§ 668.203 Determining cohort default rates for institutions that have undergone a change in status. ( a ) *General.* ( 1 ) Except as provided under 34 CFR 600.32(d), if you undergo a change in status identified in this section, your cohort default rate is determined under this section.
( 2 ) In determining cohort default rates under this section, the date of a merger, acquisition, or other change in status is the date the change occurs.
( 3 ) A change in status may affect your eligibility to participate in Title IV, HEA programs under § 668.206 or § 668.207.
( 4 ) If another institution's cohort default rate is applicable to you under this section, you may challenge, request an adjustment, or submit an appeal for the cohort default rate under the same requirements that would be applicable to the other institution under §§ 668.204 and 668.208.
( b ) *Acquisition or merger of institutions.* If your institution acquires, or was created by the merger of, one or more institutions that participated independently in the Title IV, HEA programs immediately before the acquisition or merger— ( 1 ) For the cohort default rates published before the date of the acquisition or merger, your cohort default rates are the same as those of your predecessor that had the highest total number of borrowers entering repayment in the two most recent cohorts used to calculate those cohort default rates; and
( 2 ) Beginning with the first cohort default rate published after the date of the acquisition or merger, your cohort default rates are determined by including the applicable borrowers from each institution involved in the acquisition or merger in the calculation under § 668.202.
( c ) *Acquisition of branches or locations.* If you acquire a branch or a location from another institution participating in the Title IV, HEA programs— ( 1 ) The cohort default rates published for you before the date of the change apply to you and to the newly acquired branch or location;
( 2 ) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and the other institution (including all of its locations) in the calculation under § 668.202;
( 3 ) After the period described in paragraph (c)(2) of this section, your cohort default rates do not include borrowers from the other institution in the calculation under § 668.202; and
( 4 ) At all times, the cohort default rate for the institution from which you acquired the branch or location is not affected by this change in status.
( d ) *Branches or locations becoming institutions.* If you are a branch or location of an institution that is participating in the Title IV, HEA programs, and you become a separate, new institution for the purposes of participating in those programs— ( 1 ) The cohort default rates published before the date of the change for your former parent institution are also applicable to you;
( 2 ) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and your former parent institution (including all of its locations) in the calculation under § 668.202; and
( 3 ) After the period described in paragraph (d)(2) of this section, your cohort default rates do not include borrowers from your former parent institution in the calculation under § 668.202.
(Authority:20 U.S.C. 1082, 1085, 1094, 1099c)