Posted Date: March 12, 2015

Author:  Pamela Eliadis, Service Director, System Operations & Aid Delivery Management, Federal Student Aid

Subject: School Responsibilities Upon Receiving Paper In-School Deferment Forms

In recent weeks, we have received questions from schools indicating that they are seeing an increased number of requests for completion of paper in-school loan deferment forms. It has been suggested that this increase is the result of the termination of the contract between Federal Student Aid (FSA) and the National Student Clearinghouse (NSC).

The enrollment reporting contract with NSC was created and continued for several years because schools were not reporting enrollment information to NSLDS frequently enough for loan servicers to properly service Direct Loans. However, under the regulations that became effective on July 1, 2014, schools are now required to report enrollment to NSLDS at least every 60 days, instead of at least twice a year. Now that schools are reporting at least every two months, servicers have much timelier enrollment information to rely on.

Under the regulations, all Title IV loan servicers are authorized to use a borrower’s enrollment information in NSLDS to grant an in-school deferment or in-school status. Therefore, to reduce the number of paper in-school deferment form requests, we have directed our Federal Loan Servicers to send paper in-school deferment forms to schools only when the borrower’s enrollment cannot be verified using information in NSLDS. In addition, the Department’s loan servicers have the capability of adding a new school to a student’s NSLDS record when the servicer receives information (usually from the student) of enrollment. This will result in the student being included on the next enrollment roster provided to the school or to its third-party servicer. Thus, in most instances there would be no need for the servicer to request a school to complete a deferment form. As long as a school is fully compliant with enrollment reporting requirements, borrower enrollment information should generally be accurate and up to date in NSLDS. For all of these reasons, we expect that the only time a servicer may need to request completion of an in-school deferment form by a school will be for a Title IV borrower who indicated to the servicer that he or she has transferred to that school, the borrower’s enrollment has not yet been reported to NSLDS by the school, and there is some urgency to confirm that enrollment (e.g., borrower is past due and/or close to defaulting on a Title IV loan).

Updating Enrollment Information Online

In instances where a servicer does send a school a paper in-school deferment form, we recommend that instead of the labor-intensive process of completing the paper form, school staff simply log on to the NSLDS Professional Access Web site, and use the Enrollment Maintenance function to add the student or update the student’s enrollment information. A school may also use the Enrollment Spreadsheet Submittal process to submit enrollment information for multiple students online. Instructions and a sample spreadsheet can be found on the Federal Student Aid Download (FSAdownload) Web site. NSLDS sends weekly updates to loan servicers (and to FFEL guaranty agencies for use by FFEL lenders and lender/servicers) so that online updates will be received by the servicers within days of a school’s submission. Updates can be viewed immediately on the NSLDS Professional Access Web site.

Note: If the office at the school responsible for NSLDS enrollment reporting (often the Registrar’s Office) does not have access to NSLDS online enrollment updating functions, that office should be provided with access by working with the school’s Primary Destination Point Administrator.

Enrollment Reporting File Requirements

It is important to note that enrollment reporting is required for all students included on the NSLDS Enrollment Reporting File (the “roster”) provided by NSLDS to a school or to the school’s third-party servicer. That file will only include students for whom NSLDS has information indicating that the student is enrolled at the school (e.g., current or prior Title IV aid received or a loan deferment granted). Therefore, NSLDS may not initially include on the roster a Title IV recipient who transferred into a school and who is not receiving Title IV aid at the new school or has not yet been granted an in-school deferment. We urge schools to add a student to an enrollment roster or to update NSLDS using the online enrollment reporting methods discussed above if the school has identified an incoming student as one who had previously received Title IV assistance.

As noted, schools can, and are urged to, add to their NSLDS Enrollment Reporting File any of their enrolled students who have previously received Title IV aid either at that school or at a prior school. However, under the law, neither schools nor third-party servicers may add a student to NSLDS unless it has been determined that the student is or was a recipient of Title IV aid. We note that a school’s third-party servicer, including NSC, may use information it has from its other school clients to determine if a student was a Title IV aid recipient. We suggest that schools contact their third-party servicer to confirm the servicer is performing this function on behalf of the school.

As a reminder, NSLDS assists schools in building more complete enrollment rosters by adding to a school’s roster any student with Title IV aid that appears on the school’s Transfer Student Monitoring file or on a Financial Aid History Report request. More information on these processes is available in the NSLDS Transfer Student Monitoring/ Financial Aid History User Guide and Batch File Layouts.

Contact Information

If you have questions about NSLDS enrollment reporting or using the NSLDS Professional Access Web site, contact the NSLDS Customer Support Center at 800/999-8219. You can also contact Customer Support by e-mail at nslds@ed.gov.

   

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