Many schools have seen their cohort default rates rise with the extension of the default monitoring period from two years to three years, and this trend has continued with the recently-released FY 2010 3-Year cohort default rates. Institutions with rates of 30% or more for three consecutive years are required to take specific corrective action to manage and prevent future defaults, and ultimately may lose their eligibility to participate in the Title IV programs should these efforts fail. This instructor-led, online training will discuss what schools need to know about the cohort default rate process and default management.
This session is intended for financial aid professionals interested in and concerned with all aspects of default management and will be presented on December 10th at 4:00 P.M. (ET), and again on December 12th at 12:00P.M. (ET).
Know Your Eligibility Status:
- Schools that have FY 2011, FY 2010, and FY 2009 2-year cohort default rates less than 15.0%, including eligible foreign institutions, and that disburse in a single installment loans that are made for one semester, one trimester, one quarter, or a four-month period. These institutions are no longer required to delay the delivery or disbursement of loans for 30 days for first-time, first-year undergraduate borrowers.
- Schools with a FY 2010 official 3-year cohort default rate that is equal to or greater than 30 percent. These schools must establish a default prevention task force that prepares a plan to identify the factors causing cohort default rate to exceed 30 percent and submit to the Department for review.
- Loss Due To Three Years of 25 Percent or Greater – A school subject to loss of eligibility to participate in the FSA Programs has FY 2011, FY 2010, and FY 2009 2-Year official cohort default rates that are 25.0% or greater. If a school fails to successfully appeal this sanction, it will lose eligibility to participate in the FFEL, Direct Loan, and/or Federal Pell Grant Program until September 30, 2014.
- Loss Due to One Year of Greater than 40 Percent – A school is subject to loss of eligibility to participate in the Direct Loan Program if the school’s FY 2011 2-Year official cohort default rate is greater than 40.0%. If a school fails to successfully appeal this sanction, it will lose eligibility to participate in the Direct Loan Program until September 30, 2015.
To find your school’s current cohort default rates and eligibility status for both the 2-year and 3-year rates and to access a copy of the Cohort Default Rate Guide go to
http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr2yr.html.
You may search this database by OPEID, school name, city/state, institution type, or eligibility status.
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