14


Supporting Statement for Clearance of the

National Student Loan Data System Data Collection


  1. Justification


  1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.


Title IV, Part G of the Higher Education Act of 1965, as amended by the 1998 Amendments to the HEA (P.L. 105-244) section 485B, requires the Secretary of Education to establish a National Student Loan Data System (NSLDS) that contains information about Federal Family Education Loan (FFEL) Program loans, Federal Perkins loans (including National Direct Student Loans and National Defense Student Loans), William D. Ford Direct Student loans (Direct Loan), Federally Insured Student Loans (FISLs) and Federal Grants (including PELL, Academic Competitiveness Grants (ACG), National Science and Mathematics Access to Retain Talent (SMART) and Teacher Education Assistance for College and Higher Education (TEACH) Grants. NSLDS is used for research, policy analysis, monitoring student enrollment, identifying loan holders and servicers, calculating default rates, monitoring program participants, and verifying student aid eligibility.


  1. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.


NSLDS collects data from the following sources:


















NSLDS users are from a variety of government and non-government organizations, as well as individuals including:



The data are collected and used for the following purposes:
































  1. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision of adopting this means of collection. Also describe any consideration of using information technology to reduce burden.


The Department of Education has selected an Information Engineering (IE) methodology using Computer Aided Systems Engineering (CASE) tools to design and maintain NSLDS. This enables the Department to provide and maintain verification and formatting software for most data providers (i.e., those who use MVS and MS/DOS operating systems). The Department provides software specifications to data providers using other operating systems. In addition, the Department is accepting all data electronically to reduce the burden associated with data entry and forms handling.


The Department has enhanced the NSLDS web functionality to allow schools, and guaranty agency to update records in real time, performing the same editing used in batch updates. This is especially useful for guaranty agencies when error’s impacting a student’s eligibility need to be quickly resolved. The web updating process includes importing and load data directly for a data provider PC or mainframe in to NSLDS web site.


The Department has also consulted extensively with the Community regarding system design to ensure that the design places the least possible burden on data providers for example; an extract-based approach for providing data to NSLDS was developed based upon input from schools and guaranty agencies, as well as upon design considerations. This includes allowing all data providers to establish their own reporting schedules to NSLD S (with monthly being the minimum) as long as it is provided within NSLDS reporting guidelines. This offers the simplest requirement for data providers, while maximizing the potential for timely submission of accurate data from the community. Finally, taking advantage of the central NSLDS database to perform Enrollment Reporting and Transfer Student Monitoring streamlines these processes and enables schools that wish to automate their own processes to do so. Schools are able to update individual enrollment information through the NSLDS web site, streamlining the school’s administration of enrollment tracking.


In working towards the TSV for NSLDS reengineering a number of things occurred that have kept FSA moving forward. It is important to note that the target date of September 2009 for having a re-engineered NSLDS was predicated on the procurement of a complete solution that was to happen in Q4 of 2006. The acquisition preparation and a complete set of high level requirements were prepared and ready to go out for solicitation in June 2006. However, FSA executives at the time did not approve this to go out because it was acquiring a complete solution for a new system all at once and there was concern regarding the risk.


At that time, senior management wanted to "rethink" the approach to re-engineering NSLDS to determine if it could be done in a multi-year, multi-phased approach. Also at that time FSA leadership asked a group of senior managers to determine an acquisition strategy that did not put all the risk of execution with per se a single contractor. As a result, two separate things occurred:


1) A modular contracting strategy was developed called the Enterprise Development Support Services, which established a Requirements, Development, Testing, IV&V, and Program Management Support vendor "pools" whereby the acquisition of a solution could be procured by purchasing development life-cycle phases a piece at a time. The Development "pool" was established in 9/08, IV&V/PM were established 08/09 and testing/requirement in 09/09--as you can see a majority very recent.


2) A 5-phased approach from transitioning from legacy NSLDS to the reengineered (we call NSADS project) was developed in 12/07 that articulates how the transition to the target state system would occur over multiple years and phases. A high-level document explains that this is an ever evolving transition plan.


Also during this time a number of projects were conducted that looked in depth at the FFEL reporting process across FSA (not just NSLDS) to include the Debt Collection Management System and the financial reporting of lenders and guarantors. Essentially, three things were done regarding this, as it is 75% of the data managed by NSLDS:


1) Consideration of the entire FFEL data flow process between industry and FSA was given and documented that "as is" business process. Next, a workgroup of FSA and Department of Education Budget Services (primary user of NSLDS data) was developed to analyze why the collected data was chosen to be collected, what business need it supports, and how to streamline and standardize the data collection process.


2) The "to-be" FFEL data process was documented in order to leverage opportunities to streamline FSA’s business process AND use common and consistent data standards across the industry.


3) Working with the FFEL community, FSA documented the data standards that would be used in reengineering NSLDS and other target state solution such as DMCS.


Starting in September 2008, FSA awarded a requirements contract for Phase 1 of NSLDS reengineering, which was completed in June 2009. This initial phase included the building of a new NSLDS database of which its structure leverages those data standards developed in 08.


Between July 2009 and September 2009, FSA competed the development contract for Phase 1, which was awarded the last week of September, and are now in the midst of beginning the design and development of the first phase of reengineering NSLDS.

Starting in August 2009, FSA began documenting the vision and high level requirements for Phase 2 that we expect to be completed December 2009. It is expected that the detailed requirements will be competed in Spring 2010.


The above is how NSLDS has moved towards its Target State Vision for the past three years. FSA’s transition plan is a living document that continually is refined as FSA articulates, in further detail, each phase that needs to take into consideration all the impacts that have occurred in the last two years.


FSA is also positioning themselves for data standards and reengineering efforts that could reduce data collection burden.


1) FSA can integrate the NSLDS data provider process with the assignment process of defaulted assets which is planned when both NSLDS and Debt Collection solutions have been reengineered--gives an opportunity to reduce data collected in current assignment process becomes so of the data already exists in reporting loans to NSLDS. This likely is Phase 3 of transition plan.


2). FSA has aligned some data elements across business needs for financial reporting and assignments that reduces a couple of elements collected to represent loan fees.


3). FSA has targeted 14 elements from the Guaranty Agency Annual Financial Report that can be eliminated as a result of data can be aggregated that would already be present in a reengineered NSLDS. This is anticipated in Phase 2 of transition."


The system implementation is multi-year, and as a result, parts of it will be replaced in the next 3 years but not the whole solution, which is planned to completely have replaced NSLDS functionality by the middle of FY2014.



  1. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use of the purposes described in item 2 above.


The Department reviewed its existing Title IV systems to identify any instances where required data is already collected or maintained. In those cases, NSLDS either (a) takes the data from the existing system instead of levying additional burden on the community, or (b) replaces the existing data collection effort. One of the first significant reporting processes eliminated by NSLDS was the guaranty agencies requirement to report all FFEL loan volume on the Annual Loan Tape Dumps. Additionally NSLDS is now used to calculate the loan guaranty, disbursement, and cancelation data once reported by guaranty agencies on the quarterly Guaranty Agency Financial Report Form. This provides the Department the loan level detail to support the payment of the Loan Processing and Issuance Fee agencies on the quarterly Guaranty Agency Financial Report reducing the agency’s reporting burden.


  1. If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.


The Department has designed NSLDS to accommodate reporting through Personal Computer, which is the minimal equipment required to participate in Title IV Aid Programs. The Department provides software to data providers with the most common types of personal computers, which reduces the amount of burden on smaller organizations. The Department distributes Personal Computer software that can be used to develop the NSLDS extract for data providers without existing databases. In addition, the Department accepts data from any source (e.g., servicer, guaranty agency, school) designated by an organization, at the organization’s request.


  1. Describe the consequences to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.


The Department has worked with the financial aid community reporting to NSLDS to increase frequency in reporting. Internal systems report to NSLDS weekly and 50 % of the guaranty agencies report more frequently than monthly will the remaining agencies and schools report at least monthly. Guranty Agencies have the ability to update loan data in real time using the NSLDS on-line updating capabilities. This ensures that all of the functionality listed in item #2 are based on the most current data. . This minimizes the amount of student aid that is awarded to students who are ineligible, as well as ensures that data corrections are received quickly for students whose aid applications have been erroneously rejected as a result of prescreening or post screening. Each day’s delay in using accurate data to prescreen aid applications may represent a significant cost to the Government, especially with the implementation of the Direct Loan program.


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  1. Explain any special circumstance that would cause an information collection to be conducted in a manner:


Requiring respondents to report information to the agency more often than quarterly:


Many of the business functionalities in which the NSLDS data is used require the timely reporting of loan balances and loan statuses. Thus, Department held loans and grants are reported weekly, at least half of the guaranty agencies report more frequently monthly and the rest of the agencies and Perkins school report monthly.


  1. Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instruction and record keeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.


The Department of Education consulted extensively with guaranty agencies, through the National Council on Higher Education Loan Programs (NCHELP), and schools, through a Financial Aid Administrators Advisory Panel. Annually NSLDS makes presentations at the Federal Student Aid Conferences, where ideas and concerns are solicited from attendees. The Department attends and conducts formal and informal meetings, presentations, question-and-answer sessions, and interviews with a variety of student aid community representatives and organizations. We addressed data availability, collection frequency, processing requirements, data elements to be reported, and data formats.


Substantive discussions continue with members of NCHELP’s Program Operations NSLDS Sub-Committee, meeting quarterly to discuss on going enhancements and issues. NSLDS regularly meets with focus groups and representatives from the schools. Representatives participate in regular meetings and conference calls with the Department and with the NSLDS contractor regarding data requirements and definitions and the NSLDS design. These representatives from NCHELP and the schools consult with other members of the community and provide comments to the Department so that the widest possible insight from the financial aid community is brought into NSLDS design sessions.


This information collection will publish appropriate Federal Register notices to solicit public comments.


  1. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.


There were no decisions to provide any payments or gifts to respondents, other than remuneration of contractors or grantees.


  1. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulations, or agency policy.


There were no assurances of confidentiality provided to respondents. The information collected here is available to the public under the Privacy Act of 1974.


  1. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.


There are no questions of a sensitive nature in this collection of information.


  1. Provide estimates of the hour burden of the collection of information.


Approximately 36 guaranty agencies and 1868 schools report to the NSLDS. The reporting burden for these organizations varies because of differences in size and function. Guaranty agencies’ burden varies based on the number of loans each has guaranteed and upon the number of lenders from which they must obtain data. Guaranty agencies report only on FFEL Program loans. Schools’ burden varies based on the number of students who have obtained Federal Perkins loans at each school. Also, approximately 8196 schools, that do not report Perkins loans, report various other data to NSLDS such as enrollment data and transfer student monitoring. Direct Loans, FFEL non-defaulted loans purchased by the Department and serviced by contractors, +Federal Grants, Department held Perkins Loans, and Defaulted loans held by the Department are all reported by internal Department Systems.


Generally, larger guaranty agencies and schools are more automated, but also have a large number of records to report. Smaller agencies and schools may use a service bureau for their processing, maintain only paper files, or use lower scale processing platforms such as microcomputers. Based on information received from NCHELP and the FAA Advisory Panel, an entire spectrum of processing platforms are represented in their respective communities. The Department has estimated the range of burden hours per respondent to be 2 to 8 hours per response, with an average of 6 hours per response.


The Department estimated the loan-reporting burden as follows:


The Department estimated the “other data” burden as follows:



The Department assumed that all guaranty agencies are large, but highly automated, relative to schools. However, while the number of guaranty agencies was reduced the remaining agencies assumed the reporting responsibilities of the closed agencies. Therefore, we assumed 8 hours per response for the guaranty agencies. We assumed that approximately 92% of the schools submitting Perkins loans (1794) will have data submitted by large, highly automated, servicers, so 4 burden hours were attributed to this group. We assumed that the remaining schools, or 74 schools, are medium-sized and we attributed slightly more burden hours (8) to this group to allow for internal process on microcomputer-based systems and some mainframes. We assumed approximately 88% of the schools submitting “other data” (6328) will have the data submitted by large, highly automated servicers, so 2 hours were attributed to this group. We assumed the remaining schools, or 1868schools, are medium-sized and we attributed slightly more burden hours (6) to this group to allow for internal process.


We multiplied the total annual burden hours by the average burden hours to obtain the annual burden hours of 157,456. These calculations are presented below:


Respondent/Type

Number of respondents

Responses per month

Responses per Year

Average number or hours per response

Total Burden Hours

Guaranty Agencies (GA DPI.ZIP file)

36

24

864

8

6,912

Services Schools – Perkins (Perkins DPI.ZIP file)

1,794

12

21,528

4

86,112

Non-Serviced Schools – Perkins (Perkins DPI.ZIP file)

74

12

2,088

8

16,704

Serviced Schools – “Other Data” (Enrollment Reporting Guide)

6,328

2 times per year

12,656

2

25,312

Non- Serviced Schools – “Other Data” (Enrollment Reporting Guide)

1,868

2 times per year

3,736

6

22,416

TOTAL

10,100


40,872


157,456









  1. Provide an estimate of the total annual cost burden to respondents or record keepers resulting from the collection of information.


There are no start-up costs for respondents.


14. Provide estimates of annualized cost to the Federal government.


Cost Element Amount


Contract cost, including design,

Development and operations (at

The VDC) $8.6 million


15. Explain the reasons for any program changes or adjustments.


The total burden hours will increase by 22,616 hours due to an increase in volume of loans, grants and number of respondents.


16. For collection of information whose results will be published, outline plans for tabulation and publication. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.


This information is not intended for use as a statistical publication.


  1. If seeking approval to not display the expiration date for OMB approval of the information, explain the reasons that display would be inappropriate.


The expiration date for OMB approval of the information collection will be displayed.


  1. Explain each exception to the certification statement identified in Item 20, Certification for Paperwork Reduction Act Submissions, of OMB Form 83-1.


The collection of information complies with 5 CFR 1320.9.


  1. Collections of Information Employing Statistical Methods


None.