On September 25, 2017, the Official Cohort Default Rates were released for the 2014 Fiscal Year. For the first time in several years, the national default rate has risen to more than 11.5%. According to Federal Student Aid’s National Default Briefing the 2014 Cohort Default Rate is over 18% at Public Colleges with programs less than 4 years, followed by For-profits schools at 15.5%. Public and Private Nonprofit institutions still have the lowest Cohort Default Rates, roughly 7.5%.

The official Three-Year rates were sent to all schools via their Student Aid Internet Gateway (SAIG) mailbox. Federal Student Aid’s Operations Performance Management Services calculates the rates which measure the ratio of students who enter repayment during a cohort year and who later default on those loans. Since the data isn’t always right, schools have the ability to challenge and appeal their Cohort Default Rate calculation to have their rates adjusted.

The Fiscal Year 2014 Three-Year Cohort Default Rate is calculated by dividing the number of borrowers who entered repayment in 2014 by the number of borrowers who entered repayment in 2014 and defaulted in 2014, 2015 or 2016. A school with a high default rate will face sanctions and may lose its eligibility to participate in Federal Student Aid Programs or expand their scope of participation with ED.  Schools with Three-year CDRs of 30% or greater for three consecutive years or with CDRs greater than 40% for one year are subject to federal sanctions.

Nearly fifty institutions with at least one year of cohort default rates over 30% will be required to submit a formal default management plan to ED. High cohort default rates are also a trigger for program reviews and can lead to heightened cash monitoring.  According to the National Association of Financial Aid Administrators, “This year, ten institutions may lose Title IV eligibility for high default rates”.

Higher Ed Executives Cohort Default Rate
This year ten schools will lose access to Title IV Federal Student Aid Funding due to having high Cohort Default Rates of over 40 percent.