Cohort Default Rates: Change is in the Air
2012 promises to be a busy year in the cohort default rate (CDR) arena. For the first time this year, the U.S. Department of Education (ED) will calculate and release an official three-year CDR. Please check ifap.ed.gov often for updates and information on the three-year CDR. Schools will now have the opportunity to challenge the data for both two-year and three-year CDRs. Be sure to read below for updates about how CDRs are calculated (from two-year to three-year CDRs) and eCDR Appeals.
Change from Two-Year CDR to Three-Year CDR
Beginning with the fiscal year (FY) 2009 cohort, an institution’s CDR is calculated as the percentage of the borrowers in the cohort who default before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment. This represents a one year extension of the default monitoring period. The FY 2009 cohort (borrowers who entered repayment between October 1, 2008 and September 30, 2009) is the first CDR calculation using the new standard. Thus, an institution’s FY 2009 three-year CDR will be the percentage of its borrowers who were included in the 2009 cohort who subsequently defaulted on or before September 30, 2011. The FY 2009 Draft three-year rates will be provided to institutions in February of 2012 with official rates released in September of 2012.
ED will continue to calculate and publish official two-year CDRs until three sets of three-year rates are published. The last of these two-year rates will be for the FY 2011 cohort and will be released in 2013. Beginning in 2014, only three-year rates will be published, since at that time three years of three-year rates would have been calculated (FY 2009 published in 2012, FY 2010 published in 2013, and FY 2011 published in 2014).
| Published | Two-Year Cohort | Three-Year Cohort |
|---|---|---|
2011 |
2009 |
|
2012 |
2010 |
2009 |
2013 |
2011 |
2010 |
2014 |
n/a |
2011 |
The reporting of the new three-year CDR will begin in FY 2012 (for borrowers entering repayment in FY 2009), but sanctions will not be applied based on the three-year CDR until three consecutive years of three-year CDR data are available, meaning that there will be no sanctions based on the three-year CDR until the release of the FY 2011 CDR in 2014. Additionally, beginning in 2012, schools will be able to appeal two-year CDR data and three-year CDR data.
The Cohort Default Rate Guide (CDR Guide)
The CDR Guide is a great resource to use when looking for answers to your CDR questions. The CDR Guide is web based and can only be accessed via the Operations Performance Division (OPD) website. OPD updated the CDR Guide in November 2011. If you are looking for information on the CDR process for schools, please take some time and review the information in the CDR Guide.
Please note that the IDC User Guide complements the CDR Guide. In the event of any discrepancy between the two, the CDR Guide is the authoritative source for regulatory considerations and constraints.
From: February 2012 Newsletter, FY 2010 and FY 2009 Three-Year Draft Cohort Default Rates, from Operations Performance Division, Business Operations