Copyright 2008 National Student Loan Program

Three-year cohort Three-year cohort

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AgendaAgenda• What is a Cohort• What loans are included• Reauthorization• Cohort Calculation• Time Lines• What’s Next• Summary

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What is a cohort default rate?What is a cohort default rate?

• The number of borrowers who entered repayment in a FY

• Tracking borrowers entering repayment in that FY to determine if they defaulted in that FY or subsequent FY

* FY2008: Oct. 1, 2007 – Sept. 30, 2008

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What loans are included?What loans are included?• Federal Stafford

– Subsidized– Unsubsidized

• Federal SLS• Federal Direct

– Subsidized– Unsubsidized

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What loans are not included?What loans are not included?

• Federal Plus • Federal Direct PLUS• Federal Grad PLUS• Federal Direct Grad PLUS• Perkins

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Consolidation?????Consolidation?????

• Not directly included in the cohort default rate calculation

• If defaulted will be included in the numerator of the cohort default rate calculation

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Reauthorization – FY09 cohortReauthorization – FY09 cohort

• Authorized the standard from a two year measurement to a three year measurement

• Single Disbursement Rule & 30 day delay– Increased from 10 percent to 15 percent

• Default Rate Threshold– Increased from 25 percent to 30 percent

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Three-year Cohort CalculationThree-year Cohort Calculation

• The Non Average Rate formula:

# borrowers entering repay in cohort FY and defaulted in the cohort FY or the subsequent two FYs *_________________________________________________

# borrowers entered repay in the cohort FY*** Oct. 1, 2008 – Sept. 30, 2011

** Oct. 1, 2008 – Sept. 30, 2009

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What’s in the numerator?What’s in the numerator?

• All cohort loans with a default date in the three-year cohort period – counted by borrower at your school– default for FFELP is determined by default

claim payment date

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What’s in the denominator?What’s in the denominator?

• All loans entering repay in cohort year– counted by borrower– can include borrowers with loans deferred,

forborne, rehabbed, death, disability and bankruptcy

Enter Repayment

Oct. 1, 2008

Sept. 30, 2009

Mar. 2008

Leave School

Feb. 2009

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Default timelineDefault timeline

• 60 days to establish the first payment

• 270 delinquency days

• 90 days for the lender to file a default claim

• 60+ days thereafter for the guarantor to review and pay the default claim

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The clock is ticking – now!The clock is ticking – now!

• FY2009 is the first three-year cohort rate

numerator = 2009 + 2010+2011

denominator = 2009

default rate announced in 2012

• Calculated by ED based on NSLDS data

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Cohort calculation datesCohort calculation dates

• Draft – typically first week of January and released mid-February– 45 days to appeal w/ guarantor for incorrect data

• Official – typically last week of July and released mid-September– 30 days to appeal w/ ED for uncorrected data

adjustment (appealed after draft but did not get fixed in NSLDS)

– 15 days to appeal w/ guarantor for new data adjustment (appeared one way in draft but is different in final)

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What next?What next?• Expect your three-year cohort rate to be

higher• Be proactive:

– ensure accurate NSLDS data– review your cohort data for accuracy

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What next?What next?Utilize Default Prevention Tools

• Financial Literacy • DAAR • CARS• Cohort Appeal Process

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SummarySummary

• What is a Cohort• What loans are included• Reauthorization• Cohort Calculation• Time Lines• What’s Next

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Questions?Questions?

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Contact informationContact information

National Student Loan Program1300 O St.Lincoln, NE 68508 www.nslp.org

Brian Ghanoo Regional Director of BusinessDevelopmentbriang@nslp.org