Decoding CDR Reports and Correcting Data
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Transcript of Decoding CDR Reports and Correcting Data
Why Review Your CDR Data
– High CDR could result in • Adverse publicity• Loss of Title IV eligibility• Loss of access to private loan funds• Extra work
Administrative capability
Why Review Your CDR Data
– Correct data– Accurate data– Timely data
Administrative capability
Better-quality decision-making
Why Review Your CDR Data
– When borrowers default• Pay more in interest and collections fees• Government can seize wages, tax refunds, Social
Security, and disability benefits
Administrative capability
Better service to students
Better-quality decision-making
Objectives
• Understand Cohort Default Rate (CDR) cycle
• Decode Loan Record Detail Report• Learn how to collect, compare, and
correct data • Know common appeal errors to avoid
What Is a Cohort Default Rate?
The Numerator is the number of Stafford loan
borrowers from the denominator who
default within a cohort period
The Denominator is the number of
Stafford loan borrowers who enter repayment within a
cohort period
= Did not
default
in 2011-2013
= Defaulted
in 2011
= Defaulted
in 2012
= Defaulted
in 2013
All borrowers entered
repayment in 2011
What Is a Cohort Default Period?
Borrowers who entered repayment between
10/01/2010 and 9/30/2011
Borrowers who entered repayment between
10/01/2010 and 9/30/2011
Borrowers who entered repayment between
10/01/2010 and 9/30/2011 and who defaulted
between 10/01/2010 and 9/30/2012
2-year CDR Example FY2011
Borrowers who entered repayment between
10/01/2010 and 9/30/2011 and who defaulted
between 10/01/2010 and 9/30/2013
3-year CDR Example FY2011
What Is a Cohort Default Rate Cycle?
• Department sends draft and official cohort default rates to schools– Eligible to participate in any of the Title IV programs – Borrower in repayment in the current or any of the
past cohort default rate periods
February August
Draft default rates released to schools only
Official rates released to schools and the general public
September January
Draft Rate Cycle Official Rate Cycle
Source: CDR Quick Reference Guide
What Is a Cohort Default Rate Cycle?
• Official cohort default rates are available at:– ed.gov/FSA/defaultmanagement/cdr.html
Source: CDR Quick Reference Guide
February August
Draft default rates released to schools only
Official rates released to schools and the general public
September January
Draft Rate Cycle Official Rate Cycle
No Sanctions or Benefits Associated with Draft CDR
• Keep in mind– Schools that fail to challenge accuracy of
draft rate data through incorrect data challenge can’t contest accuracy of official rate data
Fiscal
Year (FY)
Denominator # in
Repayment
Numerator # in Default
Draft CDR Publicatio
n Date
Official CDR
Publication Date
Rate Used for
Sanctions
2010 10/01/09 – 09/30/103-yr: 10/01/09 –
09/30/123-yr: Feb
20133-yr: Sept
2013N/A
2011 10/01/10 – 09/30/11
2-yr: 10/01/10 – 09/30/12
3-yr: 10/01/10 – 09/30/13
2-yr: Feb 2013
3-yr: Feb 2014
2-yr: Sept 2013
3-yr: Sept 2014
2-yr rate (25%)
3-yr rate (30%)
2012 10/01/11 – 09/30/123-yr: 10/01/11 –
09/30/143-yr: Feb
20153-yr: Sept
20153-yr rate
(30%)
Publication of CDRs
How Are Schools Notified?
• CDR notification packages – Sent electronically to all domestic schools
(eCDR)• Student Aid Internet Gateway (SAIG)• 5 business days to report problems• Challenges, adjustments, and appeals begin 6th
day following announced transmission date– Posted on IFAP (ifap.ed.gov)
What is Included in the eCDR?
• CDR package includes– Cover letter– Two Loan Record Detail Reports (LRDR)
• Reader-friendly• Extract-type
• CDR package includes– SHDRLROP– SHCDRROP– SHCDREOP
– Cover letter– Loan Record Detail
Reports (LRDR)• Reader-friendly• Extract-type
Loan Record Detail Report (LRDR)
• Contains borrower information for Stafford loans used to calculate draft or official cohort default rate– Includes borrower’s
• Name, Social Security number• Date borrower entered repayment• Date of default (if applicable)• Loan type
– Borrowers with multiple loans counted only once
Review LRDR
• Check for accuracy• Compare to school records
– Repayment Date– Default Status– Cancellations/Refunds
What is Included in the eCDR?
• Beginning with the FY 2009 cohort – MUST use eCDR
appeals to prepare and submit challenges or adjustments
Loan Record Detail Report – Data Manager
• Three-digit code used to identify entity reporting the information
Guaranty Agency Department of Education
Loan Record Detail Report – Repayment Date
• Indicates when borrower began repayment • Determines if loan is included in denominator
Loan Record Detail Report – Default Date
• Indicates the date– Direct Loan considered in default based on past due status
OR
– Guarantee agency paid default claim to lender for FFELP Loan
Loan Record Detail Report – CDR Usage
• Indicates how loan is included in calculation– “D” Denominator only – “B” Both Numerator and Denominator – “N” Not Used – “E” Eligible, but not counted
Collecting the Data
• Determine data that needs to be captured– Last date of attendance (LDA)– Less than half-time date (LTH)– Withdrawal date (WD)– Date entered repayment (DER)– Claim paid date/default date (CPD/DD)
• Spreadsheet or database to collect data– Implement this process early
Collecting the Data
– Internal resources available on-campus
– External resources• NSLDS• Servicer reports• Guaranty agencies
Determine whereto find data
Possible Errors on LRDR
• LRDR incorrectly: – Reports data element and data element
should be changed– Includes borrower whose repayment date
does not fall within cohort fiscal year; borrower removed from calculation
– Excludes borrower who entered repayment within cohort; borrower added to calculation
Should the Loan be Included in FY09 3-year CDR?
Darin • Graduated from school 11/4/2008• NSLDS reveals transferred to another school
2/4/2009
LDA
11/4/2008
Date entere
d repayEstimate
d 5/5/2009
Date entered repayme
nt Actual
5/13/2010
Default date
5/8/2011
Transferred to other school
2/4/2009
Should the Loan be Included in FY09 3-year CDR? No
YDefaulted between 10/1/2008 – 9/31/2011• Defaulted 5/8/2011
NFY2009 (10/1/2008 – 09/31/2009)• Date Darin entered repayment
5/13/2010
If date of repayment is delayed by re-enrolling in school prior to the end of grace, inclusion in a CDR calculation is also delayed
Darin
Should the Loan be Included in FY09 3-year CDR?
• Left school 11/4/2008• Transferred to another school 1/12/2010• Loans deferred 1/12/2010
LDA
11/4/2008
Date entered
repayment
5/5/2009
Transferred to other schoolLoan
deferred 1/12/2010
Kara
Should the Loan be Included in FY09 3-year CDR? Yes
Deferments or forbearances do not alter the date the borrower entered repayment
N Defaulted between 10/1/2008 - 9/31/2011• No default
Y FY2009 (10/1/2008 – 09/31/2009)• Date Kara entered repayment 05/05/2009
Kara
Should the Loan be Included in FY09 3-year CDR?
• Withdrew from school 6/1/2008• Defaulted on loans 5/27/2010• Consolidated three loans 12/4/2010 in order to
regain Title IV eligibility
LDA
6/1/2008
Date entered repayme
nt 12/2/200
8
Default date
5/27/2010
Kyle
Consoldate
12/4/2010
Consolenters repay
2010
Should the Loan be Included in FY09 3-year CDR? Yes
YDefaulted between 10/1/2008 – 9/31/2011• Kyle defaulted 5/27/2010
YFY2009 (10/1/2008 – 09/31/2009)• Date Kyle entered repayment
12/02/2008
The date underlying loans entered repayment is the date used in the cohort default rate calculation
Kyle
Should the Loan be Included in FY09 3-year CDR?
• Graduated from school 6/1/2008• Paid loan in full on 7/1/2008
LDA
6/1/2008 12/2/2008
Date entered repayme
nt Loan paid
in full 7/1/2008
Harrah’s
Bethany
Should the Loan be Included in FY09 3-year CDR? No
The paid-in-full date becomes the new repayment date.Same is true for loans discharged due to death, bankruptcy, disability
Defaulted between 10/1/2008 – 9/31/2011• No default
FY2009 (10/1/2008 – 09/31/2009)• Date Bethany paid in full 07/01/2008
N
N
Bethany
Challenges of Draft CDR
– Used to correct errors on draft CDR– Submitted to guarantors (FFEL) and/or DL
servicers via eCDR appeals within 45 days of timeframe begin date
• Relevant information for each borrower challenged• Supporting documentation for each borrower
challenged• CEO Certification Letter
Incorrect Data Challenge (IDC)
Challenges of Draft CDR
– Only available if school potentially subject to loss of eligibility (or provisional certification) based on draft rates
– Must send completed PRI Challenge to U.S. Department of Education within 45 days of timeframe begin date
• PRI Challenge Spreadsheet (CDR Guide page 4.2 – 8)
• Letter
Participation Rate Index Challenge (PRI)
Adjustments of Official CDR
– Ensures school’s official cohort default rate calculation reflects changes correctly agreed to as result of incorrect data challenge
– Must submit UDA to Department within 30 calendar days of timeframe begin date via eCDR appeals
Uncorrected Data Adjustment (UDA)
Adjustments of Official CDR
– Allows school to challenge accuracy of “new data” included in most recent official CDR
• Compare LRDR of draft CDR to LRDR of official CDR to determine if new data reported correctly
– Must submit NDA to Data Manager via eCDR appeals within 15 days of timeframe begin date
• Relevant information for each borrower challenged• Supporting documentation for each borrower challenged• CEO Certification Letter
New Data Adjustment (NDA)
Appeals of Official CDR
– Alleges school’s official cohort default rate includes defaulted loans considered improperly serviced for cohort default rate purposes
– Example• Borrower never made loan payment and school
can document that lender/servicer failed to complete due diligence
Loan Servicing Appeal (LS)
Appeals of Official CDR
– Must send request for loan servicing records to Data Manager and Department within 15 days of timeframe begin date
Loan Servicing Appeal (LS)
Appeals of Official CDR
– Data Manager notifies school and Department within 20 days of receipt
• Fees for providing records• List of representative sample• Description of how sample was chosen
– School must pay fee, if charged, within 15 days of data manager notification
Loan Servicing Appeal (LS)
Appeals of Official CDR
– Available if school is subject to loss of eligibility (or provisional certification) based on official rates
– School previously challenged accuracy of data as part of Incorrect Data Challenge
– Review of loan record detail reports for draft and official rates show new data
Erroneous Data Appeal (ER)
Appeals of Official CDR
– School must send Erroneous Data Appeal allegations to Data Manager within 15 days of timeframe begin date
• Erroneous Data Appeal spreadsheet• Relevant pages of Loan Record Detail Report• Supporting documentation• Letter
Erroneous Data Appeal (ER)
Appeals of Official CDR
– Available based on loss of eligibility or notice of second successive official rate potentially subjecting school to provisional certification
– School must submit independent auditor’s written opinion to Department within 30 days of timeframe begin date
• Spreadsheet of students that qualify to be included– School’s low-income rate and placement rate
(non-degree-granting school)– School’s low-income rate and completion rate
(degree-granting school)
Economically Disadvantaged Appeal (EDA)
Appeals of Official CDR
– Only available if school is subject to loss of eligibility or provisional certification based on official rates
– Must send completed Participation Rate Index Appeal to Department within 30 days of timeframe begin date
• Participation Rate Index Appeal spreadsheet• Letter
Participation Rate Index Appeal (PRI)
Appeals of Official CDR
– Subject to sanctions based on three consecutive
CDRs that meet or exceed relevant threshold if• At least two official cohort default rates are average rates
• CDRs would have been less than relevant threshold if calculated as
non-average rates
– School must send completed Average Rates Appeal
to Department within 30 days of timeframe begin date• Supporting documentation
• Certification
Average Rates Appeal
Appeals of Official CDR
– Department automatically determines if school meets criteria for thirty or fewer borrowers appeal
– School disagrees with Department’s determination
• Must send completed Thirty or Fewer Borrowers Appeal to Department within 30 days of timeframe begin date
– Supporting documentation– Certification
Thirty or Fewer Borrowers Appeal
Avoid Two Common Errors
1) Check NSLDS for student's enrollment status– Students who have withdrawn or dropped to
less than half-time status may be taking classes that maintain their eligibility elsewhere
Two Common Errors
2) If two entities are listed for loan, make sure to send challenges to correct entity – Indicated with usage code of “B” rather than
“E”– Sending challenge to wrong servicer or
guarantor can result in missed deadline
Take Action
• Review LRDR • Compare defaulted borrowers to your
own system to ensure borrowers are listed correctly
• Submit timely appeals• Analyze defaulted borrowers to see
if changes are needed in default management plan
Resources
– ifap.ed.gov/DefaultManagement/DefaultManagement.html
– ecdrappeals.ed.gov
Default Prevention and Management
eCDR Appeals System