Notes from Day 2 of the US Department of Education 2014 FSA Conference

Conference Day 2 began for me with a breakout session addressing the process for reporting gainful employment information to the National Student Loan Data System (NSLDS). As mentioned in yesterday's posting, most schools will be required to report six years worth of student gainful employment data to NSLDS by July 31, 2015. Department representatives stated that NSLDS will be open for reporting in early 2015. When questioned if there might be an extension of the July 31, 2015 due date, today's speaker emphasized that the Department believes there is plenty of time for schools to gather and submit the data by this deadline.

Schools are required to only submit data on students enrolled in a gainful employment program, and only data on students who are Title IV aid recipients. Data that schools reported to NSLDS in 2011 pursuant to the prior gainful employment regulations will not be available to reuse. Student financial data to be reported to NSLDS includes private loan amounts, institutional debt, tuition and fees, and allowance for books, supplies and equipment as included in the school's cost of attendance. Schools are not required to submit student Title IV loan information because that information is already in NSLDS. Schools will be able to submit gainful employment data online by either individually entering student data or submitting an Excel spreadsheet template. Schools will also have the option to submit data through batch processing.

The Department is still working on a number of details connected with this data collection process. Attendees were told to expect an updated NSLDS Gainful Employment User Guide and an updated Gainful Employment Instruction Guide and Submittal Template in early 2015. The Department also indicated that they will be hosting webinars in 2015 to assist schools in complying with this data submission.

Next I attended the breakout session regarding the cohort default rate (CDR) challenge and appeal process. After an overview of the CDR process and reports available to schools through NSLDS, the Department representatives described the process for filing CDR challenges, adjustments and appeals. These include incorrect data challenges, uncorrected data adjustments, loan servicing appeals and erroneous data appeals. The Department representatives emphasized the need for schools to understand the timing deadlines for submitting challenges or appeals. If the challenges or appeals are not submitted within the established timelines then the Department will not consider the merits of the school's claim.

Today's speakers also addressed the issue of loan servicer appeals. In general, schools can challenge the inclusion of a student in its CDR if the student's loan was improperly serviced. However, the minimum loan servicing standards for CDR appeals purposes is very low. In general, a loan will be considered improperly serviced only if the borrower made no payments on the loan and the servicer failed to attempt one phone call, failed to send a final demand letter, and failed to perform skip tracing. Today's speaker emphasized that it is very unlikely that a federal loan servicer did not meet these minimum servicing requirements.

This afternoon’s breakout sessions included a big-picture overview of the various federal student aid systems. The major federal student aid systems include the Central Processing System (CPS), Common Originating and Disbursement (COD), the National Student Loan Data System (NSLDS), Grant Management System (G5), the Student Aid Internet Gateway (SAIG) and the Postsecondary Education Participants System, among others. Today’s presentation offered a general overview of these systems and how they relate to each other. The presentation materials would be a valuable tool for schools to use for purposes of introducing new financial aid administrators to the various financial aid systems.

Today’s sessions ended with an open forum. The purpose of the open forum is to allow participants at the conference to ask specific questions to a panel of Department officials. During today's session, Department officials indicated that they are working on guidance to provide schools with additional flexibility in the loan counseling process. While it is important to note that this guidance is not finalized, the proposal discussed would allow schools to require that students prepare a personal financial budget as part of the entrance counseling process. Schools could not use these budgets to make determinations that would limit loan disbursements.  However, schools could use the budgets as a tool to counsel the students in an effort to educate them as to an appropriate amount of debt for their education. Another interesting development mentioned by Department officials was the creation of a multi-regional team to work with corporate owned school systems with schools located in different regions of the country. The Department’s goal with this new multi-regional team is to promote consistent treatment of all schools within the same ownership group regardless of their location.

The Department’s PowerPoint presentations for all the sessions from the 2014 FSA Conference, including the sessions described above, can be downloaded from the FSA Conference website.