Presenters: Lorri Connor and Sarah Soper

  • View

  • Download

Embed Size (px)


D EMOGRAPHIC REALITIES: How to Review Your CDR to Determine At-Risk Students and Focus Efforts for Success. Presenters: Lorri Connor and Sarah Soper. Session Highlights. CDR Overview Ramifications and Reports Institutional Application. Important Take-Aways. Timing is everything - PowerPoint PPT Presentation

Text of Presenters: Lorri Connor and Sarah Soper

Presentation Title


How to Review Your CDR to Determine At-Risk Students and Focus Efforts for Success

Presenters: Lorri Connor and Sarah SoperMASFAA 2013

October 6th 9th, 2013

Indianapolis, IndianaSession HighlightsCDR OverviewRamifications and ReportsInstitutional Application

2Important Take-AwaysTiming is everythingConsolidation versus RehabilitationUnderstanding your ReportsReporting ReviewKnow who is in your cohort

Sarah: Feel free to modify or add bullets here.3CDR OverviewWhat Is A CDR?The percentage of the schools borrowers who enter repayment on a loan during the fiscal year and default within the cohort default period.*Measures the percentage of borrowers defaulting during a specific time period.Calculated based on borrowers entering repayment, not types of loans.

*Applies to schools who have 30 or more current or former students entering repayment during the fiscal year. For schools with 29 or fewer borrowers entering repayment during a fiscal year, the CDR is an average rate based on borrowers entering repayment over a three year period.The Cohort Default Rate is a gauge of success, a way to measure the schools performance in managing its student loan program. We know that we get it from the Department of Education and if it is low, we are happy and if it is high, we get worried!

It measures the ratio of borrowers in repayment to borrowers defaulting during a specific period of time cohort years.

Can result in either benefits or sanctions for a school depending on how low or high the CDR is.Benefits can ease certain regulations on the school relating to loan processing.Sanctions can result in the school losing eligibility to give federal financial aid.

5Fiscal Year And CDRCDR is based on the federal fiscal year (FFY).The FFY begins October 1 and ends on September 30 of the following calendar year.

Cohort fiscal year refers to the fiscal year for which the CDR is calculatednot the year the rate is available or published.For example: When calculating the 2010 CDR, the cohort fiscal year was FFY2010 (October 1, 2009, to September 30, 2010).

Just explain the difference between a Federal Fiscal Year and the Cohort Fiscal Year.6How CDR Is CalculatedNumerator:Number of student loan borrowers who entered repayment during a specific FFY and defaulted within the cohort default periodDenominator:Total number of student borrowers who entered repayment during the specified FFY


Note: This formula is for schools with 30 or more student borrowers who entered repaymentPurpose of slide:Discuss how CDR is calculated.

The rate is calculated as a percent - including a numerator and a denominator. It is simple math. In the denominator, weve got borrowers entering repayment within a one year period . In the numerator are the borrowers who entered repayment AND defaulted within a two year period . So what were doing is dividing the number of borrowers who defaulted by the number of borrowers in repayment- and that gives us a decimal. When converted into a percent- we see our rate!

Discuss TruncationSomething to know or remember is that the Department of Education does not round up its decimals, but it truncates them. So, instead of getting a 12.2%, the CDR is only 12.1%. Institutions are getting a break!

Possible hidden gem:Truncation?because not rounding up may end up helping a school who is too close to the 25%

7Borrowers In The DenominatorBorrowers are included in the denominator based on their repayment start date.Repayment begins 6 months after the borrower separates from the institution, or drops below half-time.The official repayment start date is the first day after the end of the grace period.

Borrowers who use deferment or forbearance are still included in the denominator.

The key point to highlight here is that ensuring the DATE Entered Repayment is correct since borrowers are included in the denominator based on that. 8Borrowers In The NumeratorDefaulted borrowers who are included in the denominator comprise the numerator.

Direct Loan program (DL) loans enter default after 360 days of delinquency.

Federal Family Education Loan Program (FFELP) loans enter default if the guarantor has paid a default claim to the lender holding the loan.The date the guarantor pays the lender (the claim date) determines what year the loan defaults.

The key point here is that currently it takes 360 days for a student to default in the DL program. Therefore as staff is evaluating where and how to spend valuable time, the 360 days and count backwards from the Cohort year is a good place to begin. More of this in the 3-year slide coming up. 9Loans Used In CalculationParent PLUS loans

Grad PLUS loans

Federal Insured Student Loans (FISL)

Perkins loans (have a separate CDR calculation)

10Consolidation/RehabilitationIf the loan is rehabilitated after the end of the cohort default period, the borrower is still considered to be in default for the purposes of the CDR calculation.

112 vs. 3-Year CDR Monitoring2-Year3-YearWe will talk about 2 year versus 3 year and how 2 year is going away

123-Year CDR TimelinePeriod during which borrowers defaultOct. 1 2009Sept. 30 2010Sept. 30 2011Sept. 30 2012Feb. 2013 Draft 2010 CDRSept. 2013 Final 2010 CDRPeriod during which borrowers enter repayment (FY2010)Schools can access trial FY 2005, FY 2006, FY 2007, and FY 2008 CDRs and request a Loan Record Detail Report (LRDR) for each calculation through the National Student Loan Data System (NSLDS). Schools will also be able to compare these trial rates with official 2-year rates for the relevant cohort years. Trial 3-year rates (with enrollment information) have been posted on the Federal Student Aid Data Center.

Again, here if you count back 360 days from Sept. 30, 2012- about Oct 5, 2011) you know that if a student becomes delinquent and subsequently defaults after that date, the borrower could not count in the CDR. Therefore, although you can still provide support and counseling services to the students within the 360 days, the majority of the staffs effort should be directed to rehabilitating defaults, or assisting borrowers that were delinquent before Oct 5. 13Ramifications and ReportsCDR Benefits And Sanctions** Benefits and sanctions for 3-year CDR calculationThe Higher Education Opportunity Act (HEOA) amended the Higher Education Act by establishing some additional consequences that take effect with 3-year CDRs. The first time a school's 3-year CDR is equal to or greater than 30 percent, the school must establish a default prevention task force and prepare a default prevention plan. This plan must:Identify the factors causing the rate to be 30 percent or greater,Establish measurable objectives and steps to improve future rates, andSpecify actions that can be taken to improve student loan repayment, including counseling regarding loan repayment options.The school's plan must be submitted to ED for review. This could happen as early as 2012, based on the school's official FY 2009 3-year CDR.If the school's CDR remains equal to or greater than 30 percent for two consecutive fiscal years, the school's default prevention task force must review and revise the plan, and submit the revised plan to ED. ED may require the school to make further revisions to the plan and/or take actions to improve student loan repayment success. This could happen as early as 2013, based on the school's FY 2009 and 2010 3-year CDRs.15The TimelineCohort Default Rate Guide Reports

NSLDS Reports

Reports for Data AccuracyDate Entered Repayment ReportSchool Repayment Info Loan Detail School Cohort Default Rate History Enrollment Reporting SummaryReports for Default Prevention School Loan Portfolio Report Date Entered Repayment ReportBorrower Default Summary Exit Counseling ReportDelinquent Borrower ReportNSLDS Professional Access Website. Reports can be run ad hoc, or an be set up to deliver automatically to your SAIG mailbox based on your criteria.18Institutional ApplicationKeep FocusedSometimes it is useful to just keep a little motivation going. When it seems futile to even try, remember that every borrower you keep from going in to default does have an impact on your CDR. If you measure what each borrower is worth, it can help you to keep at it!20ExampleTarget CDR:4%Number of borrowers who entered repayment between October 1, 2009, and September 30, 2010:5,000Maximum number of defaults allowed:200Increase in 2010 CDR for every borrower who defaults during the cohort period:0.02%Delinquent Borrower ReportBorrower informationNameSSNDate of BirthLoan informationOriginal loan amount, type, date disbursed/guaranteedOutstanding principle balance (interest & fee balance)Scheduled monthly payment amountDays delinquent and delinquent date{Date of default (and date of default for CDR)}

Lets take a look at just one of the reports but one of the most useful if you are trying to address your CDR. You need to know who is currently delinquent in order to be able address those that are affecting your CDR.22Beyond NSLDSOnce you have identified your delinquent and/or defaulted borrowers, what can you find out about them?Attaching institutional data can help you see trends.Specific major(s), academic performance, withdraw vs. completion, online students, loan debt, etc.

What institutional processes can you set up or change to help address these areas?Think about what your data is telling you and how you might consider the process involved or intervention possibilities. For example:

Withdraw process (Is it all electronic? Do students have to talk to someone about what they owe, student loan repayment