managing your school's cohort default rate
Post on 16-Jan-2016
29 Views
Preview:
DESCRIPTION
TRANSCRIPT
Managing Your School's Cohort Default Rate
2
Overview
• Understanding Cohort Default Rate• Brainstorming• Getting Started• Creating a Plan• Measuring Success
3
• Measures number of borrower defaults relative to borrowers in repayment during specific periods
• Tracked and calculated by the Department of Education using the National Student Loan Data System (NSLDS) and the Loan Record Detail Report (LRDR)
%%Cohort Cohort Default Default
RateRate
Understanding CDR
NumeratorNumerator(Borrowers in default)
DenominatorDenominator(Borrowers in repayment)
==
4
Understanding 3-Year CDR
Cohort Fiscal Year Borrower Entered Repayment 3-Year Cohort Default Period Cohort Default Rate Calculation Date
2009 10/01/2008 – 09/30/2009 10/01/2008 – 09/30/2011Draft: February 2012
Official: September 2012
2010 10/01/2009 – 09/30/2010 10/01/2009 – 09/30/2012Draft: February 2013
Official: September 2013
2011 10/01/2010 – 09/30/2011 10/01/2010 – 09/30/2013Draft: February 2014
Official: September 2014*
2012 10/01/2011 – 09/30/2012 10/01/2011 – 09/30/2014Draft: February 2015
Official: September 2015
2013 10/01/2012 – 09/30/2013 10/01/2012 – 09/30/2015Draft: February 2016
Official: September 2016
2014 10/01/2013 – 09/30/2014 10/01/2013 – 09/30/2016Draft: February 2017
Official: September 2017
2015 10/01/2014 – 09/30/2015 10/01/2014 – 09/30/2017Draft: February 2018
Official: September 2018
2016 10/01/2015 – 09/30/2016 10/01/2015 – 09/30/2018Draft: February 2019
Official: September 2019
2017 10/01/2016 – 09/30/2017 10/01/2016 – 09/30/2019Draft: February 2020
Official: September 2020
*First application of sanctions for 3-Year Cohort Default Rates.
5
Impact – Consequences*
• Most recent 3-year CDR above 30% - Create a default prevention taskforce and plan.
• Two of three most recent 3-year CDRs 30% - Obtain provisional certification. If consecutive years, revise default prevention plan.
• Three consecutive 3-year rates above 30%– Lose Pell Grant and Direct Loan eligibility.
• Most recent 3-year CDR above 40% - Lose Direct Loan eligibility only.
* Consequences of high 3-year CDRs will take effect beginning in September 2014, based on 3-year official CDRs for FY 2009 – FY 2011. Until then, consequences are based on 2-year official CDRs.
6
Impact - Benefits
• Three most recent CDRs are below 15% - Exemption from the 30-day delayed disbursement rule for first-year, first-time Stafford loan borrowers and from the multiple disbursement rule for Stafford and PLUS loan borrowers (for a loan period no longer than one standard term or four months.)
• Most recent CDR is less than 5% - Exemption from both rules for borrowers using the loan to cover a study-abroad cost of attendance.
7
Brainstorming
You have been asked to create a simple, effective default prevention plan for your school, Sample State College.You should know:
» Your approximate enrollment is 15,000 students, 45% of which receive federal aid.
» Your student body is made up of commuters, non-commuters and online students.
» Over the past four years, your CDR has increased steadily by 2% and your estimated 3-year rate is 18%.
» Your plan should contain strategies for students who are:• In School• In Grace/Repayment• Delinquent
8
How Do I Get Started?
• Set a target default rate for your institution.» Identify the maximum number of defaults to meet your target.» Project your rates throughout the year by monitoring current
defaulted borrowers and borrowers over 300 days delinquent.
• Review prior defaulters at your school to identify common characteristics.
» Withdrawn students» Transfer students» Participants in particular programs of study» SAP students» Students who borrowed above the cost of attendance
9
Developing Messages
In School
Their total loan debt and available
resources
Repayment
Their servicer contact information and payment options
Delinquent
The consequences of default and their
resources
What should your students know?What should your students know?
10
Creating a Plan
• In-school» Meet with “high-risk” students, based on your research» Encourage small, manageable payments while in school
• Grace» Email students» Calls to “high-risk” students
• Repayment» Letters/emails to early stage delinquent students» Calls to late stage delinquent students» Calls to students ending a deferment/forbearance
11
In School - Campus Involvement
• Your administration and faculty could be impacted by your school’s high CDR. Make them part of the solution!
• Consider including:» Admissions» Resident Life» Commuter Services» Greek Life» Academic Clubs» Career Counseling» Faculty
12
Creating a Plan
• In-school» Meet with “high-risk” students, based on your research» Encourage small, manageable payments while in school
• Grace» Email students» Calls to “high-risk” students
• Repayment» Letters/emails to early stage delinquent students» Calls to late stage delinquent students» Calls to students ending a deferment/forbearance
13
Entering Grace - Before You Go
14
Creating a Plan
• In-school» Meet with “high-risk” students, based on your research» Encourage small, manageable payments while in school
• Grace» Email students» Calls to “high-risk” students
• Repayment» Letters/emails to early stage delinquent students» Calls to late stage delinquent students» Calls to students ending a deferment/forbearance
15
Delinquent - NSLDS Resources
16
Measure Success
• Categorize your efforts, track your success, and make adjustments.
Late-Stage Delinquency Students - Total Students (100)
Sample Size
EffortResponded
to effortResolved delinquency
through paymentResolved delinquency through
other means
50 Email 15 (30%) 7 (47%) 8 (53%)
50 Phone Call 30 (60%) 10 (33%) 20 (67%)
High-Risk Students - Total Students (90)
Sample Size
Risk FactorMade in-school
paymentEnrolled in automatic
paymentsNon-delinquent
50 Transfer 5 (10%) 15 (30%) 45 (90%)
40 SAP 2 (5%) 15 (38%) 30 (75%)
Questions? Comments?
top related