Posted Date: March 25, 2013

Author:  Katrina Turner, Director, Operations Performance Division, Federal Student Aid

Subject: FY 2010 3-Year Draft Cohort Default Rates Distributed March 25, 2013

Today we distributed the FY 2010 3-Year Draft Cohort Default Rate notification packages to all eligible domestic and foreign schools. This announcement provides information about our distribution of the 3-Year Draft Cohort Default Rates. We previously distributed the FY 2011 2-Year Draft Cohort Default Rates separately on Monday, March 18, 2013.

Background for 3-Year Cohort Default Rates

As explained in a December 7, 2009 Electronic Announcement, the Higher Education Opportunity Act (HEOA), enacted on August 8, 2008, made a number of changes to the student aid programs authorized under Title IV of the Higher Education Act (HEA), including the timeframes for the calculation of Family Federal Education Loan and Direct Loan Cohort Default Rates (CDRs). On October 28, 2009, the Department of Education (the Department) published in the Federal Register the regulations that will govern the calculation of default rates beginning with the FY 2009 cohort year. Under the new provisions, a school's Cohort Default Rate is calculated as the percentage of borrowers in the cohort who default before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment.

The FY 2011 2-year cohort default rate will be the last 2-year rate calculated and released. Beginning in 2014, only 3-year rates will be published since at that time three 3-year rates would have been calculated (FY 2009 published in 2012, FY 2010 published in 2013, and FY 2011 published in 2014).

As noted in the cohort default rate regulations at 34 CFR 668.217, if a school's FY 2010 official 3-year CDR is equal to or greater than 30 percent when the official CDR is published in September 2013, the school will be required to establish a Default Prevention Task Force and develop a default prevention plan. The plan must be submitted to the Department. In developing the plan, a school will be required to:

  1. Identify the factors causing the default rate to exceed the threshold;
  2. Establish measureable objectives and the steps the school will take to improve its cohort default rate; and
  3. Specify the actions the school will take to improve student loan repayment, including counseling students on repayment options.

Questions regarding developing and submitting the default prevention plan should be sent to defaultpreventionassistance@ed.gov.

Note: This is the last year in which school sanctions will be based on 2-Year Cohort Default Rates. School sanctions based on 3-Year Cohort Default Rates will begin in 2014 with the release of the FY 2011 3-Year Cohort Default Rate.

Distribution of FY 2010 3-Year Draft Cohort Default Rates

For both eligible domestic and foreign schools enrolled in the Electronic Cohort Default Rate (eCDR) notification process, we sent FY 2010 3-Year Draft Cohort Default Rate and accompanying documentation via the Student Aid Internet Gateway (SAIG). This information was sent to the SAIG mailbox for the destination point administrator designated by the school. Each eCDR package contained the following information:

    • Cover Letter (message class SHDRLROP)

    • Reader-Friendly Loan Record Detail Report (message class SHCDRROP)

    • Extract-Type Loan Record Detail Report (message class SHCDREOP)

We did not send eCDR notification packages to any school not enrolled in eCDR. These schools may download their cohort default rates and accompanying Loan Record Detail Reports from the National Student Loan Data System (NSLDS) via the NSLDS Professional Access Web site.

We also sent a Network Message (message class MESSAGTB) to each school's SAIG mailbox that provides instructions for downloading, viewing, and printing the eCDR files. If a technical problem caused by the Department results in an inability to access the data, schools have five business days from the receipt of the eCDR notification package to notify Operations Performance Division at the e-mail address given below.

Any school that did not have a borrower in repayment, during the current or any of the past cohort default rate periods, will not receive a FY 2010 3-year draft cohort default rate notification package. These schools are considered to have no cohort default rate data and no cohort default rate.

Begin Dates for Challenging FY 2010 3-Year Draft Cohort Default Rates

The time period for challenging a school's FY 2010 3-Year Draft Cohort Default Rate under 34 C.F.R Part 668, Subpart N begins on Tuesday, April 2, 2013 for all schools.

All Incorrect Data Challenges (IDC) must be made through the eCDR Appeals application. Participation Rate Index Challenges (PRI) will continue to be submitted via hard copy. As a reminder, eCDR Appeals is a web-based application that allows schools to electronically submit certain challenge and adjustment requests during the specified timeframes. The application also allows data managers (guaranty agency or Federal Loan Servicer) and Federal Student Aid personnel to electronically view and respond to these challenge/adjustment requests. The application tracks the entire life cycle of each request from the time the case is submitted until the time a decision is made and the case is closed.

Note: The eCDR Appeals application allows schools to submit an IDC for both the FY 2011 2-Year Cohort Default Rate and the FY 2010 3-Year Cohort Default Rate.

Contact Information

For additional information regarding the school cohort default rate calculation or the challenge processes, please refer to the Cohort Default Rate Guide at http://ifap.ed.gov/DefaultManagement/CDRGuideMaster.html.

For specific information regarding eCDR Appeals, please visit the eCDR Appeals Web site, where you will also find the User Guides for each of the challenge and adjustment processes, as well as a User Guide for the registration process. Additionally, you will find links to recordings of eCDR Appeals demonstration sessions to assist first-time users.

You may also contact us by e-mailing fsa.schools.default.management@ed.gov or by calling the Operations Performance Division Hotline at 202/377-4259.

   

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