1. DEMOGRAPHIC REALITIES: How to Review Your CDR to Determine At-Risk Students and Focus Efforts for Success DEMOGRAPHIC REALITIES: How to Review Your CDR to Determine At-Risk Students and Focus Efforts for Success Presented by: Lorri Connor, Campus Engagement and Education Consultant Date: 05/19/14

2. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 2 CDR Overview Ramifications and Reports Institutional Application Session Highlights

3. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 3 Important Take-Aways Timing is everything Consolidation versus Rehabilitation Understanding your Reports Reporting Review Know who is in your cohort

4. CDR Overview

5. What Is A CDR? The percentage of the school’s 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.

6. Fiscal Year And CDR CDR 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 calculated—not 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).

7. How CDR Is Calculated Numerator: Number of student loan borrowers who entered repayment during a specific FFY and defaulted within the cohort default period ÷ Denominator: Total number of student borrowers who entered repayment during the specified FFY ×100 Note: This formula is for schools with 30 or more student borrowers who entered repayment

8. Borrowers In The Denominator Borrowers 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.

9. Borrowers In The Numerator Defaulted 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.

10. Included in CDR Subsidized & Unsubsidized Stafford loans (Direct & FFEL) Federal Supplemental Loans for Students (SLS) Not Included in CDR Parent PLUS loans Grad PLUS loans Federal Insured Student Loans (FISL) Perkins loans Loans Used In Calculation

11. Consolidation/Rehabilitation Consolidation loans are not directly included in the CDR calculation – but eligible underlying loans are. May cause a borrower to be included in the numerator of the CDR calculation if the consolidation loan defaults within the cohort default period that is applicable to the underlying loan(s). Consolidation Impact Once a borrower makes the required payments, the loan is rehabilitated and no longer in default. If the loan is rehabilitated before the end of the cohort default period, the borrower is not included in the numerator. Rehabilitation Impact

12. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 12 2 vs. 3-Year CDR Monitoring Cohort Year October 1 – September 30 Subsequent FFY October 1 – September 30 Cohort Year October 1 – September 30 Subsequent FFY October 1 – September 30 3 rd FFY October 1 – September 30 2-Year 3-Year

13. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 13 3-Year CDR Timeline Period during which borrowers default Oct. 1 2009Sept. 30 2010Sept. 30 2011Sept. 30 2012 Feb. 2013 – Draft 2010 CDR Sept. 2013 – Final 2010 CDR Period during which borrowers enter repayment (FY2010)

14. Ramifications and Reports

15. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 15 CDR Benefits And Sanctions* Benefits If CDR is 5% or less: Institution is eligible to make single and non-delayed disbursements on loans used for attendance in a study abroad program. If CDR is 15% or less for the 3 most recent cohort years: Institutions can disburse single term loans in one disbursement and deliver first disbursements for first-year undergraduate borrowers without a delay. Sanctions If CDR is 30% or higher for 3 consecutive years: First year: Must form a default prevention task force and submit default prevention plan to Department of Education (ED). Second consecutive year: Must revise default prevention plan and re-submit to ED. Third consecutive year: Institution loses eligibility for federal student loans and Pell grants. * Benefits and sanctions for 3-year CDR calculation

16. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 16 The Timeline February: Draft cohort default rates are sent to institutions. February to April: Institutions have 45 days to challenge draft data September: Official cohort default rates are made public and appeal/adjustment period begins Cohort Default Rate Guide http://www.ifap.ed.gov/DefaultManagement/CDRGuideMaster.html

17. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 17 NSLDS Reports

18. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 18 NSLDS Reports Reports for Data Accuracy –Date Entered Repayment Report –School Repayment Info Loan Detail –School Cohort Default Rate History –Enrollment Reporting Summary Reports for Default Prevention –School Loan Portfolio Report –Date Entered Repayment Report –Borrower Default Summary –Exit Counseling Report –Delinquent Borrower Report

19. Institutional Application

20. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 20 Keep Focused Determine your school’s target CDR Determine the maximum number of defaults that can be allowed to maintain that rate Work borrowers who can impact your CDR: delinquent and rehab

21. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 21 Example Target CDR:4% Number of borrowers who entered repayment between October 1, 2009, and September 30, 2010: 5,000 Maximum number of defaults allowed:200 Increase in 2010 CDR for every borrower who defaults during the cohort period: 0.02%

22. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 22 Delinquent Borrower Report -Borrower information -Name -SSN -Date of Birth -Loan information -Original loan amount, type, date disbursed/guaranteed -Outstanding principle balance (interest & fee balance) -Scheduled monthly payment amount -Days delinquent and delinquent date -{Date of default (and date of default for CDR)}

23. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 23 Beyond NSLDS Once 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?

24. SALT CREATED BY AMERICAN STUDENT ASSISTANCE 24 Tips For Reports Run reports: set regular monthly dates and work the reports Identify current cohort borrowers Identify current cohort delinquent borrowers Identify critical delinquency borrowers Any borrower that becomes delinquent before the last 360 days of the cohort year Focus efforts on these critical borrowers Counsel about different repayment options Help borrower go through loan rehabilitation process

25. Questions?

26. Contact Name: Lorri Connor Title: Campus Engagement and Education Consultant Phone: 617.521.6220 Email: lconnor@asa.org