Student Loan Default Rates
Cohort Default Rates
Definition of the two-year rate:
As defined with 34 CFR 668.181-668.198, a Cohort Default Rate (CDR) is the percentage of Stafford Loan borrowers who default before the end of the federal fiscal year following the federal fiscal year in which they entered repayment on their loans.
The U.S. Department of Education (USDE) calculates CDRs annually for each participant in the federal student loan programs, including both postsecondary schools and FFELP guarantors. The most recent year for which final CDRs have been published is 2009. Draft 2010 rates were released on February 27, 2012 via the Student Aid Internet Gateway.
Any school may challenge its rate based on data errors. The time period for challenging your draft 2010 two-year rate began March 6, 2012. All data challenges must be made through the electronic Cohort Default Rate process (eCDR process), and the eCDR Appeals application has been updated for 2010. For help with understanding the eCDR process, the USDE offers a Cohort Default Rate guide, frequently asked questions, and other helpful information. You may also call the Default Prevention and Management Hotline at (202) 377-4259 or send an email to email@example.com.
CDRs in Missouri
There are benefits to monitoring your institution's CDR. Whether your institution has a high or low rate, you have an accountability to address the reasons why loan defaults occur within the borrower population at your institution. The MDHE has resources and services to help you do just that. For free, customized training regarding calculating, monitoring, and managing your school's default rates, you may request training from the MDHE's default prevention staff.
The MDHE has offered a range of financial literacy and default prevention services for more than a decade, which has helped Missouri's CDRs stay as low as possible. The MDHE's official rate fell again from 2008 to 2009 - from 6.6 percent for 2008 to 6.3 percent for 2009 for loans guaranteed by the MDHE before July 1, 2010. This is especially significant because the national CDR rose from 7.0 percent last year to 8.8 percent for 2009.
- MDHE 2009 CDR for loans guaranteed before July 1, 2010 - 6.3 percent
- National CDR for 2009 - 8.8 percent
- Missouri CDR for 2009 - 7.6 percent
New 3-year rate
Beginning with the federal fiscal year 2009 CDR this past fall, the USDE has begun calculating a three-year CDR. The new three-year calculation for 2009 looks like this:
# borrowers who defaulted between 10/01/2008-9/30/2011
# borrowers who entered repayment between 10/01/2008-9/30/2009
On March 5, 2012, the USDE distributed draft 2009 three-year Cohort Default Rates through the Student Aid Internet Gateway. The time period for challenging the draft three-year rate began March 13, 2012. Challenges to the three-year 2009 draft rate may be made in the same method as the challenge to the 2010 draft two-year rates, through the electronic Cohort Default Rate process (eCDR process) and the eCDR Appeals application.
Per 34 CFR 668.217, if a school’s FY 2009 official three-year CDR is equal to or greater than 30 percent when the official CDR is published in September 2012, then a school will be required to establish a Default Prevention Task Force, develop a default prevention plan and submit it to the USDE.