May 3, 2007

Some access restored to NSLDS

Posted in Student Loan News, The Financial Aid Process at 9:59 AM by Joe From Boston

Well it’s a start at least- Guarantors have been given access to NSLDS, which is good news for students.  We’ve had customers here who practically have to sign away their first born child to prove to a lender/guarantor that they’re in school still, or conversely, that they’re out of school.  Because lenders still don’t have access, lenders are working with old data or no data whatsoever, and the onus is on the student to provide proof – and as any college student knows, getting official documentation from your college takes time.  Time which is quite precious if you suddenly and incorrectly find yourself in repayment because your lender thinks you’re out of school!

Read the article from the NY Times here.

Some Access to Student Finance Data Is Restored

Published: May 3, 2007

The federal Education Department announced yesterday that it was restoring some access to a database with personal information on millions of financial aid applicants.

The department restricted access last month to the database, the National Student Loan Data System, out of concern that student lenders or other marketers were improperly obtaining private information about potential borrowers. Loan companies, guarantors (the agencies that guarantee federal loans against default) and other entities were barred.

The department outlined a series of new security procedures yesterday in a letter sent to 35 guarantors. To get into the database, guarantors will have to provide the names of employees who will be given access, along with certification that the company will comply with access rules.

Other entities, like lenders and loan-service companies, will have to wait their turn to regain access.

Pam Eliadis, director of the department’s student loan database group, wrote that the database was “not to be used for the marketing of student loans or other products or services.” The database is meant to help determine eligibility for federal financial aid and to assist in loan collection.

Also yesterday, Representative George Miller, Democrat of California and chairman of the House education committee, asked the Federal Trade Commission to investigate marketing practices by student loan companies. Letters to students “are often intentionally designed to confuse or mislead,” Mr. Miller said, citing two examples: one from the College Debt Corporation and one from Education Loan Funding. He said the companies had used official-looking government logos.

Brian Cain, a lawyer for Education Loan Funding, said the company would cooperate. Calls to the College Debt Corporation were not returned.


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