On September 28, 2020, the Official Cohort Default Rates were released for the 2017 Fiscal Year. 

Since 2013, the National Student Loan Cohort Default Rate has been trending down, despite a small uptick last year. The official 2017 rate is now 9.7%, down 4% from the Official FY 2016 rate of 10.1%

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 14.7% for the 2017 CDR. Public institutions fared much better at 9.3%, followed by private institutions with just 6.7% of students defaulting on their loans. 

The Fiscal Year 2017 Three-Year CDR is calculated by dividing the number of borrowers who entered repayment in 2017 by the number of borrowers who entered repayment in 2017 and defaulted in 2017, 2018 or 2019. 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 6, 2020 through the eCDR appeals website.