February 21, 2008

Cohort Default Rates

On February 11, 2008, the Department of Education (ED) released FY 2006 Draft Cohort Default Rates to all eligible schools for informational purposes. The cohort default rate is defined as the percentage of a school's borrowers who enter repayment on Federal Stafford, Federal SLS, or Direct Stafford loans during a particular federal fiscal year and default or meet other specified conditions prior to the end of the next fiscal year.

Appeals process
This year, for the first time, schools will be able to process and submit certain cohort default rate challenge and adjustment requests electronically using the Web-based application, electronic Cohort Default Rate Appeals process (eCDR Appeals). Additional information about eCDR can be found in ED's January 24, 2008 Electronic Announcement and the eCDR Appeals Incorrect Data Challenge (IDC) User Guide.

Potential change in formula
As mentioned in OGSLP's January 31, 2008 Legislative Update and February 15, 2008 Legislative Update, the current formula used for calculating the cohort default rate may change depending on the outcome of an amendment to the House version of the Higher Education Act (HEA) reauthorization legislation. Among other changes, the amendment proposes to extend the length of the cohort default rate calculation from the current two-year period to a three-year period, beginning with the FFY 2008 rates and includes modifications to certain sanction and benefit thresholds associated with a school's cohort rate performance. For more information about this amendment and the status, please read the HEA Reauthorization Update article in this edition.

OGSLP's Default Prevention School Tool (DPST)
OGSLP offers the perfect solution for schools to maximize their resources to combat student loan delinquencies: the Default Prevention School Tool (DPST). Turning the existing OGSLP Delinquent Borrower by School report into an interactive application, DPST is a versatile tool for schools to track and manage their OGSLP cohort default rate performance. Customers can access reports, use pre-formatted letters, and utilize a comprehensive database and search feature to help manage their OGSLP cohort default rate. DPST is an easy-to-use database offering current borrower cohort information and providing special support to schools as they focus on students who are at risk for delinquency or default. For questions or to request a DPST demonstration, please contact Wayne Sparks, OGSLP's Default Prevention Manager, at 405.358.5460 or 800.247.0420. OGSLP's Default Prevention team is trained and readily available to help schools reach their default prevention goals.