[Federal Register Volume 59, Number 124 (Wednesday, June 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15687]


[[Page Unknown]]

[Federal Register: June 29, 1994]


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DEPARTMENT OF EDUCATION

 

Privacy Act of 1974; System of Records

AGENCY: Department of Education.

ACTION: Notice of a new system of records.

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SUMMARY: In accordance with the Privacy Act of 1974, as amended, the 
Department of Education (ED) publishes this notice of a new system of 
records for the National Student Loan Data System as authorized by the 
Higher Education Act of 1965, as amended.
    This system is being designed to maintain loan-level information on 
Title IV aid recipients. The NSLDS is being developed in three phases 
with thirteen major capabilities. Phase I will provide a central 
verification system for use in determining the eligibility of Title IV 
aid applicants with respect to prior aid, existing defaults and grant 
overpayments, default rate calculations, audit planning, research 
studies support and policy development support, budget analysis and 
development, monitoring of lender and guaranty agency billings, and GSL 
Program administration assessment. Phase II will track changes in the 
enrollment status of students, as reported by schools in a standard 
format (Standardized Student Status Confirmation Reporting), track loan 
transfers, track borrowers, and provide default prevention notices to 
schools (preclaims assistance and supplemental preclaims assistance 
notification). Phase III will provide financial aid transcript 
information to schools electronically and Credit Reform Act (CRA) 
support (requirements for support of the CRA currently includes 
providing, to the Office of Management and Budget, data on lender 
interest benefits and special allowance payments, defaulted loan 
balances, and supplemental preclaims assistance payments information).
    The primary function of the NSLDS will not be the collection of 
student loans. However, the Department expects as a result of closer 
monitoring of financial aid transactions, that the Department will 
collect information that will aid in the collection of some loan and 
grant overpayments. Thus, a secondary purpose of this systems of 
records is to aid in the collection of debts owed under Title IV, HEA 
programs.

DATES: Comments on the proposed routine uses for this system of records 
must be submitted by 30 days after the publication in the Federal 
Register. The Department filed a report of the new system of records 
with the Committee on Governmental Affairs of the Senate, the Committee 
on Government Operations of the House of Representatives, and the 
Administrator of the Office of Information and Regulatory Affairs of 
the Office of Management and Budget (OMB) on June 23, 1994. This system 
of records will become effective after the 40-day period for OMB review 
of the system expires on August 2, 1994, unless OMB gives specific 
notice within the 40 days that the system is not approved for 
implementation or requests additional time for OMB review. The 
Department will publish any changes to the routine uses that are a 
result of the comments.

ADDRESSEES: Comments on the proposed routine uses should be addressed 
to the Privacy Act Officer; Information Management and Compliance 
Division; Office of Information Resources Management; U.S. Department 
of Education; 400 Maryland Avenue SW.; Room 5624; GSA Regional Office 
Building 3; Washington, DC 20202-4651. All comments submitted in 
response to this notice will be available for public inspection, during 
and after the comment period, in Room 5624, GSA Regional Office 
Building 3, 7th and D Streets, SW., between the hours of 8 a.m. and 
4:30 p.m., Monday through Friday of each week except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Susan Pentecost; Branch Chief, 
National Student Loan Data System; U.S. Department of Education; 400 
Maryland Avenue, SW.; Room 4640; GSA Regional Office Building 3; 
Washington, DC 20202; (202) 708-8125. Individuals who are hearing 
impaired may call the Federal Dual Party Relay Service at 1-800-877-
8339 ( in the Washington, DC 202 area code, telephone 708-9300) between 
8 a.m. and 7 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: The Privacy Act of 1974 (see 5 U.S.C. 
552a(e)(4)) requires the Department to publish in the Federal Register 
this notice of a new system of records. The Department's regulations 
implementing the Privacy Act of 1974 are contained in the Code of 
Federal Regulations (CFR) at 34 CFR part 5b.
    The NSLDS database is being established to comply with amendments 
to Section 485B of the Higher Education Act (HEA) of 1965.
    The NSLDS is being developed in three phases with thirteen major 
capabilities. Phase I will provide a central verification system for 
use in determining the eligibility of Title IV aid applicants with 
respect to prior aid, existing defaults and grant overpayments, default 
rate calculations, audit planning, research studies support and policy 
development support, budget analysis and development, monitoring of 
lender and guaranty agency billings, and GSL Program administration 
assessment. Phase II will track changes in the enrollment status of 
students, as reported by schools in a standard format (Standardized 
Student Status Confirmation Reporting), track loan transfers, track 
borrowers, and provide default prevention notices to schools (preclaims 
assistance and supplemental preclaims assistance notification). Phase 
III will provide financial aid transcript information to schools 
electronically and Credit Reform Act support (requirements for support 
of the CRA currently includes providing, to the Office of Management 
and Budget, data on lender interest benefits and special allowance 
payments, defaulted loan balances, and supplemental preclaims 
assistance payment information).
    The primary function of the NSLDS will not be the collection of 
student loans. However, the Department expects as a result of closer 
monitoring of financial aid transactions, that the Department will 
collect information that will aid in the collection of some loan and 
grant over payments. Thus, a secondary purpose of this systems of 
records is to aid in the collection of debts owed under Title IV, HEA 
programs.
    The NSLDS database will be used to pre-screen Title IV aid 
applications to prevent the award of funds to ineligible applicants. 
The database will also be used to provide the following information: 
(1) A centralized verification system for determining the eligibility 
of Title IV aid applicants; (2) shared access to comprehensive student 
loan database; (3) a borrowers profile history to support research and 
analysis of student financial assistance program issues; (4) a database 
on participating lenders, guaranty agency and school profiles; and (5) 
an efficient data transfer. This notice includes proposed routine uses 
for the information contained in the system of records.
    The Department will collect, for each student loan stored on the 
NSLDS, data about the identification of borrowers; loan type(s) and 
amount(s); total amount of all student loans received and remaining 
balance(s); name of guaranty agency, lender, holder, and servicer; 
school attended when loan was made; and defaults, deferments, 
forbearance, and cancellations.
    Access to the data maintained on the NSLDS database will be 
accessible by guaranty agencies, schools and ED. Data in the NSLDS will 
be maintained on mainframe computers with back ups of the data stored 
on magnetic media. Direct access is restricted to authorized contract 
and agency personnel in the performance of their official duties.

    Dated: June 23, 1994.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.

    The Assistant Secretary for Postsecondary Education publishes a 
notice of a new system of records to read as follows.
18-40-0039
    National Student Loan Data System.
    None.
    E-Systems, Greenville Division, P.O. Box 6056, Greenville, Texas 
75403-6056.
    Borrowers who have applied for loans under the Federal Direct 
Student Loan Program; borrowers who applied for loans under the Federal 
Insured Student Loan (FISL) Program; borrowers who applied for loans 
under the Federal Family Education Loan (FFEL) Program; borrowers who 
applied for loans under the Federal Perkins Loan Program (including 
National Defense Student Loans and National Direct Student Loans); 
borrowers who had a loan discharged in bankruptcy under the FISL 
Program and on which ED paid a claim to the holder of the loan; 
borrowers who defaulted on their loans or the borrower died or became 
disabled; borrowers whose loans were guaranteed by a guaranty agency 
and who defaulted under the FFEL Program if those loans were assigned 
by the guaranty agency to ED; FFEL borrowers whose lenders have 
reported them delinquent or reported their locations as unknown; FFEL 
borrowers whose loans were cancelled due to borrower's death or total 
and permanent disability, or whose loans were discharged in bankruptcy 
under the FFEL Program; FFEL borrowers whose loans have been assigned 
to ED due to false loan certification; borrowers under the Federal 
Perkins Loan Program whose loans have been assigned to ED because of 
default, and borrowers under the Federal Perkins Loan Program or under 
the FFEL Program whose loans have been assigned to ED due to school 
closing; borrowers whose loans were served by guaranty agencies for 
which ED has assumed management responsibility; and Federal Pell and 
Federal Supplemental Educational Opportunity Grants on which 
overpayments are collected by the Department.
    Contains records regarding (1) an applicant's demographic 
background; (2) loan and educational status; (3) data on family income; 
(4) name; (5) social security number; (6) address; (7) amount of claim; 
(8) forbearance; (9) cancellation; (10) disability; (11) deferment 
information; (12) profile information on schools, lenders and guaranty 
agencies; (13) student/borrower date of birth; (14) loan level detail; 
(15) school(s) attended by student and/or received aid; (16) loan 
repayment disclosure information; (17) student/borrower anticipated 
school completion date; (18) indicator of lender-of-last-resort loans; 
(19) loan refund/cancellation information; and (20) grant overpayment 
date and amount.
    Higher Education Act of 1965, Title IV-A through IV-G, as amended, 
(20 U.S.C. 1092b).
    This system of records is maintained for the purpose(s) of: (1) 
Providing pre-screening for Title IV aid eligibility; (2) providing 
default rate calculations for schools, guaranty agencies, and lenders; 
(3) reporting changes in student/borrower enrollment status (Student 
Status Confirmation Reporting (SSCR)); (4) preparing financial aid 
transcripts (FAT); (5) assisting guaranty agencies in helping lenders 
collect delinquent loans (pre-claims assistance (PCA)/supplemental PCA 
support); (6) providing audit and program review planning; (7) 
supporting research studies and policy development; (8) conducting 
budget analysis and development; (9) tracking loan transfers; (10) 
assessing FFEL Program administration of guaranty agencies, schools, 
and lenders; (11) tracking borrowers; (12) providing information that 
will support Credit Reform Act of 1992 requirements; (13) providing 
information to track refunds/cancellations; and (14) collecting debts 
owed to the Department under Title IV of HEA.
    The Department of Education (ED) may disclose information contained 
in a record in this system of records without the consent of the 
individual if the disclosure is compatible with the purpose for which 
the record was collected under the following routine uses:
    (a) Program purposes. (1) Records may be disclosed for the 
following program purposes to the persons listed in (a)(2): To verify 
the identity of the applicant and assist with the determination of 
program eligibility and benefits, provide additional borrower profile 
information, to support research and analysis of student financial 
assistance program issues, provide lender, school, and guaranty agency 
profile information, provide default rate calculations, support audit 
and program review planning, support budget analysis and development, 
support loan transfer tracking, support assessment of the FFEL Program 
administration of guaranty agencies, schools, and lenders, support 
borrower tracking, provide a standardized student status confirmation 
report, provide financial aid transcript information, provide pre-
claims assistance/supplemental pre-claims assistance notification, and 
support for credit reform act (CRA) requirements (requirements for 
support of the CRA currently includes providing, to the Office of 
Management and Budget, data on lender interest benefits and special 
allowance payments, defaulted loan balances, and supplemental preclaims 
assistance payments information).
    (2) The information may be furnished to Federal, State, or Local 
agencies, to guaranty agencies, to educational and financial 
institutions, to agency contractors, to the Internal Revenue Service, 
to the General Accounting Office, and to the Office of Management and 
Budget.
    (b) Litigation disclosure.
    (1) Disclosure to the Department of Justice. If ED determines that 
disclosure of certain records to the Department of Justice or attorneys 
engaged by the Department of Justice is relevant and necessary to 
litigation and is compatible with the purpose for which the records 
were collected, ED may disclose those records as a routine use to the 
Department of Justice. Such disclosure may be made in the event that 
one of the parties listed below is involved in the litigation, or has 
an interest in litigation:
    (i) ED, or any component of the Department; or
    (ii) Any ED employee in his or her official capacity; or
    (iii) Any employee of ED in his or her individual capacity where 
the Department of Justice has agreed to provide or arrange for 
representation for the employee; or
    (iv) Any employee of ED in his or her individual capacity where the 
agency has agreed to represent the employee; or
    (v) The United States where ED determines that the litigation is 
likely to affect the Department or any of its components.
    (2) Other disclosures. If ED determines that disclosure of certain 
records to a court, adjudicative body before which ED is authorized to 
appear, individual, or entity designated by ED or otherwise empowered 
to resolve disputes, counsel or other representative, or potential 
witness is relevant and necessary to litigation and is compatible with 
the purpose for which the records were collected, ED may disclose those 
records as a routine use notice to the court, adjudicative body, 
individual or entity, counsel or other representative, or witness. Such 
a disclosure may be made in the event that one of the parties listed 
below is involved in the litigation, or has an interest in the 
litigation:
    (i) ED or any component of the Department; or
    (ii) Any ED employee in his or her official capacity; or
    (iii) Any employee of ED in his or her individual capacity where 
the Department has agreed to represent the employee; or
    (iv) The United States, where ED determines that litigation is 
likely to affect the Department or any of its components.
    (c) Enforcement disclosure. In the event that information in this 
system of records indicates, either on its face or in connection with 
other information, a violation or potential violation of any applicable 
statute, regulation, or order of a competent authority, the relevant 
records in the system of records may be referred, as a routine use, to 
the appropriate agency, whether foreign, Federal, State, or local, 
charged with the responsibility of investigating or prosecuting such 
violation or charged with enforcing or implementing the statute, or 
executive order or rule, regulation, or order issued pursuant thereto 
if the information is relevant to any enforcement, regulatory, 
investigative, or prosecutive responsibility of the receiving entity.
    (d) Contract disclosure. When ED contemplates that it will contract 
with a private firm for the purpose of collating, analyzing, 
aggregating, or otherwise refining records or performing any other 
function with respect to the records in this system, relevant records 
will be disclosed to such a contractor. The contractor shall be 
required to maintain Privacy Act Safeguards with respect to such 
records.
    (e) Employee grievance, complaint or conduct disclosure. If a 
record maintained in this system of records is relevant to an employee 
grievance or complaint or employee discipline or competence 
determination proceedings of another party of the Federal Government, 
ED may disclose the record as a routine use in the course of the 
proceedings.
    (f) Labor organization disclosure. Where a contract between a 
component of ED and a labor organization recognized under Chapter 71, 
U.S.C. Title V provides that the Department will disclose personal 
records relevant to the organization's mission, records in this system 
of records may be disclosed as a routine use to such an organization.
    (g) Research disclosure. When the appropriate official of ED 
determines that an individual or organization is qualified to carry out 
specific research, that official may disclose information from this 
system of records to that researcher solely for the purpose of carrying 
out research. The researcher shall be required to maintain Privacy Act 
safeguards with respect to such records.
    (h) Computer matching disclosure. Any information from this system 
of records, including personal information obtained from other agencies 
through computer matching programs, may be disclosed to any third party 
through a computer matching program in connection with an individual's 
application for, or participation in, any grant or loan program 
administered by ED. The purposes of these disclosures may be to 
determine program eligibility and benefits, enforce the condition and 
terms of a loan or grant, permit the servicing and collecting of the 
loan or grant, prosecute or enforce debarment, suspension, and 
exclusionary actions, counsel the individual in repayment efforts, 
investigate possible fraud and verify compliance with program 
regulations, locate a delinquent or defaulted debtor, and initiate 
legal action against an individual involved in program fraud or abuse.
    (i) FOIA advice disclosure. In the event that ED deems it desirable 
or necessary in determining whether particular records are required to 
be disclosed under the Freedom of Information Act, disclosure may be 
made to the Department of Justice or the Office of Management and 
Budget for the purpose of obtaining their advice.
    (j) Subpoena disclosure. Where Federal agencies having the power to 
subpoena other Federal agencies' records, such as Internal Revenue 
Service or Civil Rights Commission, issue a subpoena to ED for records 
in this system of records, the Department may make such records 
available provided the disclosure is consistent with the purposes for 
which the records were collected.
    (k) Disclosure to the Department of Justice. ED may disclose 
information from this system of records as a routine use to the 
Department of Justice to the extent necessary for obtaining its advice 
on any matter relevant to an audit, inspection, or other inquiry 
related to the Department's responsibilities under Title IV of the 
Higher Education Act of 1965.
    (l) Congressional Member disclosure. ED may disclose information 
from this system of records to a congressional office from the record 
of an individual in response to an inquiry from the congressional 
office made at the written request of that individual; the Member's 
right to the information is no greater than the right of the individual 
who requested it.
    Disclosure pursuant to 5 U.S.C. 552a(b)(12): The Department may 
disclose to a consumer reporting agency information regarding a claim 
which is determined to be valid and overdue as follows: (1) The name, 
taxpayer identification number and other information necessary to 
establish the identity of the individual responsible for the claim; (2) 
the amount, status, and history of the claim; and (3) the program under 
which the claim arose. The Department may disclose the information 
specified in this paragraph under 5 U.S.C. 552a(b)(12) and the 
procedures contained in subsection 31 U.S.C. 3711 (f). A consumer 
reporting agency to which these disclosures may be made is defined at 
31 U.S.C., 15 U.S.C. 1681a(f), and 3701 (a)(3).
    The records are maintained on magnetic tape and computer disk 
media.
    Data is retrieved by matching social security number, name and date 
of birth.
    All physical access to the sites of the contractor where this 
system of records is maintained, is controlled and monitored by 
security personnel who check each individual entering the building for 
his or her employee or visitor badge. The computer system employed by 
the Department of Education offers a high degree of resistance to 
tampering and circumvention. This security systems limits data access 
to Department of Education and contract staff on a ``need to know'' 
basis, including external users of the system (guaranty agency and 
school personnel) and controls individual users' ability to access and 
alter records within the system. All users of this system are given a 
unique user ID with a personal identifier. All interactions by 
individual users with the system are recorded.
    Records of individual loans will be archived twelve months after a 
loan is closed. The loan will be archived to optical disk for 
economical and efficient storage. The Department will retain and 
dispose of NSLDS records in accordance with the ED Comprehensive 
Records Disposition Schedule, Part 10 item 16 (a)(b)(c)(d)(e).
    Director, Division of Program Operations, Room 4640, GSA Building, 
7th and D Streets, SW., Washington, DC 20202.
    If an individual wishes to determine whether a record exists 
regarding him or her in this system of records, the individual should 
provide the system manager his or her name, date of birth, social 
security number, and the name of the school or lender from which the 
loan or grant was obtained. Requests for notification about an 
individual must meet the requirements of the Department of Education's 
Privacy Act regulations at 34 CFR 5b.5.
    If an individual wishes to gain access to a record in this system, 
he or she should contact the system manager and provide information as 
described in the notification procedure.
    If an individual wishes to change the content of a record in the 
system of records, he or she should contact the system manager with the 
information described in the notification procedure, identify the 
specific item(s) to be changed, and provide a written justification for 
the change. Requests to amend a record must meet the requirements of 
the Department of Education Privacy Act regulations at 34 CFR 5b.7.
    Information is obtained from guaranty agencies, schools, and the 
Title IV Program File (Privacy Act System of Records Number 18-4000-
24). However, lenders and guarantee agencies are not a source of 
information for participants in the Federal Direct Students Loan 
Program since the Department maintains individual records of borrowers.
    None.

[FR Doc. 94-15687 Filed 6-28-94; 8:45 am]
BILLING CODE 4000-01-P