Department of Ed’s New Student ID System Means No More Use of STAN
March 11, 2015
Prepared by: Harrison Wadsworth (hwadsworth@wpllc.net)
The Department of Education’s Office of Federal Student Aid on October 1, 2014, announced that it is converting to a new student ID system. Here is what that announcement says: “We are pleased to announce that in spring 2015 we will implement a new login process for our student and borrower-based websites, including FAFSA on the Web, NSLDS® Student Access, StudentLoans.gov, StudentAid.gov, and the TEACH Grant website. The new FSA ID, which will be comprised of a user-selected username and password, will replace the Federal Student Aid PIN as the process by which students, parents, and borrowers authenticate their identity to access their federal student aid information. We are excited about the new functionality that the FSA ID will offer, including a single sign-on process for most of our systems.”
At the time of the original announcement, it was not made clear that the current STAN authentication process will no longer be available to schools that use this system to authenticate e-signatures for their Perkins loan borrowers. Apparently, the Department (FSA) contacted only a handful of schools to determine the impact of eliminating the ability to use STAN to authenticate signatures for Perkins Loans, a sample that turned out to be much too small. COHEAO has asked the Department to allow more time before STAN is deactivated, but due to a hard-cutover to the new system, that does not seem likely.
Through outreach by COHEAO, FSA now understands that elimination of STAN at the end of April creates a serious problem for many schools and loan servicers, and officials are now exploring options to allow Perkins authentication through the new student ID system. However, this will be a time-consuming process for ED, and schools will have to all sign up for it and modify their participation agreement to provide the authority to the servicers to utilize the service on the schools’ behalf. The Department’s hope would be to provide access to the new system by September. However, COHEAO has pointed out that students will begin signing master promissory notes starting in late spring and has requested that FSA develop a work-around for servicers until the new system is ready.
Perkins loan servicers have been exploring alternative authentication systems that will operate without STAN, but there is concern by at least some of the servicers that the alternative options, such as using the major credit bureaus or state motor vehicles department systems will miss as many as 25 percent of borrowers who are not in either system. For those borrowers, it would mean going back to a paper process. There is also concern over there being enough time to make the conversion before April 30, the time ED has said it intends to launch the new system. ED intends to terminate the use of STAN for authentication at the same time the new Student ID process goes live.
COHEAO will continue to work with the Department on this important issue and will keep members informed via the Torch. If you have any comments or questions, please notify Maria Livolsi at mlivolsi@albany.edu.
