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Direct Loan Consolidation Processing FAQs

July 14, 2014

Recently, Federal Student Aid (FSA) implemented the new Direct Loan Consolidation Process. To assist you, we have compiled answers to the most frequently asked questions Nelnet receives from our school partners on the topic.

The main difference between the new program and the old is that schools or their designated Perkins servicers (loan holders) now receive communications and process transactions with four Title IV Additional Servicers (TIVAS) – FedLoan Servicing, Great Lakes, Nelnet, and Navient (Sallie Mae) – instead of one. As you know, borrowers choose their consolidation servicer when they complete their application.

Schools or their Perkins servicers are involved in consolidation transactions only if a borrower chooses to include Perkins loans in their new consolidated loan. If that is the case, loan holders will:

  • Receive a request from the consolidation servicer to complete a Loan Verification Certificate (LVC) and submit it within 10 business days.
  • Receive Perkins loan payoff and report the underlying loan to NSLDS as paid in full through consolidation.
  • Work with the designated consolidation servicer to resolve any over or under adjustments that may exist.

Early this year, the four TIVAS gathered set-up forms from schools across the country with Perkins loan portfolios. The set-up forms indicated each school’s preferred method in sending and receiving Loan Verification Certificate (LVC) and payoff manifest. Although each school’s information was gathered by one of the TIVAS, it was shared with all. TIVAS then used the information to set up school’s processes according to their preferences.

Q. How does Nelnet notify Loan Holders that an LVC file is ready for school certification?

A. An LVC is sent to schools or their third party Perkins servicers for completion, depending on their set-up preferences. As stated above, loan holders indicated their preferences on the set up form they completed and sent to TIVAS early this year. Options included encrypted email exchange, direct access to the servicer’s website (this is called “Data Trade” on Nelnet’s system), or Secure File Transfer Protocol (SFTP). Paper LVCs are also an option at this time, but are not recommended.

Q. Is there a central source to get information about LVCs in need of completion?

A. There is no central source of information. Loan holders are informed of LVCs in need of completion by individual notification about each consolidation loan, or by the methods detailed above.

Q. What is the timeframe for LVC completion?

A. Each LVC should be completed within ten business days of receiving the request from the consolidation servicer.

Q. Where can I get directions on how to open encrypted LVC-related emails from Nelnet?

A. The first time Loan Holders receive an encrypted message for Nelnet, they will need to go through a brief registration and password selection process. The instructions are included in the email and can be accessed here, on our website. After the initial set-up, loan holders will be able to open encrypted email by entering the ID and Password they established in the registration process.

Q. I have Nsight Plus access already. Can I link to the LVCs and other consolidation transactions once I log in?

A. To complete consolidation transactions, separate Nsight Plus access is needed. Nelnet initiated that access for those who were indicated as LVC certifiers on the set-up form. If you do not have access to consolidation transactions, please call or email Nelnet at 855.554.0050 or

Q. I would prefer that my school’s Perkins payoff be handled by ACH. Who do I contact to arrange this?

A. All schools were initially set up for checks. To make a change, contact Federal Student Aid’s Accounting Division (202.377.3322 or 202.377.3745; Please do not contact the consolidation servicer; they do not handle this part of the process. Funding will be sent to only one location specified by school.

In order to comply with the Debt Collection Improvement Act of 1996, FSA is asking schools to switch to ACH by September 30, 2014. A Payoff Manifest is required to reconcile payment. Please note: schools are still responsible for handling under and over payment information, even if they work with a third party Perkins loan servicer.

Q. What does Nelnet do if they are selected by the borrower as the consolidation servicer but do not yet have a school set up form on file?

A. Nelnet will mail a paper LVC to the school if we are selected as a borrower’s consolidation servicer and the school does not yet have a set up form on file. Schools are still required to submit an LVC within ten days if they receive a paper request. Nelnet will email manifests to the contact provided from FSA if a set up form isn’t received.

Q. Who do I call at Nelnet if I have Direct Consolidation Loan questions?

A. If you have questions about the consolidation process, including loan holder procedures, additional Nsight Plus access, or other transaction questions, you can reach Nelnet’s Consolidation team at 855.554.0050 or Be sure to continue to contact the School Service Center (866.463.5638, if you have questions unrelated to consolidation.


Anne Del Plato, Eastern Reginal Director, Nelnet Partner Solutions

Anne Del Plato, Eastern Reginal Director, Nelnet Partner Solutions


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