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.

FY 2015 3-YEAR DRAFT COHORT DEFAULT RATES RELEASED

On February 26, 2018, the Department of Education distributed the FY 2015 3-Year Draft Cohort Default Rate (CDR) notification packages to schools via their Student Aid Internet Gateway (SAIG) mailbox. The package includes a cover letter and Loan Record Detail Report (LRDR). It’s important for schools to review their draft data because there are sanctions for schools with high cohort default rates and benefits for schools with low ones and the draft cycle is one of the only opportunities to challenge certain data.

The Fiscal Year 2015 3-Year Draft 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.

Although there are no sanctions or benefits associated with the draft rates themselves, the draft rates become official in September. During the draft cycle, schools have an opportunity to challenge incorrect data or challenge their (low) participation rate. The challenge and appeals cycle begins on March 6, 2018 and lasts for 45 days. More information about submitting an Incorrect Data Challenge or a Participation Rate Index Challenge can be found in the Cohort Default Rate Guide

DRAFT FY 2014 3-YEAR COHORT DEFAULT RATES RELEASED

On February 27, 2017, the Department of Education distributed the FY 2014 3-Year Draft Cohort Default Rate (CDR) notification packages to schools via their Student Aid Internet Gateway (SAIG) mailbox. The package includes a cover letter and Loan Record Detail Report (LRDR). It’s important for schools to review their draft data because there are sanctions for schools with high cohort default rates and benefits for schools with low ones and the draft cycle is one of the only opportunities to challenge certain data.
The Fiscal Year 2014 3-Year Draft CDR 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.

Although there are no sanctions or benefits associated with the draft rates themselves, the draft rates become official in September. During the draft cycle, schools have an opportunity to challenge incorrect data or challenge their (low) participation rate. Such challenges, if successful, will be reflected in the school’s official rate. The challenge and appeals cycle begins on March 7, 2017 and lasts for 45 days. More information about submitting an Incorrect Data Challenge or a Participation Rate Index Challenge can be found in the Cohort Default Rate Guide here: http://bit.ly/2lWBRLo

Benefits for schools with low cohort default rates

A school whose most recent official cohort default rate is less than 5.0 percent and is an eligible home institution that is originating loans to cover the cost of attendance in a study abroad program may disburse loan proceeds in a single installment to a student studying abroad regardless of the length of the student’s loan period, and may choose not to delay the disbursement of the first installment of loan proceeds for first year first-time borrowers studying abroad.

A school with a cohort default rate of less than 15.0 percent for each of the three most recent fiscal years for which data are available, including eligible home institutions and foreign institutions, may disburse, in a single installment, loans that are made for one semester, one trimester, one quarter, or a four-month period and may choose not to delay the first disbursement of a loan for 30 days for first time, first-year undergraduate borrowers.

Sanctions for schools with high cohort default rates

If a school‘s three most recent official cohort default rates are 30.0 percent or greater for the three year calculation it will lose Direct Loan and Pell Grant program eligibility for the remainder of the fiscal year in which the school is notified of its sanction and for the following two fiscal years.

If a school‘s current official cohort default rate is greater than 40.0 percent, for the three year CDR calculation, it will lose Direct Loan and Pell Grant program eligibility for the remainder of the fiscal year in which the school is notified of its sanction and for the following two fiscal years.

FY 2014 DRAFT COHORT DEFAULT RATES

In the coming weeks, the U.S. Department of Education is due to release draft Cohort Default Rates the Fiscal Year 2014 cohort of borrowers. At publishing time, Ed has not yet provided an exact release date for the Draft 2014-CDR. Schools have 45 days from receipt of the report to submit challenges and appeals. Although there are no sanctions associated with the draft rates, schools should review the data used to calculate the rate for accuracy, because this data forms the basis of a school’s official cohort default rate. A school that fails to challenge the accuracy of its draft cohort default rate data through an Incorrect Data Challenge may not contest the accuracy of the same cohort data when it receives its official cohort default rate when it comes out later this year in September.

What are the sanctions?

  • When a school’s three most recent official cohort default rates are 30.0 percent or greater for the three year calculation:
  • A school will lose Direct Loan and Federal Pell Grant Program eligibility for the remainder of the fiscal year in which the school is notified of its sanction and for the following two fiscal years.
  • When a schools current official cohort default rate is greater than 40.0 percent, for the three year CDR calculation:
  • A school will lose direct Loan Program eligibility fort the remainder of the fiscal ear in which the school is notified of its sanction and for the following two years.