Title IV financial aid reporting is an essential part of higher education administration, but it can be a complex and time-consuming process especially for small teams. An integrated student information system with financial aid software simplifies reporting and makes it more manageable for all departments.
Financial aid software is also an important tool to track and verify data, generate accurate reports, and make sure every department has access to the same data.
Schools that participate in Title IV programs are required to file certain reports with the federal government. There is a significant amount of data that goes into building these reports, but schools have a free resource at their disposal: The National Student Clearinghouse (NSC).
The NSC helps facilitate the reporting process to the National Student Loan Data System (NSLDS) by providing a pre-audit of student data. Schools are still responsible for maintaining and reporting the data, but the NSC helps ensure student data is accurate and formatted correctly for the NSLDS.
Using the NSC’s free pre-audit service with Campus Cafe Software’s pre-built NSLDS/Clearinghouse enrollment reports makes the reporting process – for Title IV and any other internal or external obligations – more reliable and more efficient.
In this post, we’ll provide an overview of how school’s submit data to the National Student Clearinghouse and National Student Loan Data System.
What is the National Student Loan Data System?
A national database of federal loans and grants awarded to students under the Title IV of the Higher Education Act
It tracks student funding from approval to disbursement and repayment; also tracks deferment, delinquency and final closure
The National Student Clearinghouse is a Free Resource
Any post-secondary school that participates in Title IV programs has the option to use the NSC, a free resource and non-profit intermediary, to review and submit reports on their behalf to the NSLDS.
Over 3,600 post-secondary institutions utilize the NSC, representing 97% of U.S. enrollment.
There are two ways to transmit the information to NSLDS: Schools can send it directly to NSLDS or through the NSC.
At first glance, it might seem easier for schools to send information straight to the NSLDS and skip the step of working with the NSC. However, financial aid experts say the NSC is a valuable tool and schools would be wise to take advantage of its free services.
“The National Student Clearinghouse is a pre-audit before data goes to the government,” explains Robert Lenk, MBA, Director of Customer Success at Campus Cafe Software. “[The NSC] makes sure everything seems correct and keeps the school in compliance because it’s submitting cleaner data to the government.”
This audit saves a school time and resources by flagging errors and working with schools to make corrections to inaccurate student data. Here’s how schools and the NSC work together:
- Schools submit monthly data to the NSC to be checked for accuracy and consistency.
- NSC compares the file to the previous month’s report. If there are errors, omissions or inconsistencies, the NSC alerts the school to make revisions and resubmit the report.
- Once the NSC clears the report, it transmits the information to the NSLDS.
Stringent Requirements for Title IV Federal Financial Aid Reporting
The government keeps close tabs on how much student borrowers receive, their eligibility, loan repayment requirements and when loans will begin to accrue interest.
Under federal regulations, any post-secondary institution that offers Title IV funds must submit regular reports on students’ enrollment status and program participation. That includes whether a student is full time or part time and information on their major or area of study.
The government requires regularly updated information to ensure students receive the proper funding and to determine loan repaying and interest accrual. Private student loans and school-awarded scholarships are not subject to Title IV reporting.
Types of Title IV Loans and Grants
The federal government awards student loans, grants and work-study programs to students at eligible institutions.
Common Challenges Schools Encounter With Title IV Reporting
Under the Higher Education Act of 1965, universities, colleges and career schools that administer federal aid to students are required to submit regular, monthly reports on students’ enrollment status and eligibility.
The financial aid office and the registrar’s office are responsible for gathering and processing this data, with some information coming from admissions and enrollment.
If a school doesn’t report its data correctly and on-time, it risks being audited and put on provisional status. In the worst cases, a school can be ruled ineligible to administer federal financial aid.
When it comes to Title IV financial aid reporting, below are some of the most common challenges schools encounter.
Unreliable Data Between Departments
Departments need to be able to share information and have access to updated, real-time data. If your school doesn’t use an integrated SIS or financial aid software, it could lead to errors in your reports.
For instance, the registrar keeps records on students’ enrollment status as full time or part time, which is information the financial aid office uses for its Title IV reports. If the registrar’s office isn’t sharing updated information with the financial aid team, or if the departments maintain their own separate databases, those reports could have inaccuracies.
Time-Consuming Manual Data Entry
No one likes entering information into spreadsheets that have to be updated weekly, monthly, or by term or semester. Keying in student enrollment and program information takes time and resources that many schools simply don’t have available.
Additionally, when staff is manually entering information into databases, it can lead to human error. If staff members are sharing data, they might not use the most updated information. Any of these scenarios can lead to incomplete or inaccurate reports.
Filing Directly With the NSLDS (and Not Using the NSC)
Schools are not required to work with the NSC, but it helps improve the accuracy of their data so schools can maintain their standing with the government and the NSLDS.
When a school reports directly to the NSLDS, it’s missing out on opportunities to utilize the NSC’s free services to find and correct errors, which can lead to audits or delays in funding.
How the National Student Clearinghouse Helps Schools Avoid Reporting Issues
When a college, university or career school submits bad data, it can face additional reporting requirements, probationary status and even Title IV program termination. Utilizing the NSC’s free services saves schools time and resources, so they avoid the following issues when submitting their Title IV reports:
- Compliance Issues: If a school doesn’t submit data on time or sends the wrong issues, they could be flagged for audits.
- Audits: A school could be subjected to a further investigation of their data and the audit goes to the Department of Education, which requires additional reporting and oversight.
- Status Changes: If a school has too many errors or a pattern of problems, they could be put on preliminary watch status. If the problems persist and the school doesn’t return to good standing, it could be elevated to a higher watch status. And if problems aren’t corrected, a school risks losing their eligibility to participate in the Title IV program.
- Loss of Title IV Eligibility: When a school is removed from the Title IV program, it can’t offer students access to federal loans, grants and work study programs, which can impact enrollment.
Use Pre-Built Reports to Submit Data to the National Student Clearinghouse
With an integrated student information system like Campus Cafe Software, financial aid teams can use a drop-down menu to quickly access information on students’ enrollment status, program of study, date they started, stopped or completed their study.
Our pre-built reports feature pulls information from different departments (registrar, financial aid, admissions) and imports it into one report that goes directly to the NSC. When everything checks out, the NSC sends your clean report to the NSLDS.
It’s important to note that not all student information systems have this export function. The Campus Cafe team also updates the reports to comply with any changes from the NSC or NSLDS. This saves your financial aid team time and improves data reliability.
Some schools utilize free government tools for some aspects of Title IV reporting. These systems, like EdExpress and EdConnect, let schools enter, edit, and manage records and financial aid. However, these programs do not include enrollment data, which is a requirement for Title IV reporting.
Also, those programs may not connect with other databases and software used by admissions and the registrar’s office, which can lead to problems with missing or inconsistent information.
The Bottom Line: Pre-Built Reports Simplify Reporting
There’s a lot that goes into Title IV reporting and it’s difficult to build the reports if you lack reliable data.
Our financial aid software includes access to pre-built reports for all users, which makes the reporting process smoother and more reliable, while improving student data management.
“The system is fully integrated from admissions to enrollment and billing and financial aid, and that’s a huge advantage,” said Lenk of the software.
When your staff has access to pre-built reports and updated data, your team can produce reliable financial aid information that supports students and helps financial aid teams stay compliant.
Ready to see how Campus Cafe Software’s pre-built reports save financial aid teams time and resources? Contact us for a demo today.