Cohort Default Rates & Eligibility

By Rick Cox

Institutions with Cohort Default Rates over 40 percent will lose eligibility for Direct Loans for the remainder of the year in which the institution is notified of the sanction, plus the next two fiscal years.

If your institution has a CDR equal to or greater than 30 percent for the three most recent years, you will lose eligibility for DL and Pell for the remainder of the year in which the institution is notified, plus the next  two fiscal years.

If your CDR is 30 percent or more, the institution is required to submit a default management plan.

A Loan Record Detail Report, or LRDR, is available through NSLDS. This report will assist colleges with managing default rates. It provides all the data on your borrowers’ loans, including default date, and how they will be used in the CDR (numerator/denominator).

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance