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.

2014 OFFICIAL COLLEGE COHORT DEFAULT RATES COMING SEPTEMBER 25

Does your school have a Default Management Plan

For those involved with your school’s Default Management efforts, ED will release FY 2014 Official Cohort Default Rates (CDR) to all eligible institutions on September 25, 2017. All schools will receive their CDR electronically via their SAIG mailbox.

As I’ve mentioned in the past, 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 2014 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.

2015-2016 PERKINS DEFAULTS

The Orange Book is a report that lists each school that participated in the Federal Perkins Loan (Perkins Loan) Program during the 2015-2016 Award Year and provides a cohort default rate for each school. This report is based on data submitted by schools in the Fiscal Operations Report for 2015-2016 and Application to Participate for 2017-2018 (FISAP).

292,351borrowers entered repayment in 2014-2015 and 33,633 of those borrowers defaulted. The U.S. Aggregate Total Cohort Default Rate for the 2015-2016 year is 11.5% and represents over $1 Billion in total principal outstanding on loans in default.

COHORT DEFAULT RATES RELEASED

FY 2013 Official 3-Year Cohort Default Rates Distributed September 26, 2016

On September 26, 2016, Fiscal Year 2013 3-Year Official Cohort Default Rates were released to all schools via their Student Aid Internet Gateway (SAIG) mailbox. Any school that did not have a borrower in repayment, during the current cohort default rate period will not receive an Official Cohort Default Rate notification package. These schools are considered to have no cohort default rate data and no default rate. Any school not enrolled in the eCDR process may download their cohort default rate and accompanying documentation from the National Student Loan Data System (NSLDS) via the NSLDS Professional Access Web site.

The Fiscal Year 2013 3-Year CDR is calculated by dividing the number of borrowers who entered repayment in 2013 by the number of borrowers who entered repayment in 2013 and defaulted in 2013, 2014 or 2015. A school with a high default rate may lose its eligibility to participate in Federal Student Aid Programs. Generally, 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 such as loss of participation.

After the release of the 2013 3-Year Official rates on September 26th, the 2013 Official Cohort Default Rates were posted publicly to the Default Management Web site and the FSA Data Center on Wednesday, September 28, 2016.

Appeals

The time period for appealing the FY 2013 3-Year Official Cohort Default Rates begins on Tuesday, October 4, 2016 for all schools. http://bit.ly/2cVphJD

FISCAL YEAR 2013 OFFICIAL COHORT DEFAULT RATES EXPECTED LATE SEPTEMBER

If you are responsible for you schools’ Default Management efforts, ED will release FY 2013 Official Cohort Default Rates (CDR) to all eligible institutions on Monday September 26, 2016.

As I’ve mentioned in the past, 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 2013 CDR package from FSA’s Operations Performance Division in the forthcoming days. In the meantime, you can peep the Default Management Web site which contains resources for Financial Aid Professionals, Data Managers and Students here: http://ifap.ed.gov/DefaultManagement/DefaultManagement.html