Posted Date: March 26, 2009
Author: James Manning, Acting Chief Operating Officer, Federal Student Aid
Subject: FY 2007 Draft Student Loan Cohort Default Rates
The Higher Education Act of 1965 (HEA), as amended, requires the Department to calculate and publish a student loan cohort default rate.
The draft FY 2007 national student loan cohort default rate is 6.9 percent. The draft rate increased from the national FY 2006 official rate of 5.2 percent and the national FY 2005 official rate of 4.6 percent.
The FY 2007 draft cohort default rates represent the percentage of borrowers in the Federal Family Education Loan and William D. Ford Federal Direct Loan programs who began repaying their loans between Oct. 1, 2006, and Sept. 30, 2007, and who defaulted on or before Sept. 30, 2008.
Each February, the Department calculates and releases draft rates for each institution. Schools have the opportunity to review their draft rates and may challenge the calculations. Draft rates do not result in sanctions and can change between February and the release of the official cohort default rate in September. Therefore, individual institutional draft rates are not made public.
Borrowers needing assistance in repaying their student loans can visit www.federalstudentaid.ed.gov or contact the holders of their loans to learn about repayment options. For help locating their loan holders, borrowers may access www.nslds.ed.gov or contact the Department's Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
Additional information on the national draft Direct Loan Program and Federal Family Education Loan Program (FFELP) student loan default rates as well as aggregate national draft rates by type of postsecondary institution are attached to this announcement.