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Default Prevention and Management
Frequently Asked Questions


Note: In the following FAQs, "the Department" refers to the U.S. Department of Education, "FFEL" refers to Federal Family Education Loan, and "FDSLP" or "Direct Loan" refers to William D. Ford Federal Direct Loan. "NSLDS" refers to National Student Loan Data System.


Q. What is repayment information and what are the benefits of reviewing this information?

A. Repayment information is a default management report provided to schools by the Department through NSLDS. This report (DRC015) provides, on a monthly basis, school-specific repayment information regarding students who have obtained FFEL and Direct Loans to attend school and have entered into repayment on those loans in the first 12 months of the most recent 24-month period.

All schools that participate in any of the Title IV Federal Student Aid (FSA) programs and have students who meet the above criteria may access the repayment information. This information does not represent a school's cohort default rate; rather it is provided solely as a service to help schools track loans and correct errors associated with loans that recently entered into repayment. By monitoring when borrowers enter repayment, a school can make students aware of all the repayment options available to them to help a borrower avoid default. Schools can also use the repayment information to ensure the data reported to NSLDS is accurate. If errors in data are found, schools can contact their data manager immediately instead of waiting until the release of the draft cohort default rates to correct inaccuracies.


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Q. What is a cohort default rate (CDR)?

A. For schools having 30 or more borrowers entering repayment in a fiscal year, the school's cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loans (FFELs) and/or William D. Ford Federal Direct Loans (Direct Loans) during that fiscal year and default (or meet other specified conditions) before the end of the following fiscal year. For schools with fewer than 30 borrowers entering repayment during a fiscal year, the cohort default rate calculation includes student borrowers who entered repayment in that fiscal year and the two previous fiscal years and defaulted before the end of the following fiscal year.


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Q. Why are cohort default rates important?

A. Defaulted federal student loans cost taxpayers money. By calculating cohort default rates, sanctioning schools with higher rates, and providing benefits to schools with lower rates, the US Department of Education (the Department) creates an incentive for schools to work with borrowers to reduce defaults. As a result, cohort default rates help save taxpayers money.


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Q. Which types of loans are included in the cohort default rate calculation?

A. The Federal Family Education Loans (FFELs) included in the cohort default rate calculation are
  • Subsidized FFEL and Unsubsidized FFEL (collectively referred to as FFEL) and


  • Federal Supplemental Loans for Students (Federal SLS loans).

Federal SLS loans have not been made since July 1, 1994. However, it is possible for a Federal SLS loan to be included in a current cohort default rate calculation under certain circumstances.

The Direct Loans included in the cohort default rate calculation are

  • Federal Direct Subsidized William D. Ford Loans and Federal Direct Unsubsidized William D. Ford Loans (collectively referred to as Direct Loans).

Federal Consolidation Loans and Federal Direct Consolidation Loans are not directly included in the cohort default rate calculation. However, the status of a consolidation loan may affect the cohort default rate calculation.


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Q. When are cohort default rates released?

A. The Department releases cohort default rates twice each year. Generally, the Department releases draft cohort default rates in January or February. After schools receive their draft cohort default rate data, schools are provided an opportunity to identify and correct any inaccuracies by submitting an incorrect data challenge. The Department then releases the official cohort default rates. Official cohort default rates are generally released to schools and the public approximately six months after the release of the draft cohort default rates. However, the official cohort default rate must be released no later than September 30th of each year.


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Q. Who receives cohort default rates?

A. The Department provides draft cohort default rates only to schools and does not release them to the public. The Department sends draft cohort default rates to all schools that the Department's records indicate:
  • are eligible to participate in any of the Title IV programs and
  • have borrowers that entered repayment on FFELs or Direct Loans during the current or any prior cohort fiscal years.

The Department provides official cohort default rates to schools and also makes them available to the public. The Department releases official cohort default rates for all schools that the Department's records indicate:

  • are eligible to participate in any of the Title IV programs and
  • have borrowers that entered repayment on FFELs or Direct Loans during the current or any prior cohort fiscal years.

A school may download an electronic copy of its Loan Record Detail Report (LRDR) for the draft cohort default rate or official cohort default rate periods. The public can also download a listing of all of the official cohort default rates in the form of a press package, PEPS300 Report. This press package also contains a listing of those schools that are subject to sanctions, PEPS304 and PEPS305, as a result of high official cohort default rates.

Note: If your school did not receive any data on the LRDR pages (just a heading), it means that your school did not have any students in default or repayment for the FY 03, FY 02 or FY 01 cohort periods; however, your school did have at least one borrower in repayment in any of the past cohort periods.




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Q. How does a school's change in status affect the school's cohort default rate?

A. A school involved in a merger, acquisition or other change in status should be aware that the change may affect the application and calculation of its cohort default rates and that certain sanctions may be applicable to the school after the change in status. After a change in status, cohort default rates are applied to a school according to the type of change in status. See Figure 2.5.1 in the Guide, "Change in Status and Evasion." Also refer to the Federal Register, Vol. 65, No. 212, November 1, 2000, CFR 668.184, "Determining cohort default rates for institutions that have undergone a change in status."
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Q. What does a school interested in changing its status need to do?

A. All schools contemplating a change in status may submit a letter to Default Prevention and Management before making the change as different cohort default rates may be applied to a school as a result of a change in status. The letter should include the details of the change in status (for example, if the school shall be part of a teach-out), and request guidance regarding the consequences, if any, the change in status shall have on the school's eligibility. The school should send a copy of the letter to your School Participation Team. See Chapter 2.4, figure 2.4.1 of the Guide, "Department Offices and Addresses," for School Participation Team addresses.

Default Prevention and Management shall send a written response indicating how the historical, current, and future cohort default rates shall be calculated based on the proposed change in status. Schools can use this response to evaluate whether the change in status shall be beneficial or detrimental to the schools involved in the change.


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Q. Can my school's draft cohort default rates differ from my school's official cohort default rates?

A. Yes, the draft and official cohort default rates may differ if the data used to calculate the official cohort default rates in NSLDS changed between the time that the draft and the official cohort default rates were calculated. New data is continually coming into NSLDS from lenders and data managers.


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Q. Where can I find information on the national cohort default rate and other statistics on cohort default rates?

A. You can find this information on this website! Go to http://www.ed.gov/offices/OSFAP/defaultmanagement/defaultrates.html .


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Q. Can I get an extension on my challenge, adjustment, and/or appeal timeframe?

A. No, timeframes are mandated by regulation; therefore no extensions are granted. No exceptions are made.


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Q. Help! I didn't get my cohort default rate package. What should I do?

A. First of all, don't panic. Your school will not receive a cohort default rate (CDR) notification package if your school has NOT enrolled in eCDR, or if your school has never had a borrower enter into repayment in the FFEL or Direct Loan programs. If neither of the above applies, then your school should have received a CDR notification package.

  • All foreign school CDR packages are sent to the President/CEO/Chancellor of the school. The CDR packages mailed to foreign schools takes about 7-10 days to arrive.


  • For domestic schools, the packages are sent electronically to the specified destination point administrator (DPA) via the Student Aid Internet Gateway (SAIG), so contact your school's DPA. If you are unsuccessful in determining the DPA, contact the SAIG helpdesk at 1-800-330-5947.


  • If you have not signed up for eCDR, you need to do so immediately as the Secretary gave notice through publication in the Federal Register dated 2/23/03. (See http://ifap.ed.gov/fregisters/FR02252003.html). All schools subject to receiving default rate notification were to have enrolled in eCDR by June 1, 2003. If your school does not have a DPA for eCDR you should enroll through the SAIG website at http://www.fsawebenroll.ed.gov. For assistance with enrollment or with SAIG or EDConnect technical difficulties, please call CPS technical support at 800-330-5947. If you have further questions, please contact Default Prevention and Management by phone at 202-377-4258 or by email to FSA.schools.defaultmanagement@ed.gov.


While you are waiting to get in touch with your school's DPA, or if your school is not enrolled in eCDR, you can obtain your CDR and Loan Record Detail Report (LRDR) via NSLDS (https://www.nsldsfap.ed.gov).

Note: Foreign schools will continue to receive a hard copy of their cohort default rate notification data.


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Q. How does a school download and review the eCDR notification package?

A. Instructions for downloading and reviewing the eCDR notification package can be found at http://www.ifap.ed.gov/eannouncements/0224eCDR6SixthBroadcast.html. If you need additional help, you can contact the SAIG helpdesk at (800) 330-5947.


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Q. My school’s default rate is low. Why should I devote valuable resources to ensure data accuracy and default prevention?

A. Even if your cohort default rate is low, the number of borrowers in default and/or the dollars in default may be significant. This costs the schools, taxpayers, and the borrowers themselves in the long run. Also, your school’s draft and official cohort default rates may be inaccurate due to errors in the underlying data, and the Department may make decisions based on that data. In addition, schools are required to provide accurate data to ED via NSLDS Enrollment Reporting.

There are proactive steps schools can take that may require a minimal investment in time, staff, and money, and can result in higher graduation rates and a lower number of defaults. We now have effective delinquency and default aversion strategies available to all schools.


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Q. Should all schools implement a default prevention and management plan?

A. The Department strongly recommends all schools implement a Default Prevention and Management (DPM) Plan.  To facilitate that implementation the Secretary of Education (Secretary) has provided a sample DPM plan at http://www.ifap.ed.gov/dpcletters/attachments/GEN0514Attach.pdf. Additionally, schools applying for Title IV programs for the first time and schools who have undergone a change in ownership that resulted in a change in control are required by regulation (34 CFR 668.15) to implement a DPM Plan. Those schools may either adopt the Secretary’s sample plan or create their own unique DPM Plan, which is reviewed and approved by the DPM office.  Default Prevention and Management staff are available to assist schools in developing a default prevention plan, and they may be reached by phoning (202) 377-4258


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Q. What default prevention techniques are available for schools?

A. The Department’s Sample Default Prevention and Management Plan offers many effective default prevention tools and strategies schools will find effective. Department staff are available to work with schools to develop and improve activities such as Entrance and Exit Counseling, financial literacy for borrowers, counseling at-risk students, retention, and timely and accurate enrollment reporting. Guarantors and the Direct Loan Servicer also provide default prevention assistance to schools.
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Q. Who can I contact for help with a default management plan, default prevention or technical assistance?

A. You can call Default Prevention and Management's main telephone number at 202-377-4258. A member of the Default Prevention Team will provide guidance on creating a default management plan, share successful default prevention techniques, and provide technical assistance.

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Q. What default prevention techniques are available for schools?

A. The Department’s Sample Default Prevention and Management Plan offers many effective default prevention tools and strategies schools will find effective. Department staff are available to work with schools to develop and improve activities such as Entrance and Exit Counseling, financial literacy for borrowers, counseling at-risk students, retention, and timely and accurate enrollment reporting. Guarantors and the Direct Loan Servicer also provide default prevention assistance to schools.


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Q. What default prevention techniques are available after borrowers leave school?

A. Schools should maintain contact with their former students and assist them after they have left school. Allowing borrowers to keep school email accounts is an effective technique for staying in touch. Several NSLDS reports that are available to schools provide information on repayment status. Guarantors and Direct Loan Servicers also assist schools with monitoring loan repayment delinquencies.


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Q. What is late stage delinquency assistance (LSDA)?

A. Late Stage Delinquency Assistance (LSDA) is available for both Direct Lending and FFEL Program schools. LSDA focuses on students who are more than 240 days delinquent in their loan repayment obligation. With LSDA, we ask schools to act as liaison between borrowers and loan servicers. Once the connection is made, there is help available to prevent the loan from entering default. Employing LSDA at your school will require minimal time and staff, reduce your school’s cohort default rate and save your former students from the unpleasant consequences of default. It is a win-win opportunity.


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Q. I am brand new to the cohort default rate arena, where do I begin?

A. The Cohort Default Rate Guide (Guide), which is a link on the Default Prevention and Management webpage, is a comprehensive reference tool. Click on the Guide (http://ifap.ed.gov/DefaultManagement/DefaultManagement.html) page 1.1-3 and go to Page 1.1-4, figure 1.1.1 to determine how to best use the Guide based on different situations or level of knowledge and experience with the cohort default rates.

On the Guide homepage, there is a link to condensed version of the Guide known as the Cohort Default Rate Guide Quick Reference. The Quick Reference presents some of the key elements of the Guide in a more informal manner. It provides a quick summary of what you should do during the draft and official cohort default rate cycles.

The FSA Assessments Default Management module is designed to assist schools in managing cohort default rates and to help prevent students from defaulting on Federal students loans. This is done through a series of statements, questions and links to additional resources. The FSA Assessments Default Management module is located at http://ifap.ed.gov/IFAPWebApp/qualityassurance/SFAAssessment.jsp.

Default Prevention and Management can provide help or direction on a full range of default prevention and management questions and services. Please call 202-377-4258 or send an email to FSA.schools.defaultmanagement@ed.gov.


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Q. Why is a borrower listed twice in my cohort default rate?

A. All of a borrower's loans that entered into repayment within a cohort fiscal year are listed on a school's Loan Record Detail Report (LRDR) for that cohort period. The data on a school's LRDR is obtained from NSLDS and is used to calculate a school's cohort default rate. Although one of your borrower's may have more than one loan listed on your LRDR, because several of the borrowers loans entered into repayment in the same cohort period, the borrower (per social security number) is only counted once in the calculation. The loan that is counted in the calculation will have the letter "D" (denominator) or "B" (both numerator and denominator) listed on the LRDR under the column title "usage 1 code." All other loans for that student were eligible to be counted but were not. They will be listed on the LRDR and the letter "E" (eligible but not counted in the calculation) noted in the "usage 1 code" column. Please see Chapter 2.3 in the Cohort Default Rate Guide for illustrations of how to read the LRDR.

Note: One exception to this might be that a borrower may be counted twice if the borrower took out loans at two different schools and subsequently these two schools merge. 


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Q. How can my school withdraw or reapply for participation in the Title IV programs?

A. Go to http://www.eligcert.ed.gov for information. You may also contact the Case Team at 202-377-3173. Please know that there are specific guidelines and requirements for schools that wish to withdraw or reapply for participation in the Title IV programs."

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Q. How can my school withdraw or reapply for participation in the Title IV programs?

A. Go to http://www.eligcert.ed.govfor information. You may also contact the School Participation Team at 202-377-3173. Please know that there are specific guidelines and requirements for schools that wish to withdraw or reapply for participation in the Title IV programs."


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Q. Tell me about the new benefit reinstated due to the Higher Education Reconciliation Act (HERA) of 2005

A. The HERA reinstated the following benefit to schools with low cohort default rates.
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Q. I am a domestic school and I didn’t get my eCDR. Now what?

A. Have you signed up for the eCDR process? If you have and you do not know your SAIG account number and/or the person who is assigned to that number, you may call the Default Prevention and Management to get that information at 202-377-4259. If you have any other technical questions about your SAIG account, you will need to call the SAIG helpdesk at 800-330-5947. If you have not signed up for the eCDR process, the only way to get your default rates is by getting the rate off of your Loan Record Detail Report via the National Student Loan Data System (NSLDS) at http://www.nsldsfap.ed.gov.


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Q. How do foreign schools receive their default rates?

A. For the first time in the FY 2005 draft cycle, foreign schools began to receive their default rates with an encrypted cd-ROM that contained their Loan Record Detail Report (LRDR) in the report format. Immediately following the notification letter and cd-ROM, foreign schools received another letter that contained a password needed to decrypt and open the cd-ROM. These PDF files were encrypted with Adobe version 7 encryption, so some older versions of the reader may have problems decrypting the file. If you have an older version of the Adobe Reader, please upgrade to version 7 or newer to enable viewing of these documents. The current version, Adobe Reader 8, can be downloaded from the Adobe website at www.adobe.com/products/acrobat/readstep2.html.


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Q. Can foreign schools sign up to get their cohort default rates from an SAIG account electronically?

A. The Foreign School team has begun working to get groups of foreign schools signed up for the electronic cohort default rate process. If you have been contacted by the Foreign School team and have any questions regarding this process, please contact Valerie.Hough@ed.gov


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Q. I received my draft cohort default rates last February. Since there were no sanctions or benefits associated with those rates, did I need to review them? If so, why?

A. The purpose of the release of the draft cohort default rates is so schools can review the data and notify the guaranty agencies if there is any erroneous data on the Loan Record Detail Report (LRDR). You should compare the data on your LRDR to the data you have in your files for each student listed. If any students do not belong in the cohort period or have not defaulted during that cohort period, then you notify the guaranty agencies (GA). If they agree with your findings, the GA will make the appropriate corrections to the data and when the official rate is calculated in the fall, the data will have been corrected. If you do not challenge the incorrect data (Incorrect Data Challenge), you may not be able to do so when the official rates are released.

Plus, even if your cohort default rates are low, the number of borrowers in default and/or the dollars in default may be significant. This costs the schools, taxpayers, and the borrowers themselves in the long run. Also, your school’s official cohort default rates may be inaccurate due to errors in underlying data, and the Department may make decisions based on that data. Schools are required to provide accurate data to ED via NSLDS Enrollment Reporting.


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Q. Are there templates/spreadsheets for me to use in organizing my challenges/appeals?

A. Yes, all the templates/spreadsheet you need to do challenges/appeals are on the Guide homepage at http://ifap.ed.gov/DefaultManagement/finalcdrg.html. These forms should facilitate the process for you.


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Q. What is eCDR Appeals?

A. eCDR Appeals is the vehicle for schools to electronically submit certain challenges, adjustments, and appeals of cohort default rate data to the Department of Education and/or to the relevant guaranty agency and/or Direct Loan Servicer. eCDR Appeals is a single web-based user interface for all users. This process applies to the Federal Family Education Loan and Direct Loan Programs only.


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Q. Where can I find more information on eCDR Appeals?

A. Links to the User Guides for eCDR Appeals, as well as a direct link to the system, are available at https://ecdrappeals.ed.gov/ecdra/index.html. Additionally, schools should check the Information for Financial Aid Professionals (IFAP) website for any updated information on eCDR Appeals.


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