As of May 5, 2025, the Department of Education resumed automated NSLDS post-screening updates via ISIR transactions, as outlined in Electronic Announcement APP-25-14. This development has significant implications for institutions participating in Title IV programs.
What to Expect
• ISIR Updates via FPS: Institutions will receive updated 2024-2025 and 2025-2026 ISIRs containing up to three post-screening reason codes, indicating changes in a student’s Title IV eligibility.
• Triggers for Post-Screening: ISIRs are generated when NSLDS data reflects changes such as:
- Student entering default
- Exceeding aggregate loan limits or Pell Lifetime Eligibility Used (LEU)
- Reported or resolved overpayments
- Loan status changes (e.g., bankruptcy, discharge)
• Initial Volume Surge: Institutions should anticipate a higher volume of ISIRs initially, due to the processing backlog from earlier FAFSA cycles.
Planning for Compliance
1. Monitor ISIRs Diligently: Implement processes to review each new ISIR, with particular attention to post-screening reason codes, ensuring accurate assessment of student eligibility.
2. Update Internal Systems: Verify that your financial aid management systems correctly import and flag ISIR fields, especially those related to post-screening.
3. Staff Training: Ensure financial aid personnel are well-versed in identifying and responding to post-screening updates, maintaining compliance with Title IV regulations.
Addressing Disbursed Aid and Post-Screening Changes
If a post-screening ISIR is received after aid has been disbursed, institutions must assess the timing and nature of the eligibility change:
• Ineligibility at Time of Disbursement:
- Reassess the student’s eligibility based on the updated NSLDS data.
- Return any improperly disbursed funds to the Department of Education.
- Update records in COD and NSLDS to reflect the changes.
• Ineligibility Occurring After Disbursement:
- The original disbursement may remain valid.
- Suspend any future disbursements until the eligibility issue is resolved.
Compliance with Transcript Withholding Regulations
Institutions were reminded in Electronic Announcement APP-25-02 of a new regulation effective July 1, 2024 under 34 CFR §668.14(b)(33). Institutions are prohibited from withholding official transcripts or taking other adverse actions against a student solely due to a balance owed resulting from the institution’s error in administering Title IV funds. This regulation applies to situations where Title IV funds were refunded as a result of adjustments due from post-screening.
Next Steps
Navigating the resumption of NSLDS post-screening requires diligent monitoring and prompt action to maintain compliance. If your institution needs assistance in adapting processes or training staff to effectively manage these updates, McClintock & Associates is here to help.
Schedule a consultation today or reach out to our team to get started.
