decoding cdr reports, appeals, challenges and … · decoding cdr reports, appeals, challenges and...

Decoding CDR Reports, Appeals, Challenges and Adjustments

Why Review Your CDR Data

A high CDR could result in

– Adverse publicity

– Loss of Title IV eligibility

– Loss of access to private loan funds

– Extra work due to loss of benefits or added sanctions

Administrative capability


Capturing the right data, accurate data, and timely data is critical for making good policy and accurate decisions


Better-quality decision-making


When borrowers default

– They pay more in interest and collections fees

– The government can seize wages, tax refunds, and

Social Security and disability benefits


Better service to students

Better-quality decision-making

Objectives Understanding the Cohort Default Rate

(CDR) cycle

Decoding the Loan Record Detail Report

Collecting and comparing data

Correcting data

Understanding the Cohort Default Rate Cycle

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

What is a Cohort Default Period?

Borrowers who entered

repayment between

10/01/2008 and

9/30/2009


repayment between

10/01/2008 and

9/30/2009


repayment between

10/01/2008 and 9/30/2009

and who defaulted between

10/01/2008 and 9/30/2010

2-year CDR Example FY2009


repayment between

10/01/2008 and 9/30/2009

and who defaulted between

10/01/2008 and 9/30/2011

3-year CDR Example FY2009

What is a Cohort Default Rate Cycle?

The Department sends draft and official cohort default rates to all schools that

Are eligible to participate in any of the Title IV programs

Have had a 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?

The official cohort default rates are available to the public through a searchable database 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 the accuracy of draft cohort default rate data through an incorrect data challenge may not contest the accuracy of the data used in the official rate

Publication of CDRs

How Are Schools Notified? CDR notification packages

Sent electronically to all domestic schools (eCDR)

– Using Student Aid Internet Gateway (SAIG)

– Allowed five business days to report problems

– Timelines for submitting challenges, adjustments and

appeals begin six days following announced transmission

date, as posted on IFAP (ifap.ed.gov)

• IFAP notification establishes the “Timeframe Begin

Date”

What is Included in the eCDR?

CDR package includes

Cover letter

Two Loan Record Detail Reports (LRDR)

– Reader-friendly

– Extract-type

Decoding the Loan Record Detail Report

Loan Record Detail Report (LRDR) Contains borrower information for

Stafford loans that were used to calculate a school’s 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 will be 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 all schools 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

Reader-Friendly LRDR

Loan Record Detail Report – Repayment Date

Indicates when the borrower began repayment

Determines if the loan is included in the denominator

Loan Record Detail Report – Default Date

Indicates the date

A Direct Loan is considered in default based on its past due status

OR

Guarantee agency paid a default claim to a lender for a FFELP Loan

Loan Record Detail Report – CDR Usage Indicates how the loan is included in the calculation

“D” Denominator only

“B” Both Numerator and Denominator

“N” Not Used

“E” Eligible, but not counted

Important Codes to Know

Source: CDR Guide, page 2.3-7

Important Codes to Know

Source: CDR Guide, page 2.3-8

Collecting and Comparing Data

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)

Use a spreadsheet or database to collect

this data

Implement this process early

Collecting the Data

Internal resources available on-campus

External resources

– NSLDS

– Servicer reports

– Guaranty agencies

Determine where

to find data

Possible Errors on LRDR LRDR incorrectly:

Reports a data element and the data element should be changed

Includes a borrower whose repayment date does not fall within the cohort fiscal year and the borrower should be removed from the cohort rate calculation

Excludes a borrower who entered repayment within the cohort and the borrower should be added to the cohort rate calculation

Should the Loan be Included in FY09 3-year CDR?

Alex

Graduated from your school 11/4/2008

NSLDS reveals Alex transferred to another school on 2/4/2009

LDA

11/4/2008

Estimated date

entered repayme

nt

5/5/2009

Actual date enter repaymen

t

Actual DER

5/13/2010

Default date

5/8/2011


Alex

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

No Defaulted between 10/1/2008 – 9/31/2011 • Defaulted 5/8/2011

No FY2009 (10/1/2008 – 09/31/2009)

• Date Alex entered repayment 5/13/2010


Sara

Left your school 11/4/2008

Transferred to another school 1/12/2010

Loans are deferred on 1/12/2010

LDA

11/4/2008

Estimated date

entered repayme

nt 5/5/2009

Actual date

entered repaymen

t 05/05/2009

(Loan deferred 1/12/2010)

Default date

5/14/2011


Sara

Deferments or forbearances do not alter the date the borrower entered repayment

Yes Defaulted between 10/1/2008 - 9/31/2011 • 2/14/2011 default

Yes FY2009 (10/1/2008 – 09/31/2009) • Date Sara entered repayment 05/05/2009


Quinn

Withdrew from your school 6/1/2008

Defaulted on loans 05/27/2010

Consolidated three loans 12/4/2010 in order to regain Title IV eligibility

LDA

6/1/2008

Estimated date

entered repayme

nt

12/2/2008

Actual date

entered repaymen

t 12/2/2008

Default date

5/27/2010


Quinn

The date underlying loans entered repayment is the date used in the cohort default rate calculation

Yes Defaulted between 10/1/2008 – 9/31/2011

• Quinn defaulted 5-27-2010

Yes FY2009 (10/1/2008 – 09/31/2009)

• Date Quinn entered repayment 12/02/2008


Becca

Graduated from your school 6/1/2008

Paid loan in full on 7/1/2008

LDA

6/1/2008

Estimated date

entered repayme

nt

12/2/2008

Actual date

entered repaymen

t Loan paid in full

7/1/2008

Default date

NA


Becca

The paid-in-full date becomes the new repayment date

Same is true for loans discharged due to death, bankruptcy, disability

No Defaulted between 10/1/2008 – 9/31/2011

• No default

No FY2009 (10/1/2008 – 09/31/2009)

• Date Becca paid in full 07/01/2008

Correcting Data

Challenges of Draft CDR

Used to correct errors on the draft CDR

Submitted by school 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

34 CFR 668.185(b)

34 CFR 668.204(b)

Incorrect Data Challenge (IDC)

Challenges of Draft CDR

Only available if a school is potentially subject to a loss of eligibility (or provisional certification) based on draft rates

School must send completed PRI Challenge to the 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)

34 CFR 668.185(c)

Adjustments of Official CDR

Ensures that a school’s official cohort default rate calculation reflects changes that were correctly agreed to as a result of an incorrect data challenge

School must submit its UDA to the Department within 30 calendar days of timeframe begin date via eCDR Appeals system

34 CFR 668.190

34 CFR 668.209

Uncorrected Data Adjustment (UDA)

Adjustments of Official CDR

Allows a school to challenge the 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 is reported correctly

School must submit its NDA to Data Manager via eCDR Appeals within 15 days of timeframe begin date

– Relevant Information for each borrower challenged

– Supporting documentation each borrower challenged

– CEO Certification Letter

New Data Adjustment (NDA)

34 CFR 668.191

34 CFR 668.210

Appeals of Official CDR

Alleges a school’s official cohort default rate includes defaulted loans that are considered improperly serviced for cohort default rate purposes

Example

– Borrower never made a loan payment and school can

document that lender/servicer failed to complete due

diligence

Loan Servicing Appeal (LS)

34 CFR 668.193

34 CFR 668.212


School must send request for loan servicing records to Data Manager and to the Department within 15 days of timeframe begin date


34 CFR 668.193

34 CFR 668.212


Data Manager notifies school and the Department within 20 days of receipt of request

– Fees for providing records

– List of representative sample

– Description of how sample was chosen

School must pay the fee, if charged within 15 days of data manager notification


34 CFR 668.193

34 CFR 668.212


Available if the school is subject to a loss of eligibility (or provisional certification) based on official rates; or

If the school previously challenged the accuracy of data as part of its Incorrect Data Challenge, or

If a review of loan record detail reports for draft and official rates show new data

Erroneous Data Appeal (ER)

34 CFR 668.192

34 CFR 668.211


School must send the 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)

34 CFR 668.192

34 CFR 668.211


Available based on a loss of eligibility or notice of second successive official rate potentially subjecting school to provisional certification

School must submit an independent auditor’s written opinion to the 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)

34 CFR 668.184


Only available if a school is subject to a loss of eligibility or provisional certification based on official rates

School must send completed Participation Rate Index Appeal to the Department within 30 days of timeframe begin date

– Participation Rate Index Appeal spreadsheet

– Letter

34 CFR 668.195

34 CFR 668.214

Participation Rate Index Appeal (PRI)


Subject to sanctions based three consecutive CDRs that meet or exceed the relevant threshold if

– At least two of their official cohort default rates are average rates

– CDRs would have been less than the relevant threshold if they had been calculated as non-average rates

School must send completed Average Rates Appeal to the Department within 30 days of timeframe begin date

– Supporting documentation

– Certification

34 CFR 668.195

34 CFR 668.214

Average Rates Appeal


Department will automatically determine if school meets criteria for thirty or fewer borrowers appeal

If school disagrees with Department’s determination

– School must send completed Thirty or Fewer Borrowers

Appeal to the Department within 30 days of timeframe

begin date

• Supporting documentation

• Certification

34 CFR 668.197

34 CFR 668.216

Thirty or Fewer Borrowers Appeal

Take Action Review the LRDR

Compare defaulted borrowers to your own system to ensure borrowers are listed correctly

Submit timely appeals, if necessary

Analyze defaulted borrowers to see if changes are needed in your default management plan

Resources

– ifap.ed.gov/DefaultManagement/Default Management.html

– ecdrappeals.ed.gov

Default Prevention and Management

eCDR Appeals System

Thanks for Attending

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