Your Cohort Default Rate:
What Does It Mean?
2017 SASFAA Annual Conference
Biloxi, MS
February 12–15, 2017
© 2010–2017 by National Association of Student Financial Aid Administrators (NASFAA). All rights reserved.
NASFAA has prepared this document for use only by personnel, licensees, and members. The information contained herein is protected by copyright.
No part of this document may be reproduced, translated, or transmitted in any form or by any means, electronically or mechanically, without prior written
permission from NASFAA.
NASFAA SHALL NOT BE LIABLE FOR TECHNICAL OR EDITORIAL ERRORS OR OMISSIONS CONTAINED HEREIN; NOR FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE OF THIS MATERIAL.
This publication contains material related to the federal student aid programs under Title IV of the Higher Education Act and/or Title VII or Title VIII of the
Public Health Service Act. While we believe that the information contained herein is accurate and factual, this publication has not been reviewed or
approved by the U.S. Department of Education, the Department of Health and Human Services, or the Department of the Interior.
The Free Application for Federal Student Aid (FAFSA®) is a registered trademark of the U.S. Department of Education.
NASFAA reserves the right to revise this document and/or change product features or specifications without advance notice.
February 2017
2017 SASFAA Annual Conference
Your Cohort Default Rate:
What Does It Mean?
Table of Contents
Slides ....................................................................................................................................................................1
Overview of Cohort Default Rate ........................................................................................................................23
Cohort Default Rate Timeline: Challenges, Adjustments, and Appeals .............................................................. 27
Cohort Default Rate: Challenges, Adjustments, and Appeals ............................................................................ 31
References for Cohort Default Rate Issues ........................................................................................................ 33
© 2017 NASFAA
i
Your Cohort Default Rate: What Does It Mean?
This page intentionally left blank.
Your Cohort Default Rate: What Does It Mean?
ii
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Slide 1 © 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Amanda Sharp
Online Instruction Manager
NASFAA
© 2017 NASFAA
SASFAA Annual Conference
February 2017
Biloxi, Mississippi
Overview of
Cohort Default Rates
Slide 3 © 2017 NASFAA
© 2017 NASFAA
1
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Goals
• Overview of cohort default rates
• Impact on institutions
• What do do next
Slide 4 © 2017 NASFAA
What is a Cohort Default Rate (CDR)?
• The CDR is a percentage that represents:
– Cohort of borrowers who enter repayment
– Members of that cohort who defaulted
Slide 5 © 2017 NASFAA
What is a Cohort Default Rate (CDR)?
• The CDR is a percentage that represents:
– Cohort of borrowers who enter repayment
– Members of that cohort who defaulted
• Calculation performed each federal fiscal
year
October
1
September
30
Slide 6 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
2
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Cohort Default Rate Calculations
Non-Average Rate
Numerator
Borrowers included in the
denominator who have
defaulted during cohort
period
Denominator
Borrowers who entered
repayment in cohort fiscal
year
Cohort
Default
Rate
%
Slide 7 © 2017 NASFAA
Borrowers in the cohort
Borrowers
who defaulted
who defaulted
in
inFY14,
FY13,FY15,
FY14,or
orFY16
FY15
10/1/2012–9/30/2015
10/1/2013–9/30/2016
Borrowers who entered
repayment FY14
10/1/2013–9/30/2014
Slide 8 © 2017 NASFAA
Borrowers in the cohort
Borrowers
who defaulted
who defaulted
in
inFY14,
FY13,FY15,
FY14,or
orFY16
FY15
8
90
10/1/2012–9/30/2015
10/1/2013–9/30/2016
Borrowers who entered
repayment FY14
10/1/2013–9/30/2014
Slide 9 © 2017 NASFAA
© 2017 NASFAA
3
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Borrowers in the cohort
who defaulted in
FY14, FY15, or FY16
8
10/1/2013–9/30/2016
8.8%
90
Borrowers who entered
repayment FY14
10/1/2013–9/30/2014
Slide 10 © 2017 NASFAA
Cohort Default Rate Calculations
Average Rate
Numerator
Borrowers included in the
denominator who have
defaulted during cohort
period
Cohort
Default
Rate
Denominator
Borrowers who entered
repayment in cohort fiscal
year and the two
preceding fiscal years
%
Slide 11 © 2017 NASFAA
Cohort Default Rates
FEBRUARY
Draft Rates
Issued
Each Fiscal Year
Slide 12 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
4
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Cohort Default Rates
FEBRUARY
Draft Rates
Issued
February
Each Fiscal Year
SEPTEMBER
Official Rates
Issued
by September 30
Each Fiscal Year
Slide 13 © 2017 NASFAA
Importance of Cohort Default Rates
• Defaulted loans are costly
• Impact of defaults on the borrower
• Impact of defaults on the school
Slide 14 © 2017 NASFAA
Importance of Cohort Default Rates
• Defaulted loans are costly
• Impact of defaults on the borrower
• Impact of defaults on the school
Slide 15 © 2017 NASFAA
© 2017 NASFAA
5
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Benefits of a Low Cohort Default Rate
<15% each of three most recent
fiscal years
Slide 16 © 2017 NASFAA
Benefits of a Low Cohort Default Rate
<15% each of three most recent
fiscal years
• Single-term loans may be disbursed in one
disbursement
• Exempt from 30-day delay for first-time, first-year
undergraduate borrowers
Slide 17 © 2017 NASFAA
Benefits of a Low Cohort Default Rate
<5% single most recent fiscal year
Slide 18 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
6
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Benefits of a Low Cohort Default Rate
<5% single most recent fiscal year
• Single disbursement for study abroad students
• Exempt from 30-day delay for first-time, first-year
undergraduate borrowers enrolled in study abroad
programs
Slide 19 © 2017 NASFAA
Sanctions for a High Cohort Default Rate
• CDR ≧ 30% can include:
– Institutional default prevention
requirements
– Change in school certification
– Restriction or loss in Title IV
participation
Slide 20 © 2017 NASFAA
Sanctions for a High Cohort Default Rate
• CDR ≧ 30% can include:
– Institutional default prevention
requirements
– Change in school certification
– Restriction or loss in Title IV
participation
• CDR ≧ 40%
– Loss of eligibility to participate
in the Federal Direct Student
Loan (Direct Loan) Program
Slide 21 © 2017 NASFAA
© 2017 NASFAA
7
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
What Can You Do?
Slide 22 © 2017 NASFAA
Loan Record Detail Report (LRDR)
Slide 23 © 2017 NASFAA
Q&A
•
•
•
•
•
School had a student borrower who died.
Was in repayment at the time of his death
Not in default at the time of his death
Student is included in the institution’s CDR
Based on information in NSLDS, student
died 11 months before loan defaulted
• Should he be included in the institution’s
CDR?
Slide 24 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
8
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Answer
• Student should not be included as a default in the cohort
default rate (CDR) for that year.
• If the borrower entered repayment prior to his death
– loan would be included in the number of students who entered
repayment
– would not be included as a borrower who defaulted
• The borrower is not included in the CDR as a defaulted
borrower if the borrower dies after entering repayment but
prior to entering default.
• This would be a valid reason to challenge the CDR data.
Slide 25 © 2017 NASFAA
Q&A
• Can a school repay a loan in order to avoid
default during a cohort default period?
Slide 26 © 2017 NASFAA
Answer
• Yes, but that does not exclude the loan from the school's
cohort default rate (CDR) calculation.
• Refer to Chapter 2.1 of the Cohort Default Rate Guide,
September 2016
– if a "school, its owner, its agent, contractor, employee, or another entity or
individual associated with the school makes a payment on the borrower’s
loan in order to avoid default during the cohort default period", the
"borrower is included in the cohort fiscal year (denominator) when
the borrower entered repayment," and the borrower is included (in the
numerator) because the loan meets the other specified condition
during the cohort default period."
• See chart of special circumstances included in handout
Slide 27 © 2017 NASFAA
© 2017 NASFAA
9
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
What Can You Do?
Challenge
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
Adjustment
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
Appeal
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Slide 28 © 2017 NASFAA
What Can You Do?
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
Adjustment
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
Appeal
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Challenge
Slide 29 © 2017 NASFAA
What Can You Do?
Challenge
•
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
After release of draft CDR
Adjustment
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
Appeal
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Slide 30 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
10
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Incorrect Data Challenge
Data incorrectly
reported in draft
CDR
Slide 31 © 2017 NASFAA
Incorrect Data Challenge
Data incorrectly
reported in draft
CDR
Borrower included
but should have
been excluded
Slide 32 © 2017 NASFAA
Incorrect Data Challenge
Data incorrectly
reported in draft
CDR
Borrower excluded
but should have
been included
Borrower included
but should have
been excluded
Slide 33 © 2017 NASFAA
© 2017 NASFAA
11
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
What to Look For On the LRDR
Some of the suggestions schools have shared
with NASFAA:
• Ensure your enrollment reporting is accurate so
borrowers aren’t entering payment prematurely.
• Make sure loans didn’t enter repayment before
the end of 6-month grace period
• Look for multiple loans for same borrower when
some are in default and others are not–
indication of possible error
• Look for inconsistencies on the report itself
– Example: loan showing as not in default yet being
included in the numerator.
Slide 34 © 2017 NASFAA
Incorrect Data Challenge
• Cohort Default Rate Guide, Chapter 4.1
Slide 35 © 2017 NASFAA
Participation Rate Index Challenge
• Number of students who obtained loans to attend the
school is very low in relation to the number of regular
students at the school.
• Alleges school should not be subject to a potential
loss of loan eligibility or potential placement on
provisional certification based solely on its CDR
because the school’s PRI meets one of the following
thresholds:
– Loss of eligibility
 3 consecutive CDRs of 30%, PRI for 1 year .0625 or
less
 Most recent CDR >40%, PRI .0832 or less; or
– Possible provisional certification
 2 out of 3 CDRS – 30% and PRI .0625 or less
Slide 36 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
12
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Participation Rate Index Challenge
Percentage of students who
borrowed under during a
specified 12-month period
School’s CDR
Participation Rate Index
Slide 37 © 2017 NASFAA
Participation Rate Index Challenge
• Cohort Default Rate Guide, Chapter 4.2
Slide 38 © 2017 NASFAA
What Can You Do?
Challenge
Adjustment
Appeal
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Slide 39 © 2017 NASFAA
© 2017 NASFAA
13
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
What Can You Do?
Challenge
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
Adjustment
•
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
After release of official CDR
Appeal
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Slide 40 © 2017 NASFAA
Uncorrected Data Adjustment
IDC
approved
Incorrect Data
Challenge
submitted on time
Changes
not
reflected in
official
CDR
Submit
Uncorrected
Data Adjustment
Slide 41 © 2017 NASFAA
Uncorrected Data Adjustment
• Cohort Default Rate Guide, Chapter 4.3
Slide 42 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
14
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
New Data Adjustment
Draft CDR LRDR
Official CDR LRDR
New,
Excluded, or
Changed
Data
Slide 43 © 2017 NASFAA
New Data Adjustment
• Cohort Default Rate Guide, Chapter 4.4
Slide 44 © 2017 NASFAA
What Can You Do?
Challenge
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
Adjustment
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
Appeal
Slide 45 © 2017 NASFAA
© 2017 NASFAA
15
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
What Can You Do?
Challenge
•
•
Incorrect Data Challenge (IDC)
Participation Rate Index Challenge (PRI)
Adjustment
•
•
Uncorrected Data Adjustment (UDA)
New Data Adjustment (NDA)
Appeal
•
•
•
•
•
Erroneous Data Appeal (ER)
Loan Servicing Appeal (LSA)
Economically Disadvantaged Appeal (EDA)
Participation Rate Index Appeal (PRI)
After release of official CDR
Slide 46 © 2017 NASFAA
Erroneous Data Appeal
LRDR contains
Successful Appeal
• New incorrect data
• Disputed data
• NSLDS corrected
• ED recalculates CDR
Slide 47 © 2017 NASFAA
Erroneous Data Appeal
• LRDR contains one or both:
– New, incorrect data
• Newly included, excluded, or changed
– Disputed data


Included in an Incorrect Data Challenge
Same error still included in official CDR data
Slide 48 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
16
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Erroneous Data Appeal
• Cohort Default Rate Guide, Chapter 4.5
Slide 49 © 2017 NASFAA
Loan Servicing Appeal
LRDR contains
Successful Appeal
• Improperly serviced
loans
• Disputed data
• Improperly serviced
loans removed from
CDR
• ED recalculates CDR
Slide 50 © 2017 NASFAA
Loan Servicing Appeal
• A defaulted Direct Loan is improperly serviced if one
or more of the following occurs:
– Borrower never made a loan payment and school can
document servicer/lender was required but failed to
• Send at least one letter (other than final demand letter)
prompting borrower to make payments
• Send a final demand letter to the borrower
• Attempt at least one telephone call to the borrower
• Document skip tracing was performed if servicer did not have
borrower’s current address
• Submit a request for pre-claims assistance or default aversion
assistance to the guaranty agency (for FFEL)
Slide 51 © 2017 NASFAA
© 2017 NASFAA
17
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Loan Servicing Appeal
• If a borrower makes at least one payment or if
the servicer performs all of the above on a
timely basis, the loan is properly serviced for
CDR purposes.
Slide 52 © 2017 NASFAA
Loan Servicing–Tips from Schools
• Ask for information from all servicers. When in eCDR
check all the servicers
• Each servicer provides information in a different format
– Some reports aren’t complete and sometimes have to go through
some back/forth with servicer
– One example, servicer had 31 records missing
• Sample size may vary
• Servicer provides a representative sample
– Can work in your favor.
– Example: You identify 3 improperly serviced loans
– ED applies a formula to come up with a valid statistical prediction
and that multiplier may result in a larger number of improperly
serviced loans being removed from CDR.
Slide 53 © 2017 NASFAA
Loan Servicing Appeal
• Cohort Default Rate Guide, Chapter 4.6
Slide 54 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
18
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
Economically Disadvantaged Appeal
Slide 55 © 2017 NASFAA
Economically Disadvantaged Appeal
• Successful appeal:
– School not subject to sanction for that CDR
fiscal year
– Does NOT change the school’s official CDR
Slide 56 © 2017 NASFAA
Economically Disadvantaged Appeal
• Cohort Default Rate Guide, Chapter 4.7
Slide 57 © 2017 NASFAA
© 2017 NASFAA
19
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Participation Rate Index Appeal
• School believes it should not be subject to
sanction based on low participation rate
• Only allowed when school subject to loss of
eligibility or potential provisional certification
• School sends completed appeal to ED
• Successful appeal
– Will not be subject to sanction for that CDR
fiscal year
Slide 58 © 2017 NASFAA
Participation Rate Index Appeal
• Cohort Default Rate Guide, Chapter 4.8
Slide 59 © 2017 NASFAA
eCDR
https://ecdrappeals.ed.gov/ecdra/index.html
Slide 60 © 2017 NASFAA
Your Cohort Default Rate: What Does It Mean?
20
© 2017 NASFAA
Your Cohort Default Rate:
What Does It Mean?
ED-Initiated
Appeals
Slide 61 © 2017 NASFAA
ED-Initiated Appeals
• Average Rate Appeal
• Thirty-or Fewer Borrower Appeal
• ED automatically determines if schools meet
criteria prior to release of official CDR
• Cohort Default Rate Guide, Chapters 4.9 and
4.10
Slide 62 © 2017 NASFAA
Resources
• NASFAA AskRegs Knowledgebase
https://www.nasfaa.org/askregs
• NASFAA Student Aid Index
https://www.nasfaa.org/StudentAidIndex
• Cohort Default Rate Guide
https://ifap.ed.gov/DefaultManagement/final
cdrg.html
Slide 63 © 2017 NASFAA
© 2017 NASFAA
21
Your Cohort Default Rate: What Does It Mean?
Your Cohort Default Rate:
What Does It Mean?
Your Cohort Default Rate: What Does It Mean?
22
© 2017 NASFAA
Overview of Cohort Default Rate
Cohort Default Rate Formulas
Non-Average Rate Formula
Used when a school has 30 or more borrowers who enter repayment during a cohort fiscal year.
Numerator
Number of borrowers in the denominator who
defaulted or met the other specified condition
during the cohort default period
=
Denominator
Cohort
Default
Rate
Number of borrowers who entered repayment
in the cohort fiscal year
Average Rate Formula
Used when a school has 29 or fewer borrowers who enter repayment during a cohort fiscal year, if the school
had a cohort default rate (CDR) calculated for the two previous fiscal years.
Numerator
Number of borrowers in the denominator who
defaulted or met the other specified condition
during the cohort default period
Denominator
=
Number of borrowers who entered repayment
in the current cohort fiscal year and the two
preceding fiscal years
Cohort
Default
Rate
Source: Cohort Default Rate Guide, pp. 2.1-6 to 2.1-7
Title IV Loans Included in the Cohort Default Rate
Calculation
Federal Family Education Loan (FFEL) Program
• Federal Stafford Loan
• Federal Unsubsidized Stafford Loan
Federal Direct Student Loan (Direct Loan) Program
• Direct Subsidized Loan
• Direct Unsubsidized Loan
© 2017 NASFAA
23
Your Cohort Default Rate: What Does It Mean?
Title IV Loans Not Included in the Cohort Default Rate
Calculation
•
•
•
•
•
•
Federal PLUS Loans
Federal Consolidation Loans*
Federal Direct PLUS Loans
Federal Direct Consolidation Loans*
Federal Perkins Loans
Federal Insured Student Loans
*These loans are excluded from the CDR calculation, but a defaulted consolidation loan may cause the
borrower to be included in the numerator of that CDR calculation if the default occurs during the cohort default
period.
When is the CDR Released?
February
Draft Rate
September
Official Rate
Your Cohort Default Rate: What Does It Mean?
24
© 2017 NASFAA
Benefits and Sanctions Related to the Official Cohort
Default Rate
Low Official Cohort Default Rate Benefits
Less than 5 percent for most recent
fiscal year and is an eligible home
institution to cover COA in a study
abroad program
• Ability to disburse loans in single installment to a student
studying abroad.
Less than 15 percent for each of the
three most recent fiscal years
• Ability to make a single disbursement of loans for one
semester, trimester, quarter, or four-month period.
• Option to disburse to first-year, first-time borrowers studying
abroad without the 30-day delay.
• Option to disburse to first-year, first-time borrowers without
the 30-day delay.
High Official Cohort Default Rate Sanctions
Equal to or greater than 40 percent for
any one fiscal year
• Loss of eligibility to participate in the Direct Loan Program.
Equals 30 percent or more for any one
fiscal year
• Must create a default prevention task force that will develop
and implement a plan to address the institution’s high cohort
default rate.
• Plan must be submitted to the U.S. Department of Education
(ED) for review.
Equals 30 percent or more for two
consecutive fiscal years
• Must submit to ED a revised default prevention plan and may
be placed on provisional certification.
Equals 30 percent or more for the three
consecutive fiscal years
• Loss of eligibility to participate in both the Direct Loan
Program and in the Federal Pell Grant Program.
© 2017 NASFAA
25
Your Cohort Default Rate: What Does It Mean?
This page intentionally left blank.
Your Cohort Default Rate: What Does It Mean?
26
© 2017 NASFAA
Cohort Default Rate Timeline:
Challenges, Adjustments, and Appeals
Challenges
Incorrect Data Challenge
(IDC)
Participation Rate Index
Challenge (PRI)
Adjustments
Uncorrected Data
Adjustment (UDA)
New Data Adjustment
(NDA)
© 2017 NASFAA
Cycle
Draft
Draft
Action
School receives CDR
February
School sends completed IDC to
data manager via eCDR
Within 45 days of time frame
begin date
Data manager sends IDC
response to school via eCDR
Within 30 days of the receipt of
school’s IDC
School receives CDR
February
School sends completed PRI
challenge to ED
Within 45 days of time frame
begin date
ED sends school written
notification of its decision which
is final.
Before official CDRs are
published
Cycle
Official
Official
When
Action
When
School receives official CDR
September
School sends ED completed
UDA via eCDR
Within 30 days of time frame
begin date
School receives official CDR
September
School sends NDA allegations
to data manager via eCDR
Within 15 days of time frame
begin date
Data manager sends NDA
response to school via eCDR
Within 20 days of receipt of
school’s NDA allegations
School requests clarification via
eCDR (if necessary)
Within 15 days of receipt of
data manager response
Data manager sends requested
information to school via eCDR
Within 20 days of receipt of
school’s clarification request
School sends completed NDA
via eCDR
Within 30 days of receipt of
final data manager response
27
Your Cohort Default Rate: What Does It Mean?
Appeals
Loan Servicing Appeal
(LSA)
Cycle
Official
Your Cohort Default Rate: What Does It Mean?
Action
When
School receives official CDR
September
School sends request for loan
servicing records to data
manager and ED via eCDR
Within 15 days of time frame
begin date
Data manager notifies school
and ED via eCDR of any fee for
providing records along with a
list of the representative sample
and a description of how
sample was selected
Within 20 days of receipt of
school’s request
School pays fee, if applicable
Within 15 days of data manager
notification
Data manager documents fee
and sends loan servicing
records to school via eCDR
Within 20 days of receipt of
payment or within 20 days of
receipt of schools request if no
fee is charged
School requests clarification,
replacement, or ED records via
eCDR
Within 15 days of receipt of
records
Data manager sends requested
information to school via eCDR
Within 20 days of schools
request
School sends completed LSA
to ED via eCDR
Within 30 days of receipt of
records, except, if later as
provided in 34 CFR
668.212(c)(10)(ii), as
applicable, if school is also
filing a new data adjustment or
erroneous data appeal
28
© 2017 NASFAA
Appeals (continued)
Erroneous Data Appeal
(ER)
Economically
Disadvantaged Appeal
(EDA)
Participation Rate Index
Appeal (PRI)
© 2017 NASFAA
Cycle
Official
Official
Official
Action
When
School receives notice of loss
of eligibility or notice of
provisional certification
September
School sends ER allegations to
data manager
Within 15 days of time frame
begin date
Data manager sends ER
response to school
Within 20 days of receipt of the
school’s ER allegations
School requests clarification (if
necessary)
Within 15 days of receipt of
data manager response
Data manager sends requested
information to school
Within 20 days of receipt of the
school’s request for clarification
School sends completed ER to
ED
Within 30 days of receipt of
final data manager response,
or, if applicable, and later, as
provided in 34 CFR
668.211(b)(6)(ii)
School receives notice of loss
of eligibility or notice of a
second consecutive three-year
CDR subjecting school to
potential placement on
provisional certification
September
School sends written assertion
by its management to ED
Within 30 days of time frame
begin date
School sends completed EDA
to ED
Within 60 days of time frame
begin date
School receives notice of loss
of eligibility or of a second
three-year CDR that, in
combination with an earlier
three-year rate, potentially
subjects the school to
provisional certification
September
School sends completed PRI
appeal to ED
Within 30 days of time frame
begin date
29
Your Cohort Default Rate: What Does It Mean?
ED-Determined
Appeals
Average Rate Appeal
Thirty-or-Fewer Borrower
Appeal
Cycle
Official
Official
Your Cohort Default Rate: What Does It Mean?
Action
When
School receives notice of loss
of eligibility; ED notifies school
that it may qualify for Average
Rate Appeal
September
School sends completed
Average Rate Appeal to ED
Within 30 days of time frame
begin date
School receives notice of loss
of eligibility; ED notifies school
that it may qualify for Thirty-orFewer Borrowers Appeal
September
Schools sends completed
Thirty-or-Fewer Borrower
Appeal to ED
Within 30 days of time frame
begin date
30
© 2017 NASFAA
Cohort Default Rate:
Challenges, Adjustments, and Appeals
Challenges
Result of
Successful Submission
Why
When
to File
Incorrect Data
Challenge (IDC)
668.204(b)
School believes the LRDR for the
draft CDR contains incorrect
data. Opportunity to correct data
before official CDR is released.
(If accuracy of data not
challenged in IDC, the school
cannot contest the accuracy
of that data later in an
Uncorrected Data Adjustment
or Erroneous Data Appeal
based on disputed data.)
NSLDS will be
corrected and the
corrected data will be
used with calculating
the official CDR.
Draft
Participation Rate Index
Challenge (PRI)
668.204(c)
School believes it may be
subject to loss of eligibility or
potential provisional
certification based on its CDR
with the release of the official
CDR; however, school can
demonstrate it should not be
subject to sanction or
potential provisional
certification because of its
low participation rate index.
School will not be
subject to the
anticipated sanction or
provisional certification.
If challenges were
based on a prior official
CDR, that CDR will not
be basis for a future
sanction.
Draft
Adjustments
Result of
Successful Submission
Why
When
to File
Uncorrected Data
Adjustment (UDA)
668.209
School believes the LRDR for
the official CDR contains
data that should have been
corrected as a result of its
successful Incorrect Data
Challenge.
NSLDS will be
corrected and ED will
recalculate the CDR.
Official
New Data Adjustment
(NDA)
668.210
School, which is not subject to
sanction, believes the LRDR for
the official CDR contains data
that was not included in the draft
CDR or that is different from the
draft CDR data.
(If the school is subject to
sanctions, Erroneous Data
Appeal should be submitted
instead.)
NSLDS will be
corrected and ED will
recalculate the CDR.
Official
© 2017 NASFAA
31
Your Cohort Default Rate: What Does It Mean?
Appeals
Result of
Successful Submission
Why
When
to File
Erroneous Data Appeal
(ER)
668.211
A school that is subject to
sanction believes the LRDR for
the official CDR contains new,
incorrect data and/or contains
disputed data that was included
in an incorrect data challenge.
NSLDS will be
corrected and ED will
recalculate the CDR. If
the recalculated rate
falls below the relevant
threshold, the school
will no longer be
subject to loss of
eligibility or provisional
certification.
Official
Loan Servicing Appeal
(LSA)
668.212
School believes the LRDR for the
official CDR contains defaulted
loans that were improperly
serviced for CDR purposes and
contests the servicing of the
borrower’s loan account.
ED will recalculate the
CDR.
Official
Economically
Disadvantaged Appeal
(EDA)
668.213
School believes it should not be
subject to loss of eligibility or
potential provisional certification
based on its CDR because of its
demonstrated high number of
low-income students attending
the school and the school’s
placement rate (for a nondegreegranting school) or the school’s
completion rate (for a degreegranting school).
School will not be
subject to sanction for
that CDR year.
Official
Participation Rate Index
Appeal (PRI)
668.214
School believes it should not be
subject to loss of eligibility or
provisional certification based on
its cohort default rates because
of its low participation rate index.
School will not be
subject to sanction for
that cohort fiscal year.
If the school’s
participation rate index
is for a cohort fiscal
year that meets the
relevant threshold, the
CDR for that cohort
fiscal year will not be
the basis for a future
sanction.
Official
Your Cohort Default Rate: What Does It Mean?
32
© 2017 NASFAA
References for Cohort Default Rate Issues
The following is a list of cohort default rate resources that you may find helpful if you need additional
information or clarification on a topic covered in this webinar.
Law
The Higher Education Act of 1965, as amended:
• Section 435(m) – Definitions for Student Loan Insurance Program
Regulations
34 CFR 668, Subpart N – Cohort Default Rate
34 CFR 668.16(m) – Standards of Administrative Capability
34 CFR 682.401 – Federal Family Education Loan (FFEL) Program, Basic Program Agreement
34 CFR 682.410 – Fiscal, Administrative, and Enforcement Requirements
34 CFR 682.603 – Certification by a School that Participated in the FFEL Program in Connection with a Loan
Application
34 CFR 685.303 – William D. Ford Federal Direct Loan Program, Processing Loan Proceeds
Federal Registers
Federal Register, 10/29/09, pp. 55910 to 55914, General and Non-Loan Programmatic Issues; Final Rule
Federal Register, 10/28/09, pp. 55628 to 55633, Institutions and Lender Requirements Relating to Education
Loans, Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education
Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule
Federal Register, 8/21/09, pp. 42391 to 42400, General and Non-Loan Programmatic Issues; Notice of
Proposed Rulemaking
Federal Register, 7/28/09, pp. 37435 to 37446, Institutions and Lender Requirements Relating to Education
Loans, Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education
Loan Program, and William D. Ford Federal Direct Loan Program; Notice of Proposed Rulemaking
Dear Colleague Letters
GEN-14-03 – Impact of Cohort Default Rates on Institutional Title IV Program Eligibility
GEN-05-14 – Sample Default Prevention and Management Plan
Electronic Announcements
(At time this handout was completed, the Draft FY2014 Cohort Default Rates had not been distributed)
© 2017 NASFAA
33
Your Cohort Default Rate: What Does It Mean?
Electronic Announcement, 9/26/16 – FY2013 3-Year Official Cohort Default Rates Distributed September 26,
2016
Electronic Announcement, 3/2/16 – FY 2013 3-Year Draft Cohort Default Rates Distributed March 1, 2016
Electronic Announcement, 2/29/16 – Re-distribution of FY 2013 3-Year Draft Cohort Default Rates
Accompanying Data
Electronic Announcement, 3/11/15 – Loan Record Detail Report (LRDR) Import Tool
Electronic Announcement, 7/14/11 – New Default Prevention Resource Information Web Page
Electronic Announcement, 2/25/11 – Definition of Default for Student Eligibility and Cohort Default Rate
Calculations
Other Resources
2016–17 FSA Handbook, Volume 2, School Eligibility and Operations (Chapter 4: Audits, Financial Standards,
Limitations, & Cohort Default Rates)
Cohort Default Rate Guide, September 2016 (available at
https://ifap.ed.gov/DefaultManagement/CDRGuideMaster.html)
Default Prevention Resource Information page (available at
http://ifap.ed.gov/DefaultPreventionResourceInfo/index.html)
Your Cohort Default Rate: What Does It Mean?
34
© 2017 NASFAA
This page intentionally left blank.
The National Association of Student
Financial Aid Administrators (NASFAA)
provides professional development
for financial aid administrators;
advocates for public policies
that increase student access and
success; serves as a forum on
student financial aid issues;
and is committed to diversity
throughout all activities.
© 2017 National Association of Student Financial Aid Administrators
1101 CONNECTICUT AVENUE NW, SUITE 1100
WASHINGTON, DC 20036-4303
202.785.0453 FAX. 202.785.1487
WWW.NASFAA.ORG