Note: In the following FAQs, "the Department" refers to the U.S. Department of Education, "FFEL" refers to Federal Family Education Loan, and "FDSLP" or "Direct Loan" refers to William D. Ford Federal Direct Loan. "NSLDS" refers to National Student Loan Data System.
A. Repayment information is a default management report provided to schools by the Department through NSLDS. This report (DRC015) provides, on a monthly basis, school-specific repayment information regarding students who have obtained FFEL and Direct Loans to attend school and have entered into repayment on those loans in the first 12 months of the most recent 24-month period.
All schools that participate in any of the Title IV Federal Student Aid (FSA) programs and have students who meet the above criteria may access the repayment information. This information does not represent a school's cohort default rate; rather it is provided solely as a service to help schools track loans and correct errors associated with loans that recently entered into repayment. By monitoring when borrowers enter repayment, a school can make students aware of all the repayment options available to them to help a borrower avoid default. Schools can also use the repayment information to ensure the data reported to NSLDS is accurate. If errors in data are found, schools can contact their data manager immediately instead of waiting until the release of the draft cohort default rates to correct inaccuracies.
A. For schools having 30 or more borrowers entering repayment in a fiscal year, the school's cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loans (FFELs) and/or William D. Ford Federal Direct Loans (Direct Loans) during that fiscal year and default (or meet other specified conditions) before the end of the following fiscal year. For schools with fewer than 30 borrowers entering repayment during a fiscal year, the cohort default rate calculation includes student borrowers who entered repayment in that fiscal year and the two previous fiscal years and defaulted before the end of the following fiscal year.
A. Defaulted federal student loans cost taxpayers money. By calculating cohort default rates, sanctioning schools with higher rates, and providing benefits to schools with lower rates, the Department creates an incentive for schools to work with borrowers to reduce defaults. As a result, cohort default rates help save taxpayers money.
A. The Federal Family Education Loans (FFELs) included in the cohort default rate calculation are
Subsidized FFEL and Unsubsidized FFEL (collectively referred to as FFEL) and
Federal Supplemental Loans for Students (Federal SLS loans).
The Direct Loans included in the cohort default rate calculation are
Federal Direct Subsidized William D. Ford Loans and Federal Direct Unsubsidized William D. Ford Loans (collectively referred to as Direct Loans).
A. The Department releases cohort default rates twice each year. Generally, the Department releases draft cohort default rates in January or February. After schools receive their draft cohort default rate data, schools are provided an opportunity to identify and correct any inaccuracies by submitting an incorrect data challenge. The Department then releases the official cohort default rates. Official cohort default rates are generally released to schools and the public approximately six months after the release of the draft cohort default rates. However, the official cohort default rate must be released no later than September 30th of each year.
A. The Department provides draft cohort default rates only to schools and does not release them to the public. The Department sends draft cohort default rates to all schools that the Department's records indicate:
The Department provides official cohort default rates to schools and also makes them available to the public. The Department releases official cohort default rates for all schools that the Department's records indicate:
A school may download an electronic copy of its Loan Record Detail Report (LRDR) for the draft cohort default rate or official cohort default rate periods. The public can also download a listing of all of the official cohort default rates in the form of a press package, PEPS300 Report. This press package also contains a listing of those schools that are subject to sanctions, PEPS304 and PEPS305, as a result of high official cohort default rates.
Note: If your school did not receive any data on the LRDR pages (just a heading), it means that your school did not have any students in default or repayment for the FY 07, FY 06 or FY 05 cohort periods; however, your school did have at least one borrower in repayment in any of the past cohort periods.
A. A school involved in a merger, acquisition or other change in status should be aware that the change may affect the application and calculation of its cohort default rates and that certain sanctions may be applicable to the school after the change in status. After a change in status, cohort default rates are applied to a school according to the type of change in status. See Figure 2.5.1 in the Guide, "Change in Status and Evasion." Also refer to the Federal Register, Vol. 65, No. 212, November 1, 2000, CFR 668.184, "Determining cohort default rates for institutions that have undergone a change in status."
A. All schools contemplating a change in status may submit a letter to Portfolio Performance Division (formerly Default Prevention and Management) before making the change as different cohort default rates may be applied to a school as a result of a change in status. The letter should include the details of the change in status (for example, if the school shall be part of a teach-out), and request guidance regarding the consequences, if any, the change in status shall have on the school's eligibility. The school should send a copy of the letter to your School Participation Team. See Chapter 2.4, figure 2.4.1 of the Guide, "Department Offices and Addresses," for School Participation Team addresses.
Portfolio Performance Division (formerly Default Prevention and Management) shall send a written response indicating how the historical, current, and future cohort default rates shall be calculated based on the proposed change in status. Schools can use this response to evaluate whether the change in status shall be beneficial or detrimental to the schools involved in the change.
A. Yes, the draft and official cohort default rates may differ if the data used to calculate the official cohort default rates in NSLDS changed between the time that the draft and the official cohort default rates were calculated. New data is continually coming into NSLDS from lenders and data managers.
A. You can find this information on this website! Go to http://www.ed.gov/offices/OSFAP/defaultmanagement/defaultrates.html .
A. No, timeframes are mandated by regulation; therefore no extensions are granted. No exceptions are made.
A. First of all, don't panic. Your school will not receive a cohort default rate (CDR) notification package if your school has NOT enrolled in eCDR, or if your school has never had a borrower enter into repayment in the FFEL or Direct Loan programs. If neither of the above applies, then your school should have received an eCDR notification package.
A. For the first time for the Official FY 2007 cycle, foreign schools will receive their cohort default rates electronically via the eCDR process just as domestic schools have been doing for several years. The ED foreign school team has encouraged all schools to enroll and participate in the eCDR process. If your school has not enrolled in the eCDR process or if you need additional information, please contact the Foreign Schools Team at (202)377-3168.
Schools who have not received their cohort default rates via the electronic process will need to get their default rates from their Loan Record Detail Report (LRDR). This report can be downloaded from Report DRC035 at http://www.nsldsfap.ed.gov.
A. Instructions for downloading and reviewing the eCDR notification package can be found at http://www.ifap.ed.gov/eannouncements/0224eCDR6SixthBroadcast.html. If you need additional help, you can contact the SAIG helpdesk at (800) 330-5947.
A. The purpose of releasing draft cohort default rates is to allow schools the opportunity to review their data and notify the applicable guaranty agencies if there is any erroneous data on the Loan Record Detail Report (LRDR). Schools should compare the data on their LRDR to the data in their files for each student listed. If any students do not belong in the cohort period or have not defaulted during that cohort period, then you notify the guaranty agencies (GA). If they agree with your findings, the GA will make the appropriate corrections to the data. When the official rate is calculated in the fall, the data will have been corrected. If you do not challenge the incorrect data (Incorrect Data Challenge), you may not be able to do so when the official rates are released.
Additionally, even if your cohort default rates are low, the number of borrowers in default and/or the dollars in default may be significant. This costs the schools, taxpayers, and the borrowers themselves in the long run. Also, your school's official cohort default rates may be inaccurate due to errors in underlying data, and the Department may make decisions based on that data. Schools are required to provide accurate data to ED via NSLDS Enrollment Reporting.
A. The Department strongly recommends all schools implement a Default Prevention and Management (DPM) Plan. To facilitate that implementation the Secretary of Education (Secretary) has provided a sample DPM plan at http://www.ifap.ed.gov/dpcletters/attachments/GEN0514Attach.pdf. Additionally, schools applying for Title IV programs for the first time and schools who have undergone a change in ownership that resulted in a change in control are required by regulation (34 CFR 668.15) to implement a DPM Plan. Those schools may either adopt the Secretary's sample plan or create their own unique DPM Plan, which is reviewed and approved by the DPM office. Default Prevention and Management staff are available to assist schools in developing a default prevention plan, and they may be reached by phoning (202) 377-4259.
A. Late Stage Delinquency Assistance (LSDA) is available for both Direct Lending and FFEL Program schools. LSDA focuses on students who are more than 240 days delinquent in their loan repayment obligation. With LSDA, we ask schools to act as liaison between borrowers and loan servicers. Once the connection is made, there is help available to prevent the loan from entering default. Employing LSDA at your school will require minimal time and staff, reduce your school's cohort default rate and save your former students from the unpleasant consequences of default. It is a win-win opportunity. For more information on this default reduction technique as well as others, please contact either Mark Walsh at (816) 268-0412, mark.walsh@ed.gov or John Pierson at (404) 562-6269, john.pierson@ed.gov.
A. The Cohort Default Rate Guide (Guide), which is a link on the Default Prevention and Management Web site, is a comprehensive reference tool. Click on the Guide (http://ifap.ed.gov/DefaultManagement/DefaultManagement.html) page 1.1-3 and go to Page 1.1-4, figure 1.1.1 to determine how to best use the Guide based on different situations or level of knowledge and experience with the cohort default rates.
On the Guide homepage, there is a link to condensed version of the Guide known as the Cohort Default Rate Guide Quick Reference. The Quick Reference presents some of the key elements of the Guide in a more informal manner. It provides a quick summary of what you should do during the draft and official cohort default rate cycles.
The FSA Assessments Default Management module is designed to assist schools in managing cohort default rates and to help prevent students from defaulting on Federal students loans. This is done through a series of statements, questions and links to additional resources. The FSA Assessments Default Management module is located at http://www.ifap.ed.gov/qahome/qaassessments/defaultmanagement.html.
Portfolio Performance Division (formerly Default Prevention and Management) can provide help or direction on a full range of default prevention and management questions and services. Please call (202) 377-4259 or send an e-mail to FSA.schools.default.management@ed.gov.
A. All of a borrower's loans that entered into repayment within a cohort fiscal year are listed on a school's Loan Record Detail Report (LRDR) for that cohort period. The data on a school's LRDR is obtained from NSLDS and is used to calculate a school's cohort default rate. Although one of your borrower's may have more than one loan listed on your LRDR, because several of the borrowers loans entered into repayment in the same cohort period, the borrower (per social security number) is only counted once in the calculation. The loan that is counted in the calculation will have the letter "D" (denominator) or "B" (both numerator and denominator) listed on the LRDR under the column title "usage 1 code." All other loans for that student were eligible to be counted but were not. They will be listed on the LRDR and the letter "E" (eligible but not counted in the calculation) noted in the "usage 1 code" column. Please see Chapter 2.3 in the Cohort Default Rate Guide for illustrations of how to read the LRDR.
Note: One exception to this might be that a borrower may be counted twice if the borrower took out loans at two different schools and subsequently these two schools merge.
A. Go to http://www.eligcert.ed.gov for information. You may also contact the Case Team at 202-377-3173. Please know that there are specific guidelines and requirements for schools that wish to withdraw or reapply for participation in the Title IV programs.
A. Yes, all the templates/spreadsheet you need to do challenges/appeals is on the Guide homepage at http://ifap.ed.gov/DefaultManagement/finalcdrg.html. These forms should facilitate the process for you.
A. eCDR Appeals is the vehicle for schools to electronically submit certain challenges, adjustments, and appeals of cohort default rate data to the Department of Education and/or to the relevant guarantee agency and/or Direct Loan Servicer. eCDR Appeals is a single web-based user interface for all users. This process applies to the Federal Family Education Loan and Direct Loan Programs only.
A. Links to the User Guides for eCDR Appeals, as well as a direct link to the system, are available at https://ecdrappeals.ed.gov/ecdra/index.html. Schools should check the Information for Financial Aid Professionals (IFAP) website for any updated information on eCDR Appeals. (http://ifap.ed.gov/)
A. Yes, the HEOA states that beginning in 2012, we will begin releasing a 3-year cohort default rate. In fact, in year 2012, we will be issuing both the FY 09 3-year rate as well as the FY 10 2-year default rate. The same thing will happen in 2013. In 2014, we will only calculate the 3-year rate which is the first year that there will be three consecutive cohort years of 3-year rates and schools will be sanctioned based upon these rates. The denominator (date entered repayment) will continue to be for one year and the change will be to the numerator (default date) to encompass three years instead of two years.
As more information is available, it will be posted on the Web site for your convenience.
