Appealing Your Cohort Default Rate Sarah Soper Indiana University East

What is a default? A borrower defaults on their federal student loan when they fail to make an installment payment when due or show other reasons to conclude that they no longer intend to honor their obligation to repay, provided that this failure persists for 270 days

Cohort Default Rate (CDR) A school’s cohort default rate is the percentage of a school’s federal student loan borrowers who enter repayment within the cohort fiscal year and default within the cohort default period

CDR Measured: 3 Year Total borrowers who entered repayment in FY2010 who defaulted in FY2010, FY2011 and FY2012 Total borrowers who entered repayment during FY2010

CDR Timing Draft default rates are sent out to schools annually in February – Opportunity to collect data and review the rate measurements for accuracy Official default rates are electronically issued in September School must be enrolled in the eCDR process for electronic delivery

Impact of CDR Benefits of Low Rate – No 30 day delay – Single disbursement allowed Impact of High Rate – 30 day delay – Possible provisional certification – Default prevention task force

Appeals What can be appealed? How do I make an appeal? Is it worth the effort?

What can be appealed? Appeals can be made about the accuracy of the data used to calculate your CDR 45-day window from issuance of draft CDR rates to submit a challenge to the data – correcting bad data reported in NSLDS Common errors to look for: – Incorrect separation date – Duplicate loan information – Inconsistent data between servicers

How do I make an appeal? Schools must challenge data during the Draft Cycle or forfeit the right to question the data during the Official Cycle Student loan data that appears to be incorrect must be documented to clearly show the accurate loan status A letter from your school’s president or CEO must accompany the appeal Appeals are made electronically

Is it worth the effort? Reviewing the data takes time during February and March If your institution’s CDR has crossed a line which will lead to benefit loss or penalties, the time invested may be very worthwhile Most of the data is likely to be accurate, but some schools have reported reducing their CDR s by up to 4%