1. Decoding CDR Reports and Correcting Data

2. Why Review Your CDR Data –High CDR could result in Adverse publicity Loss of Title IV eligibility Loss of access to private loan funds Extra work Administrative capability

3. Why Review Your CDR Data –Correct data –Accurate data –Timely data Administrative capability Better-quality decision-making

4. Why Review Your CDR Data –When borrowers default Pay more in interest and collections fees Government can seize wages, tax refunds, Social Security, and disability benefits Administrative capability Better service to students Better-quality decision-making

5. Objectives Understand Cohort Default Rate (CDR) cycle Decode Loan Record Detail Report Learn how to collect, compare, and correct data Know common appeal errors to avoid

6. Understanding the Cohort Default Rate Cycle

7. What Is a Cohort Default Rate? The Numerator is the number of Stafford loan borrowers from the denominator who default within a cohort period The Denominator is the number of Stafford loan borrowers who enter repayment within a cohort period = Did not default in 2011-2013 = Defaulted in 2011 = Defaulted in 2012 = Defaulted in 2013 All borrowers entered repayment in 2011

8. What Is a Cohort Default Period? Borrowers who entered repayment between 10/01/2010 and 9/30/2011 Borrowers who entered repayment between 10/01/2010 and 9/30/2011 and who defaulted between 10/01/2010 and 9/30/2012 2-year CDR Example FY2011 Borrowers who entered repayment between 10/01/2010 and 9/30/2011 and who defaulted between 10/01/2010 and 9/30/2013 3-year CDR Example FY2011

9. What Is a Cohort Default Rate Cycle? Department sends draft and official cohort default rates to schools –Eligible to participate in any of the Title IV programs –Borrower in repayment in the current or any of the past cohort default rate periods FebruaryAugust Draft default rates released to schools only Official rates released to schools and the general public SeptemberJanuary Draft Rate Cycle Official Rate Cycle Source: CDR Quick Reference Guide

10. What Is a Cohort Default Rate Cycle? Official cohort default rates are available at: –ed.gov/FSA/defaultmanagement/cdr.html Source: CDR Quick Reference Guide FebruaryAugust Draft default rates released to schools only Official rates released to schools and the general public SeptemberJanuary Draft Rate Cycle Official Rate Cycle

11. No Sanctions or Benefits Associated with Draft CDR Keep in mind –Schools that fail to challenge accuracy of draft rate data through incorrect data challenge can’t contest accuracy of official rate data

12. Fiscal Year (FY) Denominator # in Repayment Numerator # in Default Draft CDR Publication Date Official CDR Publication Date Rate Used for Sanctions 201010/01/09 – 09/30/103-yr: 10/01/09 – 09/30/123-yr: Feb 20133-yr: Sept 2013N/A 201110/01/10 – 09/30/11 2-yr: 10/01/10 – 09/30/12 3-yr: 10/01/10 – 09/30/13 2-yr: Feb 2013 3-yr: Feb 2014 2-yr: Sept 2013 3-yr: Sept 2014 2-yr rate (25%) 3-yr rate (30%) 201210/01/11 – 09/30/123-yr: 10/01/11 – 09/30/143-yr: Feb 20153-yr: Sept 20153-yr rate (30%) Publication of CDRs

13. How Are Schools Notified? CDR notification packages –Sent electronically to all domestic schools (eCDR) Student Aid Internet Gateway (SAIG) 5 business days to report problems Challenges, adjustments, and appeals begin 6 th day following announced transmission date –Posted on IFAP (ifap.ed.gov)

14. What is Included in the eCDR? CDR package includes –Cover letter –Two Loan Record Detail Reports (LRDR) Reader-friendly Extract-type CDR package includes –SHDRLROP –SHCDRROP –SHCDREOP –Cover letter –Loan Record Detail Reports (LRDR) Reader-friendly Extract-type

15. Decoding the Loan Record Detail Report

16. Loan Record Detail Report (LRDR) Contains borrower information for Stafford loans used to calculate draft or official cohort default rate –Includes borrower’s Name, Social Security number Date borrower entered repayment Date of default (if applicable) Loan type –Borrowers with multiple loans counted only once

17. Review LRDR Check for accuracy Compare to school records –Repayment Date –Default Status –Cancellations/Refunds

18. What is Included in the eCDR? Beginning with the FY 2009 cohort –MUST use eCDR appeals to prepare and submit challenges or adjustments

19. Reader-Friendly LRDR

20. Loan Record Detail Report – Data Manager Three-digit code used to identify entity reporting the information

22. Loan Record Detail Report – Repayment Date Indicates when borrower began repayment Determines if loan is included in denominator

24. Loan Record Detail Report – Default Date Indicates the date – Direct Loan considered in default based on past due status OR –Guarantee agency paid default claim to lender for FFELP Loan

26. Loan Record Detail Report – CDR Usage Indicates how loan is included in calculation –“D” Denominator only –“B” Both Numerator and Denominator –“N” Not Used –“E” Eligible, but not counted

28. Important Codes to Know Source: CDR Guide, page 2.3-7

29. Important Codes to Know Source: CDR Guide, page 2.3-8

30. Collecting and Comparing Data

31. Collecting the Data Determine data that needs to be captured –Last date of attendance (LDA) –Less than half-time date (LTH) –Withdrawal date (WD) –Date entered repayment (DER) –Claim paid date/default date (CPD/DD) Spreadsheet or database to collect data –Implement this process early

32. Collecting the Data –Internal resources available on-campus –External resources NSLDS Servicer reports Guaranty agencies Determine where to find data

33. Possible Errors on LRDR LRDR incorrectly: –Reports data element and data element should be changed –Includes borrower whose repayment date does not fall within cohort fiscal year; borrower removed from calculation –Excludes borrower who entered repayment within cohort; borrower added to calculation

34. Should the Loan be Included in FY09 3-year CDR? Darin Graduated from school 11/4/2008 NSLDS reveals transferred to another school 2/4/2009 LDA 11/4/2008 Date entered repay Estimated 5/5/2009 Date entered repayment Actual 5/13/2010 Default date 5/8/2011 Transferred to other school 2/4/2009

35. Should the Loan be Included in FY09 3-year CDR? No Y Defaulted between 10/1/2008 – 9/31/2011 Defaulted 5/8/2011 N FY2009 (10/1/2008 – 09/31/2009) Date Darin entered repayment 5/13/2010 If date of repayment is delayed by re-enrolling in school prior to the end of grace, inclusion in a CDR calculation is also delayed Darin

36. Should the Loan be Included in FY09 3-year CDR? Left school 11/4/2008 Transferred to another school 1/12/2010 Loans deferred 1/12/2010 LDA 11/4/2008 Date entered repayment 5/5/2009 Transferred to other school Loan deferred 1/12/2010 Kara

37. Should the Loan be Included in FY09 3-year CDR? Yes Deferments or forbearances do not alter the date the borrower entered repayment N Defaulted between 10/1/2008 - 9/31/2011 No default Y FY2009 (10/1/2008 – 09/31/2009) Date Kara entered repayment 05/05/2009 Kara

38. Should the Loan be Included in FY09 3-year CDR? Withdrew from school 6/1/2008 Defaulted on loans 5/27/2010 Consolidated three loans 12/4/2010 in order to regain Title IV eligibility LDA 6/1/2008 Date entered repayment 12/2/2008 Default date 5/27/2010 Kyle Consol date Consol date 12/4/2010 Consol enters repay Consol enters repay 2010

39. Should the Loan be Included in FY09 3-year CDR? Yes Y Defaulted between 10/1/2008 – 9/31/2011 Kyle defaulted 5/27/2010 Y FY2009 (10/1/2008 – 09/31/2009) Date Kyle entered repayment 12/02/2008 The date underlying loans entered repayment is the date used in the cohort default rate calculation Kyle

40. Should the Loan be Included in FY09 3-year CDR? Graduated from school 6/1/2008 Paid loan in full on 7/1/2008 LDA 6/1/2008 12/2/2008 Date entered repayment Loan paid in full 7/1/2008 Harrah’s Bethany

41. Should the Loan be Included in FY09 3-year CDR? No The paid-in-full date becomes the new repayment date. Same is true for loans discharged due to death, bankruptcy, disability Defaulted between 10/1/2008 – 9/31/2011 No default FY2009 (10/1/2008 – 09/31/2009) Date Bethany paid in full 07/01/2008 N N Bethany

42. Correcting Data

43. Challenges of Draft CDR –Used to correct errors on draft CDR –Submitted to guarantors (FFEL) and/or DL servicers via eCDR appeals within 45 days of timeframe begin date Relevant information for each borrower challenged Supporting documentation for each borrower challenged CEO Certification Letter Incorrect Data Challenge (IDC)

44. Challenges of Draft CDR –Only available if school potentially subject to loss of eligibility (or provisional certification) based on draft rates –Must send completed PRI Challenge to U.S. Department of Education within 45 days of timeframe begin date PRI Challenge Spreadsheet (CDR Guide page 4.2 – 8) Letter Participation Rate Index Challenge (PRI)

45. Adjustments of Official CDR –Ensures school’s official cohort default rate calculation reflects changes correctly agreed to as result of incorrect data challenge –Must submit UDA to Department within 30 calendar days of timeframe begin date via eCDR appeals Uncorrected Data Adjustment (UDA)

46. Adjustments of Official CDR –Allows school to challenge accuracy of “new data” included in most recent official CDR Compare LRDR of draft CDR to LRDR of official CDR to determine if new data reported correctly –Must submit NDA to Data Manager via eCDR appeals within 15 days of timeframe begin date Relevant information for each borrower challenged Supporting documentation for each borrower challenged CEO Certification Letter New Data Adjustment (NDA)

47. Appeals of Official CDR –Alleges school’s official cohort default rate includes defaulted loans considered improperly serviced for cohort default rate purposes – Example Borrower never made loan payment and school can document that lender/servicer failed to complete due diligence Loan Servicing Appeal (LS)

48. Appeals of Official CDR –Must send request for loan servicing records to Data Manager and Department within 15 days of timeframe begin date Loan Servicing Appeal (LS)

49. Appeals of Official CDR –Data Manager notifies school and Department within 20 days of receipt Fees for providing records List of representative sample Description of how sample was chosen –School must pay fee, if charged, within 15 days of data manager notification Loan Servicing Appeal (LS)

50. Appeals of Official CDR –Available if school is subject to loss of eligibility (or provisional certification) based on official rates –School previously challenged accuracy of data as part of Incorrect Data Challenge –Review of loan record detail reports for draft and official rates show new data Erroneous Data Appeal (ER)

51. Appeals of Official CDR –School must send Erroneous Data Appeal allegations to Data Manager within 15 days of timeframe begin date Erroneous Data Appeal spreadsheet Relevant pages of Loan Record Detail Report Supporting documentation Letter Erroneous Data Appeal (ER)

52. Appeals of Official CDR –Available based on loss of eligibility or notice of second successive official rate potentially subjecting school to provisional certification –School must submit independent auditor’s written opinion to Department within 30 days of timeframe begin date Spreadsheet of students that qualify to be included –School’s low-income rate and placement rate (non-degree-granting school) –School’s low-income rate and completion rate (degree-granting school) Economically Disadvantaged Appeal (EDA)

53. Appeals of Official CDR –Only available if school is subject to loss of eligibility or provisional certification based on official rates –Must send completed Participation Rate Index Appeal to Department within 30 days of timeframe begin date Participation Rate Index Appeal spreadsheet Letter Participation Rate Index Appeal (PRI)

54. Appeals of Official CDR –Subject to sanctions based on three consecutive CDRs that meet or exceed relevant threshold if At least two official cohort default rates are average rates CDRs would have been less than relevant threshold if calculated as non-average rates –School must send completed Average Rates Appeal to Department within 30 days of timeframe begin date Supporting documentation Certification Average Rates Appeal

55. Appeals of Official CDR –Department automatically determines if school meets criteria for thirty or fewer borrowers appeal –School disagrees with Department’s determination Must send completed Thirty or Fewer Borrowers Appeal to Department within 30 days of timeframe begin date –Supporting documentation –Certification Thirty or Fewer Borrowers Appeal

56. Common Appeal Errors to Avoid

57. Avoid Two Common Errors 1)Check NSLDS for student's enrollment status –Students who have withdrawn or dropped to less than half-time status may be taking classes that maintain their eligibility elsewhere

58. Two Common Errors 2)If two entities are listed for loan, make sure to send challenges to correct entity –Indicated with usage code of “B” rather than “E” –Sending challenge to wrong servicer or guarantor can result in missed deadline

59. Conclusion and Resources

60. Take Action Review LRDR Compare defaulted borrowers to your own system to ensure borrowers are listed correctly Submit timely appeals Analyze defaulted borrowers to see if changes are needed in default management plan

61. Resources –ifap.ed.gov/DefaultManagement/Default Management.html –ecdrappeals.ed.gov Default Prevention and Management eCDR Appeals System

62. Thank You!