Bulletin ID
DLB - 97 - 15
| PublicationDate: 4/1/97 BulletinID: DLB - 97 - 15 April 1997 DLB-97-15 SUMMARY: Information Regarding Fiscal Year 1995 Draft Cohort Default Rates Dear Colleague: The Fiscal Year 1995 Draft Cohort Default Rates will be mailed to all schools the week of May 4, 1997. Most Year 1 Direct Loan schools have borrowers in both the FFEL and Direct Loan Programs. As such, this bulletin should clarify some issues for your school. Although both FFEL and Direct loans are used in the cohort default rate calculation, the cohort default rate will be based on an unduplicated borrower count. This means that if a borrower has defaulted in both the FFEL and Direct Loan Programs, the borrower is only counted once in a school's cohort default rate calculation. Schools will receive ONE rate which includes the school's borrowers in both the FFEL and Direct Loan Programs (a dual program rate). All schools will automatically receive the BUD (back-up data) report. The BUD report lists all borrowers who have entered repayment within the cohort year, including those borrowers that have defaulted. The last page of the BUD report will provide schools with information that indicates the numerator (the number of students in default) and the denominator (the number of students in repayment) for each of the loan programs. This will enable schools to calculate separate percentages for each loan program. Please note: a school's cohort default rate is based on information obtained from both loan programs. The "Draft Cohort Default Rate Review Guide," which will be mailed to schools along with the BUD report, will include detailed information about the entire cohort default rate process. If schools choose to challenge the draft cohort default rate, the Direct Loan Servicing Center will be responsible for responding to allegations regarding Direct Loan Program loans. The FFEL Program guaranty agencies will be responsible for responding to allegations regarding FFEL Program loans. These procedures are also thoroughly addressed in the "Draft Cohort Default Rate Review Guide." Again, upon receipt of the draft cohort default rates, for further guidance, please refer to the "Draft Cohort Default Rate Review Guide" being mailed along with your school's BUD report. If you have additional questions, the following numbers may be helpful: Default Management Division (202) 708-9396 Direct Loan Servicing Center (888) 877-7658 Sincerely, Joe L. McCormick, Chair Direct Loan Task Force |