan limit applies for the loan. Note that the Direct Loan academic year may be different than the academic year published in the school’s catalog or, in some cases, different from the academic year that the school has established for Title IV student aid purposes pursuant to the regulations at 34 CFR 668.3.1 Also, the reporting instructions from DCL GEN-13-13 apply to all Direct Loans that are first disbursed on or after July 1, 2013 (Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans made to parents or graduate/professional students).
If a school finds that it has misreported academic year dates to COD, it must update the COD record to the correct dates regardless of whether or not the loan was made to a borrower who is subject to the 150% Direct Subsidized Loan Limit provision and regardless of whether or not the loan was a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan.
Related, but independent of the issue of reporting academic year dates correctly to COD is reporting and updating, as necessary, loan period dates to COD. We take this opportunity to remind schools that DCL GEN-13-13 also includes guidance about loan period reporting. Further operational guidance about loan period reporting and similar issues in 150% Electronic Announcement #16.
The following describes the problematic issues we have identified with institutional reporting of academic year dates.
Issue: For standard (and some non-standard) term-based programs, reporting academic year dates that are the length of a single term.
Resolution: Ensure that academic year dates that are reported consist of multiple terms, even if the student receives the loan for only a single term.
Under the Direct Loan regulations at 34 CFR 685.303(e)(1), a student in a standard-term credit hour program or in a non-standard term credit hour program with substantially equal terms of at least nine weeks each, progresses to the next annual loan limit at the conclusion of the calendar period associated with the academic year (scheduled or borrower-based) that applies to the loan. Because, for these types of programs, all scheduled or borrower-based academic years consist of more than one term, academic year dates that are the same as the dates for a single term are never correct. This is the case even if the student will not be enrolled for the full academic year or will not be receiving a Direct Loan for a portion of the academic year. Examples of circumstances in which a student will not be receiving a Direct Loan for a full academic year include (1) the student being enrolled in a program that is less than an academic year, (2) the student will complete the program in less than an academic year, (3) the student is enrolled on a less-than-half-time basis for any term of the academic year, or (4) any other reason when the loan period is not equal to the full academic year. For example, for a student enrolled in a program that uses a scheduled academic year that includes the fall and spring terms, both of those terms must be included in the dates of the student’s Direct Loan academic year.
Issue: For non-term (and some non-standard-term) programs, reporting academic year dates that result in periods shorter than what is permitted under the regulations.
Resolution: Ensure that for these programs, the length of the academic year is always the length of a Title IV academic year, even if the student will be enrolled for or receiving a loan for a shorter period of time.
Under the Direct Loan regulations at 34 CFR 685.303(e)(2)-(3), a student in a clock hour program, a non-term program, or non-standard term program where the terms are either not substantially equal or if they are they are less than nine weeks in length, progresses to the next annual loan limit when the student completes the borrower-based academic year established by the school for the student—that is, the school’s definition of a Title IV academic year. Under the regulations at 34 CFR 668.3, a Title IV academic year for a clock hour program must always include at least 26 weeks of instructional time and at least 900 clock hours and a Title IV academic year for a credit hour program must include at least 30 weeks of instructional time and at least 24 semester or trimester credit hours or 36 quarter-credit hours. In all cases, the school’s definition of a Title IV academic year may include more weeks of instructional time or more clock or credit hours at the school’s choosing. The dates associated with the full borrower-based academic year must be those used to track annual loan limits. Like the earlier example, this is the case even if the loan period for the loan does not cover the full academic year because the student is enrolled in a program that is less than an academic year, the student will complete the program in less than an academic year, or the student withdraws before the end of an academic year. For example, a 600 clock hour program is, by definition, less than an academic year in length, because it is less than 900 clock hours. A student in this program who receives a Direct Loan would have a loan period that corresponds to the length of time it takes the student to complete the 600 clock hour, and an academic year corresponding to the period of time it would take the student to complete a Title IV academic years’ worth of coursework (both in terms of instructional time and clock hours—for example, 900 clock hours and 26 weeks of instructional time), even though the student will not be enrolled for this long of a period. For more information, see 150% FAQ AYLP-Q7.
Published Program Length Reported to COD and to NSLDS
For both COD and NSLDS, program length is used to calculate the Maximum Eligibility Period for a borrower who is subject to the 150% Direct Subsidized Loan Limit. Published program length should be reported to both systems based on the definition of “normal time” to completion in the regulations at 34 CFR 668.41(a). In webinars and presentations we have previously provided the following guidance on the reporting of program length to both COD and NSLDS:
If the school has published, in its catalog, on its website, or in any promotional materials, the length of the program in weeks, months, or years, the program length to be reported to COD and NSLDS must be the same as the program length that the school has published. Note: For gainful employment programs, the school must have published the program’s length in weeks, months, or years on the school’s website.
If the school has not published a program length and the program is an associate or bachelor’s degree program, the program length to be reported should be 2 years or 4 years, respectively, unless the academic design of the program makes it longer or shorter than the typical, 2-year associate degree program or 4-year bachelor’s degree program.
For all other programs for which the school has not published a program length, the program length is based on the school’s determination of how long, in weeks, months, or years, the program is designed for a full-time student to complete.
Issue: Some schools are reporting bachelor’s and associate degree programs using a unit of time of “weeks” or “months”, instead of “years”.
Resolution: Schools should examine the data that they have reported to COD and to NSLDS to determine whether the program length was correctly reported and that the correct program length measure (weeks, months, years) was reported to ensure that associate degree and bachelor’s degree programs are reported in years.
Issue: Some schools are reporting program lengths that are so short that it is likely that the program length is reported incorrectly.
Resolution: We believe that much of this reporting is in error because schools have not followed our published procedures for how to report program length to NSLDS. In NSLDS, program length is a six-digit numeric field with an implied decimal between the third and fourth digits. For example, a four-year bachelor’s degree program should be reported as “004000”, and the implied decimal will result in the program length being 4 years. We have found that many schools have misreported program length, in the context of the example, as “000400”. This would, with the implied decimal, result in the program length being 0.4 years. The effect of this type of reporting error would be to cause the student to lose subsidy under the 150% Direct Subsidized Loan Limit.
We thank you in advance for your cooperation is ensuring that correct data are reported and that students are not adversely impacted by incorrect reporting.
Please refer any questions you have concerning this announcement to firstname.lastname@example.org.
1 The regulations at 34 CFR 668.3 provide a definition of a Title IV academic year that includes a minimum number of weeks of instructional time and a minimum number of credit or clock hours. The regulations at 34 CFR 685.303(e) sets the period to which a Direct Loan annual loan limit applies. In some cases, the annual loan limit provisions require a school to use the same definition the institution established for a Title IV academic year under 34 CFR 668.3, and in other cases, it does not. For more information on tracking annual loan limits, see the 2014-20154 FSA Handbook, Volume 3, Chapter 5, Pages 97 – 112.