FY 2016 OFFICIAL COHORT DEFAULT RATES RELEASED

On September 23, 2019, the Official Cohort Default Rates were released for the 2016 Fiscal Year.

The national default rate has fallen since last year after it rose to more than 11.5%. Since 2013, the National Student Loan Cohort Default Rate is trending down again. The official 2016 rate is now 10.1%, down 6.5% from the Official FY 2015 rate of 10.8%

According to Federal Student Aid’s National Default Briefing, the highest Defaults are still coming from the proprietary school sector which has an average of 15.2% for the 2016 CDR. Public institutions fared much better at 9.6%, followed by private institutions with just 6.6% of students defaulting on their loans.

The Fiscal Year 2016 Three-Year CDR is calculated by dividing the number of borrowers who entered repayment in 2016 by the number of borrowers who entered repayment in 2016 and defaulted in 2016, 2017 or 2018. 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.

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 can challenge and appeal their CDR calculation to have their rates adjusted. Schools may begin submitting challenges and appeals on Tuesday, October 1, 2019 through the eCDR appeals website.

FISCAL YEAR 2016 OFFICIAL COHORT DEFAULT RATES COMING SOON

ED will release FY 2016 Official Cohort Default Rates (CDR) to all eligible institutions in mid-September. Schools will receive their CDR electronically via their SAIG mailbox.
The Cohort Rates are an important metric used to determine school or program quality. Schools with 3-year CDRs of 30% or greater for three consecutive years or with CDRs greater than 40% for one year may face federal sanctions. Institutions may challenge, appeal, or have their rate adjusted in certain circumstances. Be on the lookout for more information such as an Electronic Announcement announcing the official release dates of the 2016 CDR package from FSA’s Operations Performance Division in the forthcoming days. In the meantime, check out the Default Management Web site which contains resources for Financial Aid Professionals, Data Managers and Students here.

COHORT DEFAULT RATES RELEASED

On September 24, 2018, the Official Cohort Default Rates were released for the 2015 Fiscal Year.

The national default rate has fallen since last year after it rose to more than 11.5%. Since 2013, the National Student Loan Cohort Default Rate has been trending down, despite a small uptick last year. The official 2015 rate is now 10.8%.

According to Federal Student Aid’s National Default Briefing, the highest Defaults are still coming from the proprietary school sector which has an average of 15.6% for the 2015 CDR. Public institutions fared much better at 10.3%, followed by private institutions with just 7.1% of students defaulting on their loans. There are some interesting outliers in this year’s CDR which signify borrowers are struggling in each sector.

Although the privates had the lowest overall default rate, borrowers from schools identified as 2-3 year schools, defaulted at a rate of 16.7%. At private colleges identified as less than 2 years, that rate jumps to 22%, beating the defaults in every other category. Even among public institutions, students who had attended institutions identified as 2-3 year schools the same 16.7% of borrowers defaulted on their loans. Out of the 6155 schools included in the national cohort default rate, nearly 27.5% of schools were identified as 2-3 year institutions and those institutions account for nearly 23% of all defaults.

Borrowers from institutions identified as 4-year institutions had the lowest rates of default in each sector.

The Fiscal Year 2015 Three-Year CDR is calculated by dividing the number of borrowers who entered repayment in 2015 by the number of borrowers who entered repayment in 2015 and defaulted in 2015, 2016 or 2017. 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 sixty 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.

This year seven institutions will lose Title IV program eligibility because their 2015 Cohort Default Rate is over 40%. Five institutions will also lose eligibility to participate in the federal student aid programs due to having three years of official 3-year Cohort Default Rates that are 30% or greater.

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 can challenge and appeal their CDR calculation to have their rates adjusted. Schools may begin submitting challenges and appeals on Tuesday, October 2, 2018 through the eCDR appeals website.

FISCAL YEAR 2015 OFFICIAL COHORT DEFAULT RATES COMING SEPTEMBER

ED will release Fiscal Year (FY) 2015 Official Cohort Default Rates (CDR) to all eligible institutions in September. Schools will receive their CDR electronically via their SAIG mailbox, sometime on or after September 25. The Cohort Rates are an important metric used to determine school or program quality.

This year’s Cohort includes three years; FY 2015, 2014 and 2013.

Schools with low cohort default rates can receive their funds more timely than schools with rates above certain thresholds. Schools with a 3-year cohort default rate less than 15% enjoy the benefit of the ability to deliver disbursements to first-year, first-time undergraduate borrowers without delay. Schools with rates greater than 15% must delay the delivery of loans for 30 days.

Schools with 3-year CDRs of 30% or greater for three consecutive years, or with CDRs greater than 40% for just one year may face federal sanctions including loss of Direct Loan or Pell Grant Program eligibility. Institutions may challenge, appeal, or have their rate adjusted in certain circumstances.

Be on the lookout for more information such as an Electronic Announcement announcing the official release dates of the 2015 CDR package from FSA’s Operations Performance Division in the forthcoming days. In the meantime, check out the Default Management Web site which contains resources for Financial Aid Professionals, Data Managers and Students.

DRAFT COHORT DEFAULT RATE CHALLENGE APPEAL DEADLINE APRIL 19, 2018

In a message to the Financial Aid Community posted by Federal Student Aid yesterday, FSA reminded schools the Fiscal Year 2015 Draft Cohort Default Rate Challenge Appeal Deadline is April 19, 2018.

On February 26, 2018, the Department of Education (the Department) distributed the FY 2015 Draft Electronic Cohort Default Rate (eCDR) notification packages to all Title IV eligible schools.

As a reminder, the 45-day timeline for schools to challenge their FY 2015 Draft Cohort Default Rate (CDR) data began on March 6, 2018 and will end on April 19, 2018. During this period, schools have the option to submit an incorrect data challenge, an uncorrected data adjustment (UDA), a loan servicing appeal (LSA), or a new data adjustment (NDA).

If you have any questions or concerns regarding CDR challenges and procedures, please contact us at FSA.Schools.Default.Management@ed.gov or by phone at 202-377-4259.

 

Thank you for your continued cooperation.