ED Urges Schools to Resolve Old Overpayments Reported to NSLDS

By Jill Desjean, Policy & Federal Relations Staff

In late December, approximately 1,600 institutions received an Aid Overpayments Compliance Notice email from the National Student Loan Data System (NSLDS). The message indicated that the institution was identified in a review of NSLDS records as having reported student aid overpayments that were not resolved or referred to the Department of Education’s (ED) Default Resolution Group within the required timeframes for such reporting. Schools are urged to resolve the old overpayments within 60 days.

Federal regulations in 668.22(h)(4)(iii) & (iv) permit institutions to enter into repayment arrangements with students who owe an overpayment of Title IV funds. The maximum permitted timeframe for repayment is two years from the date the institution determined the student withdrew. Institutions are required to report students who do not fulfill their repayment obligation within the maximum two-year timeframe—or who otherwise fail to meet the terms of the repayment arrangement—to ED’s Default Resolution Group.

Guidance issued in 1998 introduced functionality for institutions to report Title IV aid overpayments in NSLDS. At that time, institutions were instructed to report both current and historical overpayment information into NSLDS. Institutions were also advised of their responsibility to report both new overpayments and changes to previously reported overpayments to NSLDS within 30 days of becoming aware of the new or changed overpayment status.

NSLDS has created the Aid Overpayments Compliance Report for institutions to either arrange for regularly-scheduled delivery to their Student Aid Internet Gateway (SAIG) mailbox, or to request on demand. The emailed notice announcing availability of the report requests that institutions resolve all records on their reports within 60 days of the notice, but there is no mention of enforcement efforts or penalties for not meeting that deadline. However, because students will continue to appear on these reports until institutions resolve them in NSLDS, it is in schools’ interest to resolve these cases promptly in order to come into compliance.

Reasons students appear on the Aid Overpayments Compliance Report may include:

  • Erroneous reporting, such as creating an NSLDS aid overpayment record when no overpayment existed for the student. This may include instances in which the institution repaid funds to ED and attempted to recoup those funds from the student. Because the student owes the institution, it is not a Title IV overpayment, and should not have been reported to NSLDS. For institutions that follow a practice of repaying ED directly and creating a student liability to the institution, they should confirm with their business offices how long this practice has been followed and review the dates of reported overpayments. If overpayments were reported during the time that such a practice was followed, overpayments were likely reported in error, in which case the emailed notice from NSLDS instructs schools to delete the overpayment record manually in NSLDS. This action will remove students from future reports.

  • Accurately reported overpayments that were never updated as either transferred to the Default Resolution Group or having been repaid in full by the student according the terms of the repayment arrangement. Manual resolution in NSLDS, following the instructions provided in the emailed notice, will remove students from future reports.

  • Accurately reported overpayments that were not repaid according to the terms of the repayment arrangements, but were never reported to the Default Resolution Group. These overpayment records must be both referred to the Default Resolution Group and manually updated in NSLDS in order to be removed from future reports.

Given that this is the first time NSLDS has made the Aid Overpayments Compliance Report available to schools, it is likely that institutions will find entries for students whose attendance falls outside of record retention requirements and that, consequently, institutions will not have access to the information they need in order to update the overpayment record. When presented with this scenario, an ED official pointed to the example of erroneous aid overpayments that the recent NSLDS notice indicated should be deleted. Institutions that have retained records beyond mandatory records retention limits, however, must use those records to update NSLDS.

 

Publication Date: 1/29/2019


Karen G | 1/29/2019 9:40:59 AM

After reviewing the list - I found VERY old records. Our college always used CPS online to perform the calculations, but when I attempt to retrieve that detail from CPS, it is not there. How long is CPS Online required to store that detail??

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Revised Draft 2020-21 FAFSA Open For Second Round of Public Comment

MORE | ADD TO FAVORITES

What Does It Mean to Early Implement and Document Rescission of the Gainful Employment Regulations?

MORE | ADD TO FAVORITES

VIEW ALL
View Desktop Version