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Summary: Default Prevention and Management announce the posting of a revised Cohort Default Rate Guide

Publication Date: September 11, 2006

Author: G. Kay Jacks, General Manager, Application, Operations and Delivery Services, Federal Student Aid

Summary: Default Prevention and Management announce the posting of a revised Cohort Default Rate Guide

Posted on 09-11-2006

Federal Student Aid is pleased to announce the issuance of the August 2006 Cohort Default Rate Guide (Guide). This version of the Guide captures the changes made since its initial publication on August 2001, including those changes noted on Default Prevention & Management's webpage under the Default Rate Guide "change page information" link ( Changes resulting from the Higher Education Reconciliation Act of 2005 (the HERA) have also been incorporated into this Guide issue. Tables and examples have been updated and some areas of information have been restructured for easier reading.

As before, the Guide is the primary reference tool for schools to use in understanding the complete cohort default rate process-from the calculation through the challenge/appeal processes. The Guide is effective until the Department withdraws it, changes it or publishes other guidance. The information found in the Guide does not supersede or alter any regulations or statutes requirements that are in effect. If information in the Guide conflicts with the regulations and statutes, the regulations and/or statutes take precedence.

Like the previous version of the Guide, the Guide's material is organized into four parts. Each part is further divided into chapters: Part I, Introduction; Part II General Information; Part III Strategy and Part IV Challenges, Adjustments and Appeals. The Guide has a Glossary to help the reader locate specific topics.

The main changes to this version of the Guide compared to the previous version, include:

  • Re-ordered and in some cases re-named chapters to increase continuity and better portray the information contained within a chapter
  • Consolidated "like" information into the same chapter, for example,
    • Collapsed the "General Information Tools" and the "Challenge, Adjustment, Appeals Tools" chapters and integrated that information into relevant chapters
    • All information about the Loan Record Detail Report is now in one chapter (Chapter 2.3)
    • Information on "What specific allegations and supporting documentation can a school submit" has been moved to Chapter 3.1-7 of this issue.
  • Created a separate chapter (chapter 3.2) for the discussion of year-round monitoring of loans.
  • Incorporated changes noted on the Guide homepage under "change page information" (8/21/01 through last update 9/12/05). These change pages have been archived on the Guide webpage under "archived change page log/2006" Incorporated appropriate HERA information
    • Benefits for low cohort default rates
    • Change in the number of payments required to rehabilitate a defaulted loan
    • Loan discharges based on false certification
  • Updated all charts and examples throughout the Guide
  • Created preformatted spreadsheet templates for the challenge, adjustment, appeals and embedded the instructions within each template. Specified templates can be found in the chapters on challenges/adjustments/appeals accordingly. The templates themselves may also be found as a link from the Guide homepage.
  • Summarized "How to Use this Guide," which is located in Chapter 1.1-3.

Default Prevention and Management will update the Guide each year, to coincide with the issuance of the cohort default rates in September; however, revisions to the Guide, as they occur, will be announced on the Guide homepage and changed within the Guide itself to keep it current. The previous years version will be archived under Archived Guide 2001.

The Department introduced another resource, the on October 26, 2005. The Quick Reference presents the key elements of the Cohort Default Rate Guide in a more informal, easy to understand manner. It can also be accessed from the Default Rate Guide homepage.

Contact Default Prevention and Management if you have any questions about the revised Guide. Phone: 202-377-4259 E-mail:

Last Modified: 09/10/2006