Cohort Default Rate Guide

September 2020

FederaIStudent Aid An OFFICE of the U.S. DEPARTMENT of EDUCATION 

PROUD SPONSOR of

the AMERICAN MIND*
Contents

Cohort Default Rate Guide

Part 1 INTRODUCTION

Introduction

Part 2 GENERAL INFORMATION

2.1 How The Cohort Default Rates Are Calculated

What is a cohort default rate?.................................................................................. 2.1-2

Which types of loans are included in the cohort defaultrate calculation? ................. 2.1-3

How does the Department calculate a school’s cohort default rate? ......................... 2.1-3

Which formula does the Department use to calculate

a school’s DRAFT cohort default rate?.......................................................... 2.1-5

Which formula does the Department use to calculate

a school’s OFFICIAL cohort default rate? ...................................................... 2.1-5

Which borrowers are placed in the denominator

of the cohort default rate calculation? ......................................................... 2.1-8

Which borrowers are placed in the numerator

of the cohort default rate calculation? ......................................................... 2.1-8

How do consolidation loans affect the numerator

of the cohort default rate calculation? ......................................................... 2.1-9

How does loan rehabilitation affect the numerator

of the cohort default rate calculation? ......................................................... 2.1-9

What special circumstances affect whether a borrower

will be included in the cohort default rate calculation?............................... 2.1-10

2.2 How Schools Get Cohort Default Rates and Loan Data

When are cohort default rates sent to schools? ........................................................ 2.2-2

Who receives cohort default rate information?......................................................... 2.2-2

How does the Department send cohort default rate information to schools? ............ 2.2-2

What is included in the eCDR package? .................................................................... 2.2-2

How does a school request a copy of the LRDR from NSLDS?..................................... 2.2-3

When may a school request a copy of the LRDR? ...................................................... 2.2-4

What LRDR data is sent to a school that has been

involved in a change of status? .................................................................... 2.2-4

Chart- How to Request an Electronic LRDR from NSLDS?........................................ 2.2.2-2

Chart-Using EDCONNECT to Retrieve Files Requested from NSLDS ......................... 2.2.2-3
2.3 Reviewing the Loan Record Detail Report

What is a loan record detailreport (LRDR)? .............................................................. 2.3-2

Why should a school review the LRDR for the DRAFT cohortdefault rates? ............... 2.3-2

Why should a school review the LRDR for the OFFICIAL cohortdefault rates?............ 2.3-2

How does a school determine if there is inaccurate data on the LRDR? ..................... 2.3-3

How does a school review its cohort defaultrate data? ............................................ 2.3-4

Are the LRDRs subject to the Privacy Act? ................................................................. 2.3-4

Loan Record Detail Report: Reader-Friendly Format....................................... 2.3 (Part 2)-5

Chart-Reading the Layouts of the Loan Record Detail Report ............................2.3(Part 3)

Reading Layouts for the LRDR & Detailed Repayment Information....................2.3(Part 4)

2.4 Cohort Default Rate Effects

Why are cohort default rates important?.................................................................. 2.4-2

Why is it important to review the data for DRAFT cohortdefault rates?.................... 2.4-2

Will a school’s DRAFT and OFFICIAL cohort default rate data be the same?............... 2.4-2

Are there any benefits for schools with low official cohortdefault rates? .................. 2.4-3

Are there any sanctions associated with high

official cohort default rates? ........................................................................ 2.4-4

Can a school avoid the sanctions associated with high

official cohort default rates? ........................................................................ 2.4-5

Are there any consequences if a school submits adjustments

and/or appeals but fails to avoid sanctions? ................................................ 2.4-6

If a school is subject to a sanction, when does the sanction take effect?.................... 2.4-6

How does a school withdraw from or reapply for

participation in the Title IV loan programs?.................................................. 2.4-7

2.5 Change in Status and Evasion

What is a change in status?...................................................................................... 2.5-2

How does a school’s change in status

affect the school’s cohort default rate? ........................................................ 2.5-3

How does a school notify the Department

of a possible future change in status? .......................................................... 2.5-3

What types of actions are considered attempts to evade

cohort default rate consequences?............................................................... 2.5-5

How does a change in status affect a school that

was subject to loss of eligibility at the time ofthe change?........................... 2.5-5
Part 3 STRATEGY

3.1 Reviewing Rates and Loan Data

Why should a school official review this chapter? ..................................................... 3.1-2

How can a school ensure that its internal offices communicate

and respond in a proper manner? ................................................................ 3.1-2

How can a school ensure proper communication with its external partners?............. 3.1-2

Which school office receives cohort defaultrate correspondence?............................ 3.1-2

What actions can a school take to help process

the draft and official cohort default rates?.................................................. 3.1-3

How can a school prepare for the release of the cohort default rates? ...................... 3.1-3

How does a school determine if it should

submit a challenge, adjustment, or appeal?................................................. 3.1-4

Why should a school that is not subject to loss of eligibility

contest inaccurate data on the LRDR?.......................................................... 3.1-5

Challenges, adjustments, and appeals based on incorrect data or

improper servicing (potentially affecting school’s cohort default rate).......... 3.1-6

What types of allegations may a school

submit to contest data on the LRDR? ........................................................... 3.1-8

What supporting documentation does a school need to submit

when contesting data on the LRDR?............................................................. 3.1-8

Does a school need to submit LRDR pages with its allegations? ................................ 3.1-9

What specific allegations and supporting documentation

can a school submit when contesting data on the LRDR?.............................. 3.1-9

Chart-Borrower incorrectly included on a LRDR because of an incorrect

date entered repayment............................................................................ 3.1-10

Chart-Borrower incorrectly reported in default on a LRDR....................................... 3.1-11

Chart-Borrower incorrectly reported on a LRDR because ofmultiple loans.............. 3.1-12

Chart-Borrower incorrectly included on a LRDR....................................................... 3.1-13

Chart-Borrower incorrectly excluded on a LRDR because of an

incorrect date entered repayment............................................................... 3.1-13

3.2 Monitoring Loan Repayment Status Throughout the Year

What kinds of information should a school track

before the release of the cohort default rates?............................................. 3.2-2

What are the benefits of reviewing repaymentinformation regularly? ..................... 3.2-2

How can I find out the current repayment status of students frommy school?.......... 3.2-2

How can I find out when student borrowers at my school

are scheduled to go into repayment? ........................................................... 3.2-3

How can I get a list of students from my school whose loans have defaulted?........... 3.2-3

What other types of repayment information are available?...................................... 3.2-3

Is repayment information subject to the Privacy Act? ............................................... 3.2-4

What is the DELQ01 Report?..................................................................................... 3.2-4

What is the SCHPR2 Report?..................................................................................... 3.2-5

Obtaining Summary Repayment Information from NSLDS...................................... 3.2.2-2

Obtaining Detailed Repayment Reports from NSLDS.............................................. 3.2.2-3

Downloading Repayment Information from the SAIG Mailbox ............................... 3.2.2-6

Viewing Delinquent Borrowers Information on NSLDS............................................ 3.2.2-7

Obtaining Delinquent Borrower and School Portfolio Reportsfrom NSLDS ............. 3.2.2-9
Downloading Delinquent Borrower and School Portfolio Report Information from the SAIG 

Mailbox ..................................................................................................3.2.2-13

3.3 Data Manager Strategies and Reports

Why should a data manager review this chapter? .................................................... 3.3-2

What strategies can a data manager employ before

the release of the draft and official cohort default rates? ............................. 3.3-2

What strategies can a data manager employ to help process

challenges, adjustments, and appeals? ........................................................ 3.3-3

What should a data manager do if it receives

an incorrect submission from a school?........................................................ 3.3-3

What should a data manager do if the school’s

challenge, adjustment, or appeal is successful?............................................ 3.3-4

Part 4 CHALLENGES, ADJUSTMENTS, AND APPEALS

4.1 Incorrect Data Challenge

What is an incorrect data challenge?........................................................................4.1-2

Which schools are eligible to submit an incorrect data challenge? ............................4.1-3

What benefit will a school gain from submitting an incorrectdata challenge? ..........4.1-4

What roles do the Department and data managers have in a school’s incorrect

data challenge?........................................................................................... 4.1-4

When must a school submit an incorrect data challenge...........................................4.1-5

How does a school submit an incorrect data challenge?........................................... 4.1-5

How does a school register to use eCDR Appeals....................................................... 4.1-5

Where can a new user find guidance on submitting an incorrect data challenge using eCDR 

Appeals..................................................................................................... 4.1-5

What information must a school gather to prepare its incorrectdata challenge........4.1-5

How does a data manager respond to a school’s incorrectdata challenge? .............4.1-6

What does a school do with a data manager’s incorrect data challenge

Response..................................................................................................... 4.1-8

What does the Department do with a data manager’s incorrect data challenge 

response?...................................................................................................4.1-8

What happens after the Department has completed its review of the incorrect data 

challenge?...............................................................................................................4.1-8

Incorrect Data Challenge Checklist......................................................................... 4.1-10
4.2 Participation Rate Index Challenge

What is a participation rate index challenge? ...........................................................4.2-2

Which cohort default rate can be used to determine a participation

rate index challenge? ..................................................................................4.2-3

Which schools are eligible to submit a participation rate index challenge?..............4.2-4

What benefit will a school gain from submitting a participation rate

index challenge? ........................................................................................ 4.2-4

Are participation rate index challenges based on a specific period of time?............. 4.2-4

How does a school calculate its participation rate index?........................................ 4.2-6

Does a school need to wait until the draft cohort default rate is released to

prepare its participation rate index challenge?...............................................4.2-8

What roles do the Department and data managers have in a school’s participation

rate index challenge?..................................................................................... 4.2-8

What materials must a school submit as part of a participation

rate index challenge?..................................................................................... 4.2-8

How does a school submit a participation rate index challenge? ............................. 4.2-9

What happens after the school submits the participation rate index challenge?.....4.2-10

What happens to a school’s participation rate index challenge after the release

of the official cohort default rates? ..............................................................4.2-10

Participation Rate Index Challenge Checklist......................................................... 4.2-12

4.3 Uncorrected Data Adjustment

What is an uncorrected data adjustment? ................................................................4.3-2

Which schools are eligible to submit an uncorrected data adjustment?.....................4.3-2

What benefit will a school gain from submitting an uncorrecteddata adjustment?...4.3-3

What roles do data managers have in a school’s uncorrected data adjustment?...... 4.3-3

How does a school prepare an uncorrected data adjustment? .................................4.3-3

What happens after the school submits the uncorrected data adjustment? ............ 4.3-4

Uncorrected Data Adjustment Checklist................................................................... 4.3-7

4.4 New Data Adjustment

What is a new data adjustment? ....................................................................................4.4-2

What is new data............................................................................................................4.4-2

What benefit will a school gain from submitting a newdata adjustment?.......................4.4-3
What roles do the Department and data managers have in a school’s new

data adjustment?................................................................................................4.4-3

How does a school submit new data adjustment allegations to a data manager? ...........4.4-4

How does a data manager respond to a school’s new dataadjustment allegations?...... 4.4-4

What does a school do with the data manager’s new data adjustment

allegations response?......................................................................................... 4.4-6

What happens after the school submits the new data adjustment? ...............................4.4-7

New Data Adjustment Checklists.................................................................................. 4.4-9

4.5 Erroneous Data Appeal

What is an erroneous data appeal? ................................................................................4.5-2

What is new data? .........................................................................................................4.5-3

What if the new data is correct?.................................................................................... 4.5-3

What is disputed data?..................................................................................................4.5-3

Which schools are eligible to submit an erroneous data appeal?................................... 4.5-4

What benefit will a school gain from submitting an erroneous data appeal?................. 4.5-4

What roles do the Department and data managers have in a school’s

erroneous data appeal? ....................................................................................4.5-5

How does a school submit erroneous data appeal allegations to adata manager? .......4.5-5

How does a school identify the data manager of a loan? .............................................. 4.5-7

How does a data manager respond to a school’s erroneous data

appeal allegations?..........................................................................................4.5-7

What does a school do with the data manager’s erroneous data appeal

allegations response?...................................................................................... 4.5-12

What happens after the school submits the erroneous data appeal? ..........................4.5.15

How does provisional certification affect a school’s ability to submit

an erroneous data appeal? .............................................................................4.5-15

Erroneous Data Appeal Checklists..............................................................................4.5-21

4.6 Loan Servicing Appeal

What is a loan servicing appeal?.................................................................................4.6-2

When is a defaulted FFEL considered improperly serviced for cohort

default rate purposes?................................................................................... 4.6-2

When is a defaulted Direct Loan considered improperly serviced for

cohort default rate purposes?........................................................................4.6-4

Which schools are eligible to submit a loan servicing appeal?....................................4.6-4
What benefit will a school gain from submitting a loan servicing appeal?..................4.6-4

What roles do the Department and data managers have in a school’s

loan servicing appeal? ...............................................................................4.6-5

How does a school submit a request for loan servicing records?............................... 4.6-6

How does a school register to use eCDR Appeals?.................................................... 4.6-6

Where can a new user find guidance on submitting a loan servicing appeal using eCDR 

Appeals?....................................................................................................4.6-6

How does a school prepare its request for loan servicing records via eCDR 

Appeals??................................................................................................. 4.6-6

What does a data manager do when it receives a school’s request

for loan servicing records?......................................................................... 4.6-7

What if the data manager requires that a fee be paid to obtain loan

servicing records?....................................................................................... 4.6-8

How does a data manager respond after it determines that it is

appropriate to send the loan servicing records?..........................................4.6-8

What does the school do with the data manager’s response to the

school’s request for loan servicing records? ................................................ 4.6-9

What happens after the school submits the loan servicing appeal?.........................4.6-12

Loan Servicing Appeal Checklists............................................................................ 4.6-14

4.7 Economically Disadvantaged Appeal

What is an economically disadvantaged appeal?.................................................. 4.7-2

What benefit will a school gain from submitting an economically

disadvantaged appeal?............................................................................... 4.7-3

Are economically disadvantaged appeals based on a specific period of time? .......4.7-3

How does a school calculate its low-income rate?...................................................4.7-4

How does a non-degree-granting school calculate its placement rate? ................... 4.7-6

How does a degree-granting school calculate its completion rate? .........................4.7-8

Does a school need to wait until it receives a notice of loss of eligibility

to calculate its low- income rate and placement rate or low-income

rate and completion rate? ......................................................................... 4.7-9

How does a school submit an economically disadvantaged appeal?........................4.7-9

How does an independent auditor review the management’swritten assertion? ....4.7-12

What happens after the school submits the independent auditor’s

written opinion?.......................................................................................4.7-12
What roles do data managers have in a school’s economically

disadvantaged appeal?. ........................................................................... 4.7-13

Economically Disadvantaged Appeal Checklists ....................................................4.7-18

4.8 Participation Rate Index Appeal

What is a participation rate index appeal? .......................................................... 4.8-2

Which cohort default rate can be used to determine a participation

rate index appeal?................................................................................... 4.8-2

Which schools are eligible to submit a participation rate index appeal?................4.8-3

What benefit will a school gain from submitting a participation rate

index appeal?........................................................................................... 4.8-3

Are participation rate index appeals based on a specific period of time?..............4.8-4

How does a school calculate its participation rate index?.................................... 4.8-5

Does a school need to wait until the official cohort default rate

is released to prepare its participation rate index appeal? ..................... 4.8-6

What roles do the Department and data managers have in a school’s

participation rate index appeal?............................................................ 4.8-7

What materials must a school submit as part of a participation

rate index appeal? .................................................................................4.8-7

How does a school submit a participation rate index appeal..............................4.8-8

What happens after the school submits the participation rate index appeal?.... 4.8-9

Participation Rate Index Appeal Checklists.......................................................4.8-11
4.9 Average Rates Appeal

What is an average rates appeal?...........................................................................4.9-2

How does a school qualify for a successful average rates appeal if the school is subject to 

sanction because of three consecutive cohort default rates that equal or exceed the 

relevant threshold as described in Chapter 2.4? ......................................... 4.9-2

How does a school qualify for a successful average rates appeal if the 

school is subject to sanction because of a cohort default rate

that is greater than 40.0 percent? ................................................................4.9-3

How does the average rates appeal process begin?...............................................4.9-3

What if a school disagrees with the initial determinationby DPM?........................4.9-3

Average Rates Appeal Checklists.............................................................................4.9-5

4.10 Thirty-or-Fewer Borrowers Appeal

What is a thirty-or-fewer borrowers appeal? ..........................................................4.10-2

How does a school qualify for a successful thirty-or-fewerborrowers appeal?.........4.10-2

How does the thirty-or-fewer borrowers appeal process begin?............................. 4.10-2

What if a school disagrees with the initial determinationby DPM? ........................ 4.10-3

Thirty-or-Fewer Borrowers Appeal Checklist ...........................................................4.10-3

Glossary

• Appendix A: Timeline Chart

• Appendix B: Regulations

NOTE: All Templates for Spreadsheets are posted on the Default 

Management website.
1.1 Introduction

How to use this guide
What is the “Cohort Default Rate Guide?”

The “Cohort Default Rate Guide” (Guide) is a publication that the U.S. Department of Education (the 

Department) designed to assist schools with their Federal Family Education Loan (FFEL) Program and 

William D. Ford Federal Direct Loan (Direct Loan) Program cohort default rate data. This Guide should 

be used as a reference tool in understanding cohort default rates and processes. This Guide is effective 

until the Department withdraws it, changes it, or publishes other guidance. The most recent version of 

this Guide is posted under “CDR Guide” on the Default Management website.

The information found in this Guide does not supersede or alter any regulatory or statutory 

requirements that are in effect. If the information in this Guide conflicts with the regulations or 

statute, the regulations and/or statute take precedence. The legislation authorizing the FFEL and Direct 

Loan programs can be found in Title IV of the Higher Education Act (HEA) of 1965, as amended. The 

regulations for cohort default rates are primarily in Subparts N of Section 668 of the Code of Federal 

Regulations (CFR).

What kind of cohort default rates are not covered in this Guide?

The Department also publishes FFEL cohort default rates for guaranty agencies and lenders. For 

information on guaranty agency and lender cohort default rates, call the Department at 202-377-3053 

or visit the Information for Financial Aid Professionals (IFAP) website.

The Department publishes a Cohort Default Rate Guide for Lenders and Guaranty Agencies.

In addition, the Department publishes Federal Perkins Loan Program cohort default rates for schools. 

For information on Federal Perkins Loan Program cohort default rates, call the Department at 1-877-

801-7168, or go to the Perkins Cohort Default Rate Booklet.

How is this Guide organized?

The Guide uses a two-thirds/one-third layout, where two-thirds of the page contains text and onethird of the page is a margin. The margins contain illustrations designed to assist you with 

understanding the material in the Guide. The margins also provide a space for notes that you may wish 

to take while reading the Guide.

Page 1.1 - 2
The material in this Guide is organized into four parts. Each part is further divided 

into chapters. The four parts are:

Part I—Introduction

Part II—General Information

Part Two consists of five chapters.

• These chapters cover calculating cohort default rates (2.1), how schools 

get the rates and loan data (2.2), the loan record detail report (2.3), cohort 

default rate effects (2.4), and change in status and evasion (2.5).

Part III—Strategy

Part Three consists of three chapters.

• The first chapter discusses the school’s options for responding to the draft 

and official school cohort default rate releases.

• The second chapter discusses how a school can anticipate and resolve 

repayment problems by monitoring the enrollment and repayment status 

of its students and former students who have borrowed FFEL or Direct 

Loans.

• The final chapter (3.3) contains strategies for data manager.

Part IV—Challenges, Adjustments, and Appeals

Part Four consists of 10 chapters.

• The first eight chapters in Part four deal with the eight types of challenges, 

adjustments, and appeals a school may initiate.

• The next two chapters (4.9 and 4.10) discuss the two types of appeals the 

Department usually initiates.

There are several changes in this version of the Guide from previous versions of the 

Guide. These include—

• Includes updated information on how the 3-year cohort default rate is 

calculated

• Updated information on the electronic cohort default rate appealssystem

• Updated LRDR layouts

Page 1.1 - 3
Page 1.1 - 4

How to Use this Guide

Background

To learn how the Department calculates a school’s cohort default rate 2.1

To find out how cohort default rates affect your school’s eligibility 2.4

To find out the effects of a change in the school’s status and evasion 2.5

Obtaining, Reviewing, & Submitting Data

To request cohort default rate files or Loan Record Detail Reports 2.2

To see contents and layout of the Loan Record Detail Report 2.3

[Schools] To find out how to respond to draft and official cohort default rates 3.1

Preparation & Long-Term Strategies

To learn how to prevent defaults by monitoring the loan repayment of your school’s 3.2

students and former students year-round

[Data managers] To learn about cohort default rate strategies for data managers 3.3

Challenges, Adjustments, & Appeals

To challenge draft cohort default rate data based on

• incorrect data 4.1

• low borrower participation rate 4.2

To submit an adjustment to FINAL cohort default rate data based on

• uncorrected data 4.3

• new data 4.4

To submit an appeal to a FINAL cohort default rate based on

• erroneous data 4.5

• loan servicing errors 4.6

• a high number of economically disadvantaged students 4.7

• a low participation rate index 4.8

• average rates 4.9

• thirty-or fewer borrowers 4.10

Providing Feedback about this Guide

The Department is interested in receiving feedback regarding the new Guide. If you have questions, 

comments, or suggestions concerning the content, format, and/or structure of this Guide, please contact 

us at:

U.S. Department of Education 

Partner Eligibility and Oversight

Services

Union Center Plaza, 6th Floor 61G3

830 First Street, NE.

Washington, DC 20202-5353

You may also send comments via email to: fsa.schools.default.management@ed.gov
1

2.1 How The Cohort Default Rates 

Are Calculated

Understanding The CDR Calculation Process
What is a cohort default rate?

For schools having 30 or more borrowers entering repayment in a fiscal year, the school’s 

cohort default rate is the percentage of a school’s borrowers who enter repayment on 

certain Federal Family Education Loans (FFELs) and/or William D. Ford Federal Direct Loans 

(Direct Loans) during that fiscal year and default (or meet the other specified condition)

within the cohort default period. For schools with 29 or fewer borrowers entering repayment 

during a fiscal year, the cohort default rate is an “average rate” based on borrowers entering 

repayment over a three-year period.

“Cohort Default Period”

The phrase “cohort default period” refers to the three-year period that begins on October 1st 

of the fiscal year when the borrower enters repayment and ends on September 30th of the 

second fiscal year following the fiscal year in which the borrower entered repayment. This 

is the period during which a borrower’s default affects the school’s cohort defaultrate.

Cohort default rates are based on federal fiscal years. Federal fiscal years begin October 1st 

of a calendar year and end on September 30th of the following calendar year. Each federal 

fiscal year refers to the calendar year in which it ends.

The phrase “cohort fiscal year” or “cohort year” refers to the fiscal year for which the cohort 

default rate is calculated. For example, when calculating the 2014 cohort default rate, the 

cohort fiscal year is FY 2014 (October 1, 2013 to September 30, 2014).

The phrase “other specified condition” occurs when the school’s owner, agent, contractor, 

employee, or any other affiliated entity or individual makes a payment to prevent a 

borrower’s default on a loan that entered repayment during the cohort fiscal year, before the 

end of the cohort default period. In such a situation, the borrower is considered in default for 

cohort default rate purposes. For the purposes of this Guide, the phrase “other specified

condition” will always refer to this situation.

Page 2.1 - 2
Which types of loans are included in the cohort default rate 

calculation?

The FFELs included in the cohort default rate calculation are:

♦ Subsidized and unsubsidized Federal Stafford Loans(collectively 

referred to as Federal Stafford Loans) and

The Direct Loans included in the cohort default rate calculation are:

♦ Federal Direct Subsidized Stafford/Ford Loans and Federal Direct 

Unsubsidized Stafford/Direct Loans (collectively referred to asDirect 

Stafford/Ford Loans).

The following loans are not included in the cohort default rate calculation:

♦ Federal PLUS Loans;

♦ Federal Graduate/Professional PLUS Loans;

♦ Federal Direct Graduate/Professional PLUS Loans;

♦ Federal Insured Student Loans (FISLs);and

♦ Federal Perkins Loans. (Please note that Federal Perkins Loanshave 

separate cohort default rate calculations.)

Federal Consolidation Loans and Federal Direct Consolidation Loans are not 

directly included in the cohort default rate calculation. However, the status of 

a consolidation loan may affect the cohort default rate calculation. Please

refer to the section of this chapter entitled, “How do consolidation loans 

affect the numerator of the cohort default rate calculation?” for more 

information on how consolidation loans may affect the cohort default rate 

calculation.

How does the Department calculate a school’s cohort default 

rate?

The formula the Department uses for calculating a school’s cohort default 

rate depends on the number of borrowers from that school entering 

repayment in a particular cohort fiscal year and the number of cohort default 

rates previously calculated for the school. Note that cohort default rates are 

based on the number of borrowers who enter repayment, not the number of 

loans that enter repayment. A borrower with multiple loans from the same 

school whose loans enter repayment during the same cohort fiscal year will 

be included in the formula only once for that cohort fiscal year.

Page 2.1 - 3

Loans included 

in default rate 

calculation:

• Federal

Stafford

• Direct

Stafford/Ford

NOT Included:

• PLUS

• Perkins

• FISL

Regulatory 

citations:

34 CFR 668.200

34 CFR 668.202

The cohort default 

rate is based on 

the number of 

borrowers 

entering 

repayment, not 

the number of 

loans entering 

repayment.
The two types of formulas used to calculate a school’s cohort default rate are the NonAverage Rate Formula and the Average Rate Formula. For each of these formulas, the cohort 

default rate is obtained by dividing the numerator by the denominator and then expressing 

the result as a percentage. The borrowers included in the numerator and the denominator 

varies, depending on the type of formula used.

Calculation of non-average cohort default rates

Cohort 

Fiscal 

Year

Year 

Published

Borrowers in the Numerator

Borrowers in the Denominator

3-Yr Time Period

(Numerator)

1-Yr Time Period 

(Denominator)

2016 2019 Borrowers who entered repayment in 2016 

and defaulted in 2016, 2017 or 2018

Borrowers who entered repayment in 2016

10/01/2015 to 9/30/2018

10/01/2015 to 9/30/2016

2017 2020 Borrowers who entered repayment in 2017 

and defaulted in 2017, 2018 or 2019

Borrowers who entered repayment in 2017

10/01/2016 to 9/30/2019

10/01/2016 to 9/30/2017

2018 2021 Borrowers who entered repayment in 2018 

and defaulted in 2018, 2019 or 2020

Borrowers who entered repayment in 2018

10/01/2017 to 9/30/2020

10/01/2017 to 9/30/2018

2019 2022 Borrowers who entered repayment in 2019 

and defaulted in 2019, 2020 or 2021

Borrowers who entered repayment in 2019

10/01/2018 to 9/30/2021

 10/01/2018 to 9/30/2019

2020 2023 Borrowers who entered repayment in 2020 

and defaulted in 2020, 2021 or 2022

Borrowers who entered repayment in 2020

10/01/2019 to 9/30/2022

 10/01/2019 to 9/30/2020

The chart (above) outlines the timeframes used when calculating cohort default rates for schools with 30 or more borrowers in 

repayment for the cohort fiscal years 2016 through 2020. This chart does not address average rate cohort default rates 

(calculated for schools having less than 30 borrowers entering repayment during the cohort fiscal year. See discussion below 

in box entitled “Average Rate Formula”). The first column in the table shows the cohort fiscal year. The second column shows 

the year the cohort default rate will be published. The third column shows the borrowers included in the cohort default rate 

calculation for that cohort fiscal year. The fourth column shows the time periods used for the numerator and the denominator 

listed in the third column.

Borrowers in the denominator in the third column are those who entered repayment during the time period shown in the 

denominator in the fourth column (i.e., the cohort fiscal year). Borrowers in the numerator are those who, having entered 

repayment during the cohort fiscal year, defaulted or met the other specified condition during the time period shown in the 

numerator in the fourth column.

In a mathematical formula, the numerator is always listed first and the denominator listed second; the mathematical formulas in 

this Guide will be written this way. However, in the text of this Guide the denominator will always be discussed before the 

numerator is discussed. This is because the numerator is a subset of the denominator in all of the formulas contained in this 

Guide.

Page 2.1 - 4
Which formula does the Department use to calculate a 

school’s DRAFT cohort default rate?

The Department always uses the non-average rate formula for calculating a 

school’s draft cohort default rate. In contrast to an official average rate, the 

draft rate is based only on a school’s most recent cohort fiscal year data (the 

number of borrowers from that school entering repayment in that cohort fiscal 

year and the number of borrowers defaulting or meeting other specified 

condition during the associated cohort default period). Therefore, schools with 

29 or fewer borrowers entering repayment cannot use the draft rate to 

anticipate their official (average rate) cohort default rate. Schools with 29 or 

fewer borrowers entering repayment must perform a manual calculation using 

the average rate formula to anticipate their official cohort default rate.

Which formula does the Department use to calculate a 

school’s OFFICIAL cohort default rate?

The Department uses the non-average rate formula or the average rate 

formula to calculate a school’s official cohort default rate, depending on the 

number of borrowers entering repayment.

An official cohort default rate cannot be calculated for a school with 29 or fewer 

borrowers entering repayment during a cohort fiscal year if the school did not have an 

official or unofficial rate calculated for either or both of the 2 previous cohort fiscal 

years. Such a school will have an unofficial rate calculated using the non-average 

formula and current year data. Unofficial rates don’t meet the statutory definition for 

cohort default rates and cannot be used to determine sanctions and benefits.

Page 2.1 - 5
Average Rate Formula

The Average Rate Formula is used to calculate the official cohort default rate for a school with 

29 or fewer borrowers entering repayment during a cohort fiscal year if that school had a cohort 

default rate calculated for the two previous cohort fiscal years.

Average Rate Calculation: The denominator for the average cohort default rate is the number of 

borrowers who entered repayment in the current cohort fiscal year and the two preceding 

cohort fiscal years. The numerator for the average cohort default rate is the number of 

borrowers who entered repayment in the current cohort fiscal year or either of the two 

preceding cohort fiscal years and who defaulted or met the other specified condition in the 

cohort default period for the cohort fiscal year in which they entered repayment.

Average Rate Example: School B, a degree-granting school, certified loans for the following 

students: 29 borrowers who entered repayment in the current cohort fiscal year (of whom 2 

defaulted in that cohort default period), 44 borrowers who entered repayment in the fiscal year 

immediately preceding the current cohort fiscal year (of whom 7 defaulted in the associated 

cohort default period), and 50 borrowers who entered repayment in the fiscal year two years 

prior to the current cohort fiscal year (of whom 3 defaulted in the associated cohort default 

period). The 123 borrowers (29 + 44 + 50 = 123) who entered repayment in these three fiscal 

years constitute the denominator. The numerator consists of the 12 borrowers (2 + 7 + 3 = 12) 

who defaulted in the relevant cohort default periods. School B’s cohort default rate is calculated 

by dividing 12 by 123 (12 ÷ 123 = 0.097) and expressing the result (0.097) as a percentage to 

produce an average cohort default rate of 9.7 percent (0.097 x 100 = 9.7).

12 ÷ 123 = 9.7%

Page 2.1 - 6

Numerator: Number of borrowers in 

the denominator who defaulted or 

met the other specified condition 

during the cohort default period

Cohort 

Defaul

t Rate

Denominator: Number of borrowers 

who entered repayment in the 

current cohort fiscal year and the

two preceding fiscal year
Page 2.1 - 7

8 ÷ 90 = 8.8%

Non-Average Rate Example: School A, a degree-granting school, had 90

borrowers enter repayment in the cohort fiscal year (denominator). Of those, 

8 borrowers defaulted in the cohort default period (numerator). School A’s 

cohort default rate is calculated by dividing 8 by 90 (8÷90 = 0.088) and 

expressing the result (0.088) as a percentage to produce a non-average 

cohort default rate of 8.8 percent (0.088 x 100 = 8.8).

Non-Average Rate Formula

The Non-Average Rate Formula is used for a school with 30 or more borrowers 

entering repayment during a cohort fiscal year.

Non-Average Rate Calculation: For this calculation, the denominator is the 

number of borrowers who entered repayment in the cohort fiscal year; the 

numerator is the number of borrowers who entered repayment in the cohort 

fiscal year and who defaulted or met the other specified condition in the 

cohort default period.

Denominator: Number of 

borrowers who entered 

repayment in the cohort fiscal 

year

Cohort 

Default 

Rate

Numerator: Number of borrowers 

in the denominator who defaulted 

or met the other specified 

condition during the cohort 

default period
Which borrowers are placed in the denominator of the cohort default 

rate calculation?

Borrowers are included in the denominator of the cohort default rate calculation based on 

when their loans entered repayment. Except for an average cohort default rate calculation, 

borrowers included in the denominator of a cohort default rate calculation are the 

borrowers with relevant loans that entered repayment during that cohort fiscal year.

Borrowers included in the denominator of an average cohort default rate calculation are the 

borrowers who entered repayment on relevant loans during that cohort fiscal year or the 

prior two fiscal years.

A Federal Stafford Loan or Direct Stafford/Ford Loan enters repayment under the 

requirements applicable to the type of loan. In most cases, they enter repayment after a 6-

month grace period that begins when the borrower separates (graduates or withdraws) 

from school or drops below half-time enrollment. The official repayment date is the first day 

following the end of the 6-month grace period (see example below). Use of this date is 

dependent on the school providing notification as soon as possible, as mandated by 

regulations of any change in a student’s enrollment status to National Student Loan Data 

System (NSLDS) or the data manager. If the school does not provide notification, the data 

manager will use the best information available to determine the repayment date. This date 

will be used for purposes of calculating the school’s cohort default rate.

Kecia Hernandez graduated on May 15, 2017

Which borrowers are placed in the numerator of the cohort default rate 

calculation?

Borrowers must be included in the denominator of the cohort default rate calculation in 

order to be included in the numerator of the cohort default rate calculation. A FFEL or Direct 

Loan borrower is included in the numerator if the borrower defaults during the cohort 

default period or meets the other specified condition defined previously in this chapter.

For cohort default rate purposes, a FFEL that is not purchased by the Department is 

considered to be in default only if the guaranty agency has paid a default claim to thelender 

holding the loan. The claim paid date, which is the date the guaranty agency reimburses the 

lender for the defaulted loan, is used to determine if the borrower will be placed in the 

numerator of the calculation. If the claim paid date falls within the cohort default period, 

the borrower is included in both the denominator and numerator of the cohort default rate 

calculation.

For cohort default rate purposes, a Direct Loan, or a FFEL that has been purchased by the 

Department, is considered to be in default after 360 days of delinquency. If the default date 

falls within the cohort default period, the borrower will be included in both the 

denominator and the numerator of the cohort default rate calculation.

Page 2.1 - 8

Repayment Date= 11/16/2017 putting her in the FY 2018cohort fiscal year

LDA= 5/15/2017 Grace Period= 6 months Repayment Begins on the first day after grace 

period has ended
How do consolidation loans affect the numerator of the 

cohort default rate calculation?

Although Federal Consolidation Loans and Direct Consolidation Loans are not 

directly included in the cohort default rate calculation, a defaulted 

consolidation loan may cause a borrower to be included in the numerator of 

the cohort default rate calculation. This occurs if the consolidation loan 

defaults within the cohort default period that is applicable to the underlying 

loan(s).

For example, Elizabeth entered into repayment on several Direct 

Stafford/Ford Loans in January of the cohort fiscal year. Because Elizabeth

entered into repayment in January, she will be included in the denominator 

of the cohort default rate calculation. After entering into repayment on the 

Direct Stafford/Ford Loans, Elizabeth elects to consolidate the loans into a 

Direct Consolidation Loan. Elizabeth fails to make payments on the Direct 

Consolidation Loan and the loan defaults in June of the following calendar 

year. Even though the underlying Direct Stafford/Ford Loans did not default, 

Elizabeth will be included in the numerator of the cohort default rate 

calculation because the Direct Consolidation Loan defaulted during the 

cohort default period.

How does loan rehabilitation affect the numerator of the 

cohort default rate calculation?

Student loan rehabilitation is a method by which a borrower may resolve the 

status of defaulted loans. Prior to July 1, 2006, a borrower who wanted to 

rehabilitate a defaulted loan was required to make 12 consecutive monthly 

payments on the loan. Effective on July 1, 2006, a borrower who wants to 

rehabilitate a defaulted loan must make 9 payments, each within 20 days of 

the due date, during a period of 10 consecutive months. The 9 payments in 

10 months standard must be incorporated in the data manager’s loan 

rehabilitation agreement with the borrower.

Once the borrower has made the required payments* under the terms ofthe 

agreement, the loan is then rehabilitated and the borrower is no longer 

considered to be in default. For cohort default rate calculation purposes, if 

the borrower rehabilitates the loan before the end of the cohort default 

period, the borrower is not included in the numerator because the borrower 

is no longer considered to be in default. If the borrower rehabilitates the 

loan after the end of the cohort default period, the borrower is considered in 

default for cohort default rate purposes and is included in the numerator.

Page 2.1 - 9

*In accordance 

with: Sections 

428F(a) and

435(m)(2)(C)

of the HEA and 

34 CFR 682.405

(for FFELs) and 

Section 

455(a)(1) of

the HEA and 

34 CFR

685.211(f)

(for Direct 

Loans)
What special circumstances affect whether a borrower will be included 

in the cohort default rate calculation?

The following tables outline some examples of special circumstances that affect the cohort 

default rate calculation. For convenience, these examples have been divided into four 

categories:

♦ Special circumstances involving schools (e.g., borrower takes out loans at more thanone 

school).

♦ Special circumstances involving repayment (e.g., borrower consolidates defaultedloans, 

pays loans in full before entering repayment, etc).

♦ Special circumstances involving loans that were discharged, canceled, or refunded (e.g., 

loan was discharged before repayment).

♦ Special circumstances involving loans that were repurchased (e.g., lenderrepurchases 

loan because it incorrectly submitted default claim to guaranty agency).

These special circumstances only affect the cohort default rate calculation if the school 

submits documentation of the special circumstance to the data manager. To use these 

tables, read down the left side column until you find an applicable situation, then read 

across to see how the cohort default rate calculation is affected.

A school with a high default rate may lose its eligibility to participate in 

Federal Student Aid programs. See Chapter 2.4, “Cohort Default Rate

Effects,” for more information on effects.

DRAFT rates are generally sent to schools in February.

OFFICIAL rates are sent by September 30th.

See Chapter 2.2, “How Schools Get the Rates & Loan Data,” for more 

information on the release of the rates.

Page 2.1 - 10
Special Circumstances Involving Schools

Situation How It Affects the 

Denominator

How it Affects the 

Numerator

A borrower separates 

from the school that 

disbursed the loans but 

enrolls at that school or 

a different school 

before the end of the 

grace period.

The borrower is included in the 

cohort fiscal year when the 

borrower actually enters 

repayment. If the date a 

borrower enters repayment is 

delayed by the borrower reenrolling in school, then the 

borrower’s inclusion in a cohort 

default rate calculation will also 

be delayed.

The borrower is included if the

borrower defaulted or met the 

other specified condition during 

the cohort default period.

A borrower obtained 

more than one loan to 

attend a school and the 

repayment dates for 

each of the loans fall 

into different cohort 

fiscal years.

The borrower is included in the 

cohort fiscal years when the 

borrower entered repayment. 

The borrower will appear in two 

different cohort default rate 

calculations for the same school 

if the borrower has two loans 

that enter repayment in different 

cohort fiscal years.

The borrower is included if the 

borrower defaulted or met the 

other specified condition during 

the relevant cohort default 

periods. The borrower will 

appear in different cohort 

default rate calculations for the 

same school if the borrower 

has multiple loans, enters 

repayment in separate cohort 

fiscal years, and defaults or 

meets the other specified 

condition during those cohort 

default periods.

A borrower takes out 

loans at more than one 

school.

The borrower is included in the 

cohort fiscal years when the 

borrower entered repayment for 

each school where the borrower 

obtained loans.

The borrower is included for 

the schools at which the loans 

were obtained if the borrower 

defaulted or met the other 

specified condition during 

those cohort default periods.

A school, its owner, its 

agent, contractor, 

employee, or another 

entity or individual 

associated with the 

school makes a 

payment on the 

borrower’s loan in 

order to avoid default 

during the cohort 

default period.

The borrower is included in the 

cohort fiscal year when the 

borrower entered repayment.

The borrower is included 

because the loan meets the 

other specified condition during 

the cohort default period.

Page 2.1 - 11
Special Circumstances Involving Repayment

Situation How It Affects the 

Denominator

How it Affects the 

Numerator

The borrower enters repayment 

and subsequently obtains a 

deferment or forbearance on 

the loan.

The borrower is included in the 

cohort fiscal year when the 

borrower entered repayment. 

Deferments or forbearances do 

not alter the date the borrower 

entered repayment.

The borrower is 

included if the borrower 

defaulted or met the 

other specified 

condition during the 

cohort default period.

A borrower consolidates one or 

more defaulted loans.

The borrower is included in the 

cohort fiscal years when the 

borrower entered repayment on 

the underlying loans (the loans 

that the borrower consolidated), 

not based on the date that the 

consolidation loan entered 

repayment.

Even though the 

borrower has regained 

eligibility for Title IV 

funds by consolidating, 

the borrower is still 

considered to be in 

default for the purpose 

of calculating the

school’s cohort default 

rate.

A borrower requested and was 

granted a revised repayment 

schedule that started before the 

date the borrower was originally 

scheduled to enter repayment.

The borrower is included in the 

cohort fiscal year when the 

early repayment schedule 

begins. The early repayment 

date becomes the repayment 

date.

The borrower is 

included if the borrower 

defaulted or met the 

other specified 

condition during the 

cohort default period.

A borrower paid the loan in full 

before the date the loan was 

scheduled to enter repayment.

The borrower is included in the 

cohort fiscal year that the 

borrower paid the loan in full. 

The paid-in-full date becomes 

the new repayment date.

The borrower is not 

included because the 

borrower did not 

default, unless the loan 

was paid in full through 

a consolidation loan 

and the consolidation 

loan defaults during the 

cohort default period.

A borrower paid the loan in full 

after defaulting or meeting the 

other specified condition during 

the cohort default period but 

without rehabilitating the loan 

within the cohort default period.

The borrower is included in the 

cohort fiscal year when the 

borrower entered repayment.

The borrower is 

included because the 

loan was not 

successfully 

rehabilitated for cohort 

default rate purposes 

within the cohort

default period.

Page 2.1 - 12
Special Circumstances Involving Loans That Were 

Discharged, Canceled, or Refunded

Situation How It Affects the 

Denominator

How it Affects the 

Numerator

The borrower’s loan was discharged 

due to bankruptcy, death, disability, or 

other type of loan discharge (not 

including closed school, false 

certification, or identity theft) before the 

borrower entered repayment.

The borrower is included in 

the cohort fiscal year based 

on the date the loan was 

discharged. The date of 

discharge becomes the date 

entered repayment.

The borrower is not 

included because the 

borrower did not default.

The borrower’s loan was discharged 

due to bankruptcy, death, disability, or 

other type of loan discharge (not 

including closed school, false 

certification, or identity theft) after the 

borrower enters repayment but before 

the end of the cohort default period and 

before the borrower defaults or meets 

the other specified condition.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is not 

included because the 

borrower did not default.

The borrower enters repayment and 

defaults or meets the other specified 

condition during the cohort period. 

Subsequently, the loan is discharged 

due to bankruptcy, death, disability or 

other type of loan discharge.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is included 

because the borrower 

defaulted or met the other 

specified condition during 

the cohort default period.

The borrower’s loan was discharged 

due to school closure, false 

certification, and/or identity theft.

The borrower is not included 

because loans discharged 

due to school closure, false 

certification, and/or identity 

thefts are not included in the 

cohort default rate 

calculation.

The borrower is not 

included because loans 

discharged due to school 

closure, false certification, 

and/or identity thefts are 

not included in the cohort 

default rate calculation.

A loan was fully refunded or canceled, 

within 120 days of loan disbursement.

The borrower is not included 

because canceled loans are 

not included in the cohort 

default rate calculation.

The borrower is not 

included because 

canceled loans are not 

included in the cohort 

default rate calculation.

The loan was partially refunded within 

120 days of loan disbursement.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment on the portion of 

the loan that was not 

refunded.

The borrower is included 

if the borrower defaulted 

or met the other specified 

condition during the 

cohort default period.

The borrower dies after the borrower’s 

loans enter repayment before the end 

of the cohort default period and before 

the borrower defaults or meets other

specified condition.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is not 

included because the 

borrower died before 

going into default.

Page 2.1 - 13
Special Circumstances Involving Loans That Were Repurchased

Situation How It Affects the 

Denominator

How it Affects the 

Numerator

A lender repurchased a defaulted 

loan because the guaranty 

agency determined that the 

lender did not meet the insurance 

requirements and, as a result, the 

loan lost insurance and became 

an uninsured loan.

The borrower is not included 

because uninsured loans are 

not included in the cohort

default rate calculation.

The borrower is not included 

because uninsured loans are not 

included in the cohort default 

rate calculation.

A lender immediately 

repurchased a loan because the 

lender incorrectly submitted the 

default claim to the guaranty 

agency and does not submit 

another default claim within the 

cohort default period.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is not included 

because the borrower is not in 

default.

A lender immediately 

repurchased a loan because the 

lender incorrectly submitted the 

default claim to the guaranty 

agency and later submits another 

default claim that is paid within 

the cohort default period.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is included 

because the subsequent default 

claim was paid within the cohort 

default period.

A lender made a courtesy 

repurchase of a defaulted loan 

because the borrower 

established a new repayment 

plan or for other reasons.

The borrower is included in 

the cohort fiscal year when 

the borrower entered 

repayment.

The borrower is included 

because the original valid default 

claim was paid during the cohort 

default period.

Page 2.1 - 14
Effects of Corrected Data on Cohort Default Rate Calculations

How changes in data due to adjustments/appeals are reflected in the Cohort Default Rate calculation.

If the 

Department:

... and the 

borrower has no 

other loans 

included in the 

cohort default 

rate calculation:

... and the 

borrower has 

other loans that 

are not in default 

included in the

cohort default 

rate calculation:

... and the 

borrower has 

other loans that 

are in default 

included in the

cohort default 

rate calculation:

Adds a defaulted +N +N No effect.

Regardless of 

circumstance, if the 

borrower has other 

loans in default, the 

borrower is already 

included in both the 

numerator and 

denominator

loan... + B +D

Subtracts a

defaulted loan... - B -N

-D -N

Adds a nondefaulted loan... +D No effect.

Subtracts a non- -D No effect.

defaulted loan...

Changes a

defaulted loan to 

a non-defaulted -N -N

loan...

Changes a nondefaulted loan to 

a defaulted loan...

+N +N

Legend:

+ D Increase Denominator by one.

+ N Increase Numerator by one.

+ B Increase Denominator and Numerator by one.

- B Decrease Denominator and Numerator by one.

- D Decrease Denominator by one.

- N Decrease Numerator by one.

Page 2.1 - 15
1

2.2 How Schools Get Cohort Default 

Rates And Loan Data

Electronic Cohort Default Rate Process
For more 

information 

on 

Provisional 

Certification 

please see 

668.13(c)

When are cohort default rates sent to schools?

The U.S. Department of Education (the Department) calculates cohort default rates twice 

each year. Generally, the Department sends draft cohort default rates to schools in February. 

After schools receive their draft cohort default rate data, schools are provided an 

opportunity to identify and correct any inaccuracies by submitting an incorrect data 

challenge. Schools also have the opportunity to challenge a potential loss of eligibility or 

potential placement on provisional certification by submitting a participation rate index 

challenge.

The Department then calculates and releases the official cohort default rates. Official cohort 

default rates are generally released to schools and the public approximately six months after 

the release of the draft cohort default rates. Official cohort default rates must be releasedno 

later than September 30th each year.

Who receives cohort default rate information?

The Department provides draft cohort default rates to schools only and does not release 

individual school rates to the public. The Department provides official cohort default rates to 

schools and also makes them available to the public. The Department sends draft and official 

cohort default rates to all schools that the Department’s records indicate:

♦ are eligible to participate in any of the Title IV programs and

♦ have had a borrower in repayment in the current or any of the past cohort default rate 

periods and

♦ are enrolled in the electronic cohort default rate notification process

Those schools that have never had a borrower enter repayment on a Federal Family 

Education Loan (FFEL) Program and/or William D. Ford Federal Direct Loan (Direct Program) 

Program loan will not receive a cohort default rate package.

How does the Department send cohort default rate information to 

schools?

The Department electronically transmits cohort default rate (eCDR) notification packages to 

all schools foreign and domestic, using the Student Aid Internet Gateway (SAIG) destination 

point administrator (DPA) designated by the school. All schools are allowed five business 

days to report any problems with the electronic transmission of their eCDR packages.

Timelines for submitting challenges, adjustments, and appeals begin on the sixth business 

day following the announced transmission date, as posted on the Department’s Information 

for Financial Aid Professionals (IFAP) website. For the instructions to enroll in the eCDR 

notification process, please click on the link provided.

What is included in the eCDR package?

Each eCDR package will include a cover letter, a Loan Record Detail Report (LRDR), and an 

extract-type LRDR. Schools should review the LRDR carefully to ensure that the loan data 

used to calculate the rates is accurate. (See Chapter 2.3 “Reviewing the Loan Record Detail 

Report.”)

Page 2.2 - 2
To obtain an NSLDS User ID, contact CPS/SAIG Technical Support 

at 1-800-330-5947. For NSLDS password assistance, contact 

NSLDS Customer Service at 1-800-999-8219.

The extract-type LRDR can be opened in spreadsheet or database software, 

which may expedite and simplify your participation in any or all of the 

challenge, adjustment, and appeal processes and with default prevention 

activities.

Schools that have previous borrowers entering repayment on Subsidized or 

Unsubsidized Stafford loans, but who have no borrowers in any of the three 

most recent cohort periods, will only receive a header and trailer sheet for 

the LRDR. If a school is subject to loss of eligibility because of three 

consecutive years of a cohort default rate that exceeds the relevant threshold 

as discussed in Chapter 2.4, the school will receive LRDRs for the current and 

prior two cohort fiscal years. Similarly, if a school’s official cohort default rate 

is an average rate, it will receive LRDRs for the current and prior two cohort 

fiscal years.

 Cohort fiscal years included in package

When a school 

receives a:

The Department 

will provide the:

Draft cohort default rate Most recent LRDR for the draft 

cohort default rates

Official, non-average cohort 

default rate that does not exceed 

relevant thresholds.

Most recent LRDR for the official 

cohort default rates

Official cohort default rate that 

exceeds the relevant threshold as 

discussed in Chapter 2.4 for three 

consecutive years

Three most recent LRDRs for the 

official cohort default rates

Average official cohort default rate Three most recent LRDRs for the 

official cohort default rates

NOTE: If a school receives a LRDR for a previous cohort fiscal year, the 

LRDR will not reflect any changes that the Department agreed to as a 

result of a previous adjustment and/or appeal. The school must refer to 

the adjustment and/or appeal determination letter for information on 

cohort default rate changes.

How does a school request a copy of the LRDR from NSLDS? 

All schools, foreign and domestic, that have an NSLDS User ID can request an 

electronic LRDR using the National Student Loan Data System (NSLDS)

Website.

Page 2.2 - 3

The official cohort default rates are available to the public through a searchable database at: 

www.ed.gov/FSA/defaultmanagement/cdr.html

This Web page also includes an option to download the entire list of default rates and/or the 

list of schools that are subject to sanction.

Please see: 

CFR 668.204

CFR 668.205

The Department has 

created a new LRDR 

import tool to assist 

in importing the 

extract-type LRDR to 

an excel spreadsheet. 

The new LRDR 

Import Tool is 

located on the 

Default Management 

Web site under the 

Financial Aid

Professionals section. 

Contact NSLDS at 1-

800-999-8219 for

assistance with this 

tool.
A school may request a LRDR only for their entity. A school may not request a LRDR for 

another school. Schools should go to the NSLDS “Report” tab and request the report 

number for “DRC035, School Cohort Default Rate History Report. Once the request has been 

made, the LRDR is delivered to the SAIG mailbox associated with the NSLDS User ID that made the 

request.

There are two types of NSLDS User IDs: an online services User ID and an online services and 

batch User ID. Because both User IDs have SAIG mailboxes, both can be used to request an 

electronic LRDR. However, if the online services User ID is used, the LRDR will be placed in 

the mailbox associated with that User ID and not in the mailbox associated with the online 

services and batch User ID.

When may a school request a copy of the LRDR?

A school may request a copy of the LRDR for its reference at any time after the draft or 

official rates have been released. However, if a school did not receive a LRDR and it intends 

to submit a cohort default rate challenge, adjustment and/or appeal, the school must 

request the LRDR and submit the cohort default rate challenge, adjustment and /or appeal 

by the relevant timeframe associated with the challenge, adjustment and /or appeal (see 

relevant section of Chapter 4 for challenge, adjustment and / or appeal timeframes).

What LRDR data is sent to a school that has been involved in a change of 

status?

A school involved in a change in status will receive LRDR that includes the other schools 

involved in the change of status after the change occurred.

Once a change in status occurs, any of the schools whose cohort default rates are affected 

by the change in status can request a LRDR which includes all the data for any of the other 

schools whose borrowers are included in its cohort default rates as a result of the change in 

status. A school can request an electronic LRDR, in either format, by going to the NSLDS and 

requesting and downloading the files. For assistance with requesting your LRDR, please 

contact NSLDS at 1- 800- 999-8219 or send an email to NSLDS@ed.gov.

Further, after a change in status, a school may submit a challenge, adjustment, or appeal 

based on the data for another school’s borrowers, under the same requirements that would 

be applicable to the other school, if the loans for those borrowers affect the school’s cohort 

default rate.

See Chapter 2.5, “Change in Status and Evasion,” for more information about changes in 

status.

Page 2.2 - 4
2.2.2 How to Request an Electronic 

LRDR from NSLDS

A continuation of chapter 2.2
How to Request an Electronic LRDR from NSLDS

Step 1:

Log on to the National Student Loan Data System 

(NSLDS) website by entering the FSA User ID and 

password and clicking “Logon.”

Step 2:

Read the Privacy Act statement and confirm that 

you are an authorized user of NSLDS and that 

you will adhere to the Privacy Act by clicking “I

Agree.”

Step 3:

Once logged on to NSLDS, select the “Report” tab 

from the main menu at the top of the screen.

The OPE ID that is associated with the NSLDS 

user ID will appear.

Step 4:

Under the “Report” tab, click on the blue box 

under the Report ID column that reads,“DRCO 

35, School Cohort Default Rate Hist Rpt.”

Step 5:

Select either “Extract” or “Report” under the 

“Type” option and either Comma Delimited or 

Standard under the “Extract Type”. This will 

determine the format of the file that is provided. 

An extract allows a school to query the cohort 

default rate data based on the school’s needs. A 

report is representative of the hardcopy Loan 

Record Detail Report (LRDR) and can be accessed 

using standard word processing software.

Step 6:

Select the “Sort By” option. This option will 

determine the order of the borrowers ifthe 

school elects to receive a report file.

However, an option must be entered even ifthe 

school has requested an extract file.

• The selection “SSN” will sort the borrowers 

in Social Security Number (SSN) order.

• The selection “CLAIM CODE, SSN” willsort 

the borrowers by claim reason code and 

then by SSN.

• The selection “LOAN STATUS, SSN” will sort 

the borrowers by loan status code and then 

by SSN.

Step 7:

Place checkmarks in the “Select” column beside 

the cohort fiscal year and cohort default rate type 

(draft or official) for each of the reports or extracts 

requested.

A user can select multiple cohort fiscal years and 

cohort default rate types. However, if the user 

wants to request both extracts and reports, the 

user must first complete one type of request 

before the second type of request can be made.

If one of the following codes appears in the 

“Select” column, the loan record detail report 

request will not be made:

NA. This code indicates that the LRDR cannot be 

requested through the website. These loan record 

detail reports must be requested through Default 

Management. If this code appears, a link to Default

Management’s email address will also appear.

UC. This code indicates that the requesting 

school (the school with the OPE ID associated 

with the FSA User ID) is involved in a change of 

status and its cohort default rates are combined 

with some other school’s cohort default rates. 

The requesting school cannot obtain the LRDRs 

for the other school’s cohort default rates 

through the website. These LRDRs must be 

requested through Default Management. If this 

code appears, a link to Default Management’s 

email address will also appear.

UR. This code indicates that another NSLDS user 

has already requested this LRDR.

Step 8:

Click “Submit” to enter the request. Only one 

request may exist at a time. A request exists until 

the LRDR is delivered. Once the LRDR is delivered, 

a new request can be made.

Step 9:

Verify that the information is correct and click 

“Confirm.”

Step 10:

A message will appear indicating the request was 

successfully submitted.

After completing these steps, a school can return to 

Step 5 and select the other option if the school so 

wishes. That is, a school that selects “Extract” at Step 5 

can return to that step and then select “Report.”

* If the user selects a cohort default rate that has 

been calculated as an average rate, the user will 

automatically receive the LRDRs for the three 

cohort fiscal years that were used to calculate the 

cohort default rate.

Page 2.2.2 - 2
Using EDCONNECT to Retrieve Files Requested from NSLDS

Step 1:

Before downloading the electronic LRDR 

from the SAIG mailbox, ensure the ID you 

used when logging on to the NSLDS website 

is set up in the EDconnect software (see 

sidebar).

Step 2:

Log onto the EDconnect software using the 

User ID associated with the NSLDS User ID 

that made the request for the electronic 

loan record detail report.

Step 3:

Select Now from the Transmission menu.

Step 4:

Once EDconnect has finished processing the 

Transmission Now request, select “Mailbox 

Query” from the New option on the File 

menu.

Step 5:

EDconnect will provide a list of those files 

that are available for download. From the 

list of files available to be downloaded, 

identify the electronic LRDR that was 

requested.

The electronic LRDRs will be listed using 

SAIG message classes. The message classes 

for the electronic LRDRs consist of eight 

characters:

4SHCDREOP for extract files 

4SHCDRROP for report files 

CDRCSVOP for Comma Delimited

Step 6:

Place a check mark in the Move to TQ 

column, next to the message class 

associated with the requested electronic

LRDR.

Step 7:

Select Now from the Transmission menu. 

EDconnect will download the file to the 

designated directory. At this point, a school 

can rename the file prior to saving it. A 

school may wish to name a file for the date 

the file was downloaded.

Step 8:

Access the file.

Requests for an average rate will have three cohort fiscal years of data in the message class.

If you have questions about the SAIG mailbox, setting up your SAIG user ID, or down-loading files, contact CPS/SAIG Technical Support at 1-800-330-5947.

Page 2.2.2 - 3
1

2.3 Reviewing the Loan Record 

Detail Report

Understanding The CDR Calculation Process
What is a loan record detail report (LRDR)?

A LRDR contains information on the loans that were used to calculate a school’s draft or 

official cohort default rate. The LRDR lists a school’s Federal Family Education Loan (FFEL) 

and/or William D. Ford Federal Direct Loan (Direct Loan) activity, including but not limited to:

♦ the number of borrowers who entered repayment during a given fiscal year, and

♦ the loan status of those borrowers.

Note that the information on the LRDR includes loan information that the schools and 

data managers have submitted to the National Student Loan Data System (NSLDS).

Why should a school review the LRDR for the DRAFT cohort default rates? 

Unless it is corrected, the draft cohort default rate data will be used to calculate the official 

cohort default rates. Therefore, it is important for the school to verify the accuracy of the

draft cohort default rate data before the official cohort default rates are calculated and

released. If the school does not challenge draft cohort default rate data that the school 

believes is incorrect, the school forfeits the right to submit certain types of adjustments and 

appeals when the official cohort default rates are released.

Why should a school review the LRDR for the OFFICIAL cohort default 

rates?

The Department uses the official cohort default rate to determine if a school is subject to 

sanction or eligible for benefits. If a school finds errors in the cohort default rate data, the 

school may be eligible to file an uncorrected data adjustment, new data adjustment, and/or 

erroneous data appeal. Therefore, it is important that a school review its LRDR for the official 

cohort default rates to verify the accuracy of the data used to calculate its official cohort 

default rate.

NSLDS receives regular updates from numerous data providers. As a result, a school’s LRDR for 

the draft cohort default rates may differ from its LRDR for the official cohort default rates due 

to the addition of new data or changes in the data. New data occurs when the loan data 

reported to NSLDS changes during the period between the draft cohort default rate 

calculation and the official cohort default rate calculation for the same cohort fiscal year.

New data can be identified by comparing the LRDRs for the draft and official cohort default 

rates for the same year and determining if any loan data is newly included, excluded, or 

changed in any manner. If new data appears in a school’s official cohort default rate 

calculation, the school may be eligible to submit an adjustment and/or appeal of its official 

cohort default rate based on allegations of new data errors.

Page 2.3 - 2

The LRDR is used to verify information such as “Date Entered Repayment,” 

and is the basis for:

• Incorrect data challenges (draft rates)

• Uncorrected data adjustments

• New data adjustments

• Erroneous data appeals
How does a school determine if there is inaccurate data on the LRDR?

A school should review the LRDR by comparing the school’s records to the 

information on the LRDR. A school can simplify this process by creating a 

spreadsheet or database using information from the school’s records. This 

Guide only discusses spreadsheets; a school should consult its technical staff to 

discuss database creation. It is important to note that a school does not need 

to wait until the release of the cohort default rates to create the school’s 

spreadsheet.

Type: School Records Spreadsheet:

A B C D E F G H I J K L

1

Borrower’s 

SSN

Borrower’s 

Name

Type 

of 

Loan

Loan 

Period

Loan 

Status

Enrollment 

Status 

Code

Enrollment 

Status Date

LDA or 

LTH

Date 

Entered 

Repayment

Default 

NegAm 

Date

Claim 

Reason 

Code

Comments

2 111-11-1111 Jonz, Shirley SF

09/01/2002-

05/24/2003 ID F 10/05/2003 N/A N/A N/A N/A

3 222-22-2222 Grady,Whitman SU

09/01/2002-

05/24/2003 RP G 05/24/2003 05/24/2003 11/25/2003 N/A N/A

Date / / Page of

A blank version of this spreadsheet is posted on the Default Management website.

Once the school has completed the spreadsheet, it should compare the 

spreadsheet to the LRDR, to the repayment information from NSLDS, or to 

information on data manager, lender, or loan servicer reports. The school 

should ask the following questions:

♦ Is each data element on the school’s spreadsheet the same as the 

corresponding element on the LRDR (if not, the data may be incorrectly 

reported)?

♦ Are there borrowers on the LRDR that are not on the school’s spreadsheet (if 

so, the borrowers may be incorrectly included)?

♦ Are there borrowers on the school’s spreadsheet that are not on the LRDR (if 

so, the borrowers may be incorrectly excluded)?

If there are differences between the school’s data and the data on the sources 

mentioned, the school should examine its records and the other sources (for 

example, the NSLDS borrower enrollment history) to determine the possible 

causes for each difference. If the school believes there is inaccurate data on 

the LRDR, it should contest the data.

Page 2.3 - 3
How does a school review its cohort default rate data?

The appropriate school office should compare the information in the LRDR for the draft cohort 

default rates to the school’s own records to ensure the accuracy of the data in the LRDR for 

the draft cohort default rates. The school office should correct any inaccuracies by submitting 

an incorrect data challenge.

The school should compare the LRDR for the official cohort default rates to both the school’s 

own records and to the LRDR for the draft cohort default rates. If the school submitted an 

incorrect data challenge, the school should review the data managers’ incorrect data 

challenge responses and compare these to the LRDR for the official cohort default rates.

Are the LRDRs subject to the Privacy Act?

Because LRDRs contain personal identification information about borrowers who received 

loans under the FFEL and Direct Loan programs, the Privacy Act of 1974 and the Family 

Educational Rights and Privacy Act (FERPA) apply to all cohort default rate loan data, including 

the LRDRs. State and local laws and regulations may also govern the use of this material.

Recipients must take appropriate steps to ensure that this material is used and discarded 

properly.

Page 2.3 - 4

See Chapter 2.4, “Cohort Default Rate Effects,” for more information about 

cohort default rate sanctions and benefits.

See Chapter 2.2, “How Schools Get the Rates and Loan Data,” for 

information on requesting a copy of the “Loan Record Detail Report.”
Organization ID – the 

school’s Office of 

Postsecondary 

Education 

Identification (OPEID) 

number.

U.S. DEPARTMENT OF EDUCATION

NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS)

RATE CALCULATION DATE: XX/XX/XX

PAGE NO: 1

Number of cohort fiscal years included in 

the cohort default rate calculation – always 

“1” for a draft LRDR. If the school 

qualifies for use of the average rate 

calculation, data from three cohort fiscal 

years will be used, and a “3” will be shown 

on the official LRDR.

Program Type –

FFEL, Direct, or 

Dual

Date cohort default rate 

was calculated – note that 

all dates on the LRDR are 

listed in MM/DD/CCYY 

format.

MM=month DD=day

Specifies whether the 

LRDR is a draft or official 

cohort draft rate and 

indicates whether it was 

generated for a school or

data manager.

Cohort 

Fiscal Year

School Name 

and Address

Loan Record Detail Report: Reader-Friendly Format

TIP: Follow these steps to print your LRDR report in a more easily read 

format after the file is returned through the SAIG and saved to a PC:

1. Open Microsoft Word and then open your file.

2. Click Edit, then Select All in the Menu bar.

3. Click Format, then Font in the Menu bar.

4. In the Font dialog box, change the font size to 8 and the 

style to Courier New. Then click Ok.

5. Click File, then Page Setup. Select the Margins tab.

6. Change the margins to:

• Top = 1"

• Bottom = 1"

• Left = 0.7"

• Right = 0.7"

• Gutter = 0"

7. Click the Paper Size tab. Select the Landscape radio 

button.

8. Click Ok.

TITLE SECTION (Top of each page of LRDR)

COHORT YEAR XXX OFFICIAL LOAN RECORD DETAIL REPORT (SCHOOL)

Attention: Alexander Peachum Organization ID Number: 999999

Name: Graphic Tech

Address: 9765 Arts Lane

City: Coral City State: Iowa

Country: United States Postal Code: 12345 Program Type: FFEL Years: 1

Page 2.3-5
Attent

0001-01- CHAR JIM K 06/30/197 00XXXXX 09/01/199 05/30/200

SS

1

Last Name First/M.I Begin Date

Original 

D.O. School End Date

Academic 

Level

al Balance) 

al Balance)

1 Codes only) 

sage 1 Codes)

ative Amortization Only) 

neration Date: XX/XX/05

umerator/Denominator,

U.S. DEPARTMENT

8888888888 9999999999 SF RP 00/00/0000 10/31/2002 $ 2,625 667 09/02/1999 W 12/31/2001 D FD

0001-01-0001 CHARM JIM K 06/30/1977 00XXXXXX 09/01/2000 04/30/2001 3

8888888888 9999999999 SU RP 00/00/0000 10/31/2002 $ 5,500 667 08/21/2000 W 12/31/2001 E E

0002-01-0001 XU DENZEL A 10/01/1973 00XXXXXX 01/12/2000 05/12/2000 2

0101 0101 D1 DU IX 12/17/2003 11/02/2002 $ 3,500 0101 02/14/2000 W 05/10/2002 B DB

0003-00-0001 Jackson MARK R 10/29/1983 00XXXXXX 08/22/2002 05/09/2003 1

0101 0101 D1 DA 00/00/0000 06/14/2003 $ 2,625 0101 11/04/2002 W 12/13/2002 D DD FFEL 

DIRECT DUAL

TOTAL DOLLARS IN DEFAULT : 1,071,266 7,875 0 (Based on Outstanding Princip 

TOTAL DOLLARS IN REPAYMENT : 6,950,053 44,625 0 (Based on Outstanding Princip 

TOTAL INSURANCE CLAIM PAYMENTS: 0

************* = Not Available

-Actual Numerator Count : 134 Report Count : 134(B Usage 

Actual Denominator Count: 842 Actual Default Rate: 15.9 Report Count : 842(D & B U 

INDIVIDUAL PROGRAM TALLY: FFEL: 134/842 DIRECT: 3/20

Appealed Rate flag: N (D=Direct, I=Indirect, N=No Appeal, U=Unknown) IC: 0 (Neg

0 End of Loan Record Detail Report Report Ge

-Default Rate Usage 1: D=Denominator, B=Numerator/Denominator, N=Not Used, E=Eligible but not counted 

Default Rate Usage 2: FD=FFEL Denominator, FB=FFEL Numerator/Denominator, DD=Direct Denominator, DB=Direct N

IC=ICR (Negative Amortization Only), N = Not Used, E = Eligible but not counted 

Information Protected By the Privacy Act of 1974 As Amended

Page 2.3-6

BODY SECTION – LINE 1 BORROWER OF EDUCATION

NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS)

RATE CALCULATION DATE: XX/XX/XX

PAGE NO: 1

COHORT YEAR XXX OFFICIAL LOAN RECORD DETAIL REPORT (SCHOOL)

on: Alexander Peachum 

Graphic Tech 

9765 Arts Lane 

Coral City 

United States

Organization ID Number: 999999

Name: 

Address: 

City: 

Country:

State: Iowa 

Postal Code: 12345 Program Type: FFEL Years: 1

STUDENT CLASS

0 - LENDER/SVCR/HOLDER - -- Loan - Claim Rsn/ DEFAULT/

NegAm Date Repay Date

Guarantor/ Guaranty Enrollment Stat/ Usage

Originating Current Type Stat Code Amount Servicer Loan/Date Code Date 1 2

Beginning & Ending [Class] 

Dates for Loan Period

Date of 

Birth

First Name/ 

Middle Initial

Borrower’s 

Academic Level 

When Loan Was 

Obtained

(see code list)

Last 

Name

Borrower’s 

Social Security 

Number

OPEID of the school that 

certified/originated the loan

Academic Level Codes

1 Freshman/First Year

2 Sophomore/Second year

3 Junior/Third Year

4 Senior/Fourth Year

5 Fifth Year/Other

A First Year Graduate/Professional

B Second Year Graduate/Professional

C Third Year Graduate/Professional

D Beyond Third Year 

Graduate/Professional

G Graduate/Professional

N Not Available
COHO

tention: Alexande 

me: Graphic

765 Arts Lane 

oral City 

nited States

-------- STUDENT --

A

City: 

Count

-----------------

Usag

e 1 2

888888888 999999999

------------- -

ULT : 1,071,266

YMENT : 6,950,053

PAYMENTS: 0

vailable

: 134

unt: 842 Actual De 

LLY: FFEL: 134/842

(D=Direct, I=Indirect, N=No

End of Loa

ault Rate Usage 1: D=Denominator, B=Numerator/Denomi 

ault Rate Usage 2: FD=FFEL Denominator, FB=FFEL Nume

IC=ICR (Negative Amortization Onl

Information Protec

Rate: 15.9 Repo 

IRECT: 3/20

al, U=Unknown) 

ord Detail

Report

ator, N=Not Used, E 

ator/Denominator, D

), N = Not Used, E

 

---------

0 (Based

0 (Based

=Direct Denominator, DB=Direc 

Eligible but not counted

of 1974 As Amended

utstanding

Principal

utstanding

Principal

134(B Usage 1

842(D & B Usa

S R 00/00/000 10/31/200 $ 2,625 66 09/02/199 W 12/31/2001 D F

LATION DATE:

XX/XX/XX PAGE NO:

1

umber: 999999

Balance) 

Balance)

Codes only)

1 Codes)

ve Amortization Only) 

ration Date: XX/XX/05

erator/Denominator,

Enrollment Stat/ 

Code Date

Guarantor/ 

Servicer

Guaranty 

Loan/Dat Claim Rsn/ 

Code

DEFAULT/

NegAm Date -- Loan -

Type Stat

- LENDER/SVCR/HOLDER

Originating Current Repay Date Amoun

Default/Neg Am Date - the date a guaranty agency paid a 

default claim to a lender (claim paid date) on a FFEL or the 

day a Direct Loan or FFEL purchased by the Department is 

considered in default either because the borrower has 

defaulted (default date) or met the other specified condition. 

This date determines if the loan is included in the numerator 

of the cohort default rate calculation.

Claim Reason Code – identifies 

why a claim was paid on a 

FFEL or if a Direct Loan or 

FFEL purchased by the 

Department is considered in 

default because the borrower 

has defaulted or met the other 

specified condition

(see code list)

Loan Status

at time CDR was 

calculated

(see code list)

Loan Type –

FFEL or Direct 

Loan (see code 

list)

Loan Holder –

at time CDR was 

calculated

BODY SECTION – LINE 2 LOAN INFORMATION

U.S. DEPARTMENT OF EDUCATION RATE CALCU 

NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS)

RT YEAR XXX OFFICIAL LOAN RECORD DETAIL REPORT (SCHOOL)

r Peachum Organization ID N

Na Tech

Address: 9

C State: Iowa

ry: U Postal Code: 12345 Program Type: FFEL Y

Original CLASS Academic

SSN Last Name

0 -

First/M.I. D.O.B School Begin Date End Date Level

e

0001-01-0001 CHARM JIM K 06/30/1977 00XXXXXX 09/01/1999 05/30/2000 1

0001-01-0001 CHARM JIM K 06/30/1977 00XXXXXX 09/01/2000 04/30/2001 3

8888888888 9999999999 SU RP 00/00/0000 10/31/2002 $ 5,500 667 08/21/2000 W 12/31/2001 E E

0002-01-0001 XU DENZEL A 10/01/1973 00XXXXXX 01/12/2000 05/12/2000 2

0101 0101 D1 DU IX 12/17/2003 11/02/2002 $ 3,500 0101 02/14/2000 W 05/10/2002 B DB

0003-00-0001 Jackson MARK R 10/29/1983 00XXXXXX 08/22/2002 05/09/2003 1

0101 0101 D1 DA 00/00/0000 06/14/2003 $ 2,625 0101 11/04/2002 W 12/13/2002 D DD

FFEL DIRECT DUAL

TOTAL DOLLARS IN DEFA 

TOTAL DOLLARS IN REPA 

TOTAL INSURANCE CLAIM

************* = Not A

------------ ----

7,875

44,625

Amount – the 

original principal 

amount of the 

loan.

on O

on O

Guaranty 

Loan/Date – date 

that the guaranty 

agency insured a 

FFEL or the first

Enrollment Status Code—

borrower’s enrollment status 

at time the rate was 

calculated.

-Actual Numerator Count

Actual Denominator Co fault Repay Date –

Report Count :

rt Count : date of disbursement for a Direct

Enrollment Status Date — ge last date the borrower’s

INDIVIDUAL PROGRAM TA

Appealed Rate flag: N 

0

D

Appe 

n Rec

date the borrower 

entered into 

repayment on the

IC:

Loan.

i

Report Gene

enrollment status changed. If 

no date is available, the data 

manager may use 01/01/1900.

-Def

Def

n loan. This date r determines if the

y borrower is

included in the 

denominator of the 

cohort default rate 

calculation.

=Eligible but not counted

D Guarantor/Servicer - the data = manager responsible for the

loan. See data manager 

addresses at: 

Ifap.ed.gov/DefaultManagement

t Num (Note that the enrollment 

status code and date may 

reflect subsequent enrollment 

at a different school rather 

than borrower’s enrollment at 

the school listed on the 

LRDR.)

 These fields are the ones most often cited in challenges 

and adjustments.

Usage

Usage 1 – identifies how the 

borrower is used in the school’s 

cohort default rate calculation. 

Usage 2 – identifies how the 

borrower is counted in each 

individual loan program

Lender/Servicer/ Holder

– that provided loan to 

the borrower

t c
Page 2.3-7
SL FFEL Supplemental Loans for

Page 2.3-8

Loan Type Codes

CL FFEL Consolidated Loan

D0 Direct Stafford Subsidized (SULA 

Eligible)

D1 Direct Subsidized Loan

D2 Direct Unsubsidized Loan

D4 Direct PLUS Loan

D5 Direct Unsubsidized Consolidation 

Loan

D6 Direct Subsidized Consolidation 

Loan

D7 Direct PLUS Consolidation Loan

D9 Direct Consolidated Subsidized 

(SULA Eligible)

PL FFEL PLUS Loan

RF FFEL Refinanced Loan

SF FFEL Subsidized Stafford Loan

Enrollment Status Codes

A Approved leave of absence

D Deceased

F Full-time

G Graduated

H Half-time or more, but less than 

full-time

L Less than half-time

N NSLDS Updated

Q Three-Quarter Time

W Withdrawn

X Never attended

Z No record found

Usage 1 Codes

D Denominator only

B Both Numerator and Denominator

N Not Used

E Eligible, but not counted

Usage 2 Codes

Code Program

FD FFEL Denominator

FB FFEL Numerator and 

Denominator

DD Direct Loan Denominator

DB Direct Loan Numerator and 

Denominator

N FFEL/Direct 

Loan

Not included in the cohort 

default rate calculation

E FFEL/Direct 

Loan

Eligible, but not counted 

or used in the cohort 

default rate calculation

Claim Reason Codes

BC FFEL Bankruptcy, Chapter 13

BO FFEL Bankruptcy, Other

CS FFEL Closed School

DE FFEL Death

DF FFEL Default

DI FFEL Disability

EX FFEL Exempt

FC FFEL False Certification

FR Fraud

ID Identity Theft

IN Income Contingent Negative 

Amortization

IX Direct Loan, Defaulted Loan
Page 2.3-9

Loan Status Codes

AL Abandoned Loan DX Defaulted, Six Consecutive Payments

BC Bankruptcy Claim, Discharged DZ Defaulted, Six Consecutive Payments, Then Missed Payment

BK Bankruptcy Claim, Active FB Forbearance

FX Fraud

FR Fraud

CA Canceled FC False Certification Discharge

CS Closed School Discharge IA Loan Originated

DA Deferred ID In School or Grace Period

DB Defaulted, Then Bankrupt, Active, Chapter 

13

IG In Grace Period

DC Defaulted, Compromise IM In Military Grace

IP In Post– Deferment

DD Defaulted, Then Died OD Defaulted, Then Bankrupt, Discharged, Other

DE Death PC Paid in Full Through Consolidation Loan

DF Defaulted, Unresolved PF Paid in Full

DI Disability PM Presumed Paid in Full

DK Defaulted, Then Bankrupt, Discharged, 

Chapter 13

PN Non-Defaulted, Paid in Full Through Consolidation Loan

DL Defaulted, In Litigation RF Refinanced

DN Defaulted, Paid in Full Through 

Consolidation Loan

RP In Repayment

DO Defaulted, Then Bankrupt, Active, Other UA Temporarily Uninsured-No Default Claim Requested

DP Defaulted, Paid in Full UB Temporarily Uninsured-Default Claim Denied

DR Defaulted, Loan Included in Roll-Up-Loan UC Permanently Uninsured/Unreinsured-No Default Claim 

Requested

DS Defaulted, Then Disabled UD Permanently Uninsured/Unreinsured-Default Claim Denied

DT Defaulted, Collection Terminated UI Unreinsured

DU Defaulted Unresolved XD Defaulted, Six Consecutive Payments

DW Defaulted, Write-Off VA Disabled Veteran Discharged
SUMMARY – bottom of last page of LRDR

FFEL DIRECT DUAL

TOTAL DOLLARS IN DEFAULT : 1,071,266 7,875 0 (Based on Outstanding Principal Balance)

TOTAL DOLLARS IN REPAYMENT : 6,950,053 44,625 0 (Based on Outstanding Principal Balance)

TOTAL INSURANCE CLAIM PAYMENTS: 0

************* = Not Available

-Actual Numerator Count : 134

Actual Denominator Count: 842 Actual Default Rate: 15.9

Report Count : 129(B Usage 1 Codes only)

Report Count : 837(D & B Usage 1 Codes)

INDIVIDUAL PROGRAM TALLY: FFEL: 134/842 DIRECT: 3/20

Appealed Rate flag: N (D=Direct, I=Indirect, N=No Appeal, U=Unknown)

0 End of Loan Record Detail Report

IC: 0 (Negative Amortization Only) 

Report Generation Date: XX/XX/05

-Default Rate Usage 1: D=Denominator, B=Numerator/Denominator, N=Not Used, E=Eligible but not counted

Default Rate Usage 2: FD=FFEL Denominator, FB=FFEL Numerator/Denominator, DD=Direct Denominator, DB=Direct Numerator/Denominator, 

IC=ICR (Negative Amortization Only), N = Not Used, E = Eligible but not counted

Information Protected By the Privacy Act of 1974 As Amended

Page 2.3-10

Actual Numerator Count –

total number of unduplicated 

borrowers included in the 

numerator of the CDR 

calculation.

Actual Denominator Count –

Is the total number of 

unduplicated borrowers 

included in the denominator 

of the CDR calculation.

Actual Default Rate – based on one cohort 

fiscal year of data, which is, in most cases 

the school’s cohort default rate. However, if 

a school has 29 or fewer borrowers entering 

repayment in the CDR calculation or if the 

school has a combined, substituted, or 

merged cohort default rate, the actual 

default rate will not reflect the school’s 

cohort default rate.

Report Count/ Numerator –unduplicated 

borrowers listed on the LRDR with a “B” in 

the Usage 1 field.

Report Count/Denominator –

unduplicated borrowers listed on the LRDR 

with a “D” or “B” in the Usage 1 field.

NOTE: the Report Count may differ from the 

Actual Count if rate has changed due to 

adjustment/appeal. The Actual Count will 

reflect adjustment/ appeal changes.

Income Contingent – this 

field is no longer used.

Individual Program Tally – the number of borrowers identified with each loan 

program and the number of those borrowers who have defaulted or met the 

other specified condition. These fields are purely informational and do not 

reflect the school’s cohort default rate.

Appealed Rate Flag –

(D) Direct = School’s cohort default rate altered due to the school’s 

adjustment/appeal

(I) Indirect = School’s cohort default rate altered due to an adjustment/appeal 

filed by a different school in a combination/substitution/merger

(N) No Appeal = School’s cohort default default rate not altered by an 

adjustment/appeal

(U) Unknown = Adjustment/appeal status unknown for a cohort default rate prior 

to FY 1993.

Total Dollars in Default –

total outstanding principal 

balance (including any 

interest that has accrued 

on the loan since it went 

into default) for the 

defaulted loans that are 

included in the CDR 

calculation.

Total Dollars in Repayment

– total dollar volume for 

loans that have entered 

repayment during the 

cohort fiscal year in 

question.

Total Insurance Claim 

Payments – actual amount 

of guaranty agency claims 

paid to lenders on FFELs.

Because the Total Dollars 

in Default includes interest, 

this figure will not match 

the Total Insurance Claim 

Payments, which does not 

include interest.
2.4 Cohort Default Rate Effects

Sanctions and Benefits
Why are cohort default rates important?

Defaulted federal student loans cost taxpayers money. Cohort default rate sanctions and 

benefits provide an incentive to schools to work with their borrowers to reduce default. 

Sanctions also can prevent a school with a high percentage of defaulters from continuing to 

participate in the William D. Ford Federal Direct Loan (Direct Loan) and Federal Pell Grant 

programs. As a result, cohort default rates help save taxpayers money.

Why is it important to review the data for DRAFT cohort default rates? 

Although there are no sanctions or benefits associated with a draft cohort default rate, it is 

important to review the data used to calculate the rate for accuracy, because this data forms

the basis of a school’s official cohort default rate. A school that fails to challenge the accuracy

of its draft cohort default rate data through an Incorrect Data Challenge (see Chapter 4.1) may 

not contest the accuracy of that same cohort data when it receives its official cohort default 

rate. Therefore, it is critical that all schools review their draft cohort default rate data when the

U.S. Department of Education (the Department) releases it. In addition, in certain 

circumstances a school may be able to avoid the sanctions associated with its official cohort 

default rate by submitting a successful Participation Rate Index Challenge (see Chapter 4.2) 

based on its draft cohort default rate.

Will a school’s DRAFT and OFFICIAL cohort default rate data be the same? 

No, a school’s draft cohort default rate data and official cohort default rate data will not 

necessarily be the same. The National Student Loan Data System (NSLDS), which contains the

data used to calculate cohort default rates, is updated regularly. As a result, a school’s draft

cohort default rate data may differ from its official cohort default rate data even if the school 

does not challenge the draft cohort default rate data. In addition, “average rate” schools –

schools having fewer than 30 borrowers entering repayment in their most recent cohort year –

will have included in their draft rate data only those borrowers who entered repayment in that 

year, whereas the “official rates” for these schools will include not only that data but also the 

data regarding borrowers who entered repayment in the preceding two fiscal years.

Regulatory citations: 

34 CFR 668.206

34 CFR 685.301

34 CFR 685.303

Page 2.4 - 2

It is critical that all schools review their draft cohort default rate data.
Are there any benefits for schools with low official cohort 

default rates?

Yes, there are two benefits available to schools with a low official cohort default 

rate, as described in the chart below.

Benefits for schools with low official cohort default rates

Eligible School Benefits

(34 CFR 685.303)

A school whose most recent official cohort 

default rate is less than 5.0 percent and is an 

eligible home institution that is originating 

loans to cover the cost of attendance in a 

study abroad program

May disburse loan proceeds in a single 

installment to a student studying 

abroad

regardless of the length of the student’s loan 

period.

May choose not to delay the disbursement of 

the first installment of loan proceeds for firstyear first-time borrowers studying abroad.

A school with a cohort default rate of less 

than 15.0 percent for each of the three most 

recent fiscal years for which data are 

available, including eligible home institutions 

and foreign institutions

May disburse, in a single installment, 

loans that are made for one semester, 

one trimester, one quarter, or a fourmonth period.

May choose not to delay the first 

disbursement of a loan for 30 days for 

first- time, first-year undergraduate 

borrowers.

These benefits take effect as soon as the school receives its official cohort default 

rate notification letter or notification of a successful adjustment and/or appeal 

from the Department. Schools no longer qualify for these benefits starting 30 

calendar days after receiving notice from the Department of an official cohort 

default rate that exceeds the benefit threshold.

Page 2.4 - 3
Are there any sanctions associated with high official cohort default rates? 

Yes, sanctions apply when a school’s official cohort default rate is at or above certain 

percentages.

Sanctions for schools with high official cohort default rates

School Sanctions 

(34 CFR 668.206)

A school‘s three most recent 

official cohort default rates 

are 30.0 percent or greater 

for the three year 

calculation.

Except in the event of a successful adjustment or appeal, 

such a school will lose Direct Loan and Federal Pell Grant 

program eligibility for the remainder of the fiscal year in 

which the school is notified of its sanction and for the 

following two fiscal years.

A school‘s current official 

cohort default rate is 

greater than 40.0 percent, 

for the three year CDR 

calculation.

Except in the event of a successful adjustment or appeal, 

such a school will lose Direct Loan program eligibility for the 

remainder of the fiscal year in which the school is notified of 

its sanction and for the following two fiscal years.

NOTE: A school is not subject to the loss of Federal Pell Grant Program eligibility if, 

prior to October 7, 1998, the school requested in writing to withdraw from or lost its 

eligibility to participate in the FFEL and/or Direct Loan programs and has not 

subsequently participated in those programs. In addition, a school is not subject to the 

loss of Federal Pell Grant Program eligibility if it did not certify any FFELs and/or 

originate any Direct Loans on or after July 7, 1998. A school that resumes participation 

in the FFEL or Direct Loan programs is no longer eligible for either of these Federal

Pell Grant Program exemptions.

Page 2.4 - 4
Can a school avoid the sanctions associated with high official 

cohort default rates?

If a school is notified that it is subject to sanction, the school may submit an 

adjustment or appeal to attempt to avoid that sanction. Adjustments and appeals 

are available to schools after the release of the official cohort default rates.

Challenges are available to schools after the release of the draft cohort default 

rates, and may also result in avoidance of a sanction.

The following chart summarizes the actions a school may take. Schools not 

subject to loss of eligibility and schools subject to provisional certification based 

on cohort default rates may only take a limited number of these actions. See 

Chapter 3.1, “Reviewing Rates and Loan Data,” for an overview of the actions 

schools may take. For more information, including detailed explanations of each 

action and the timeframes for taking an action, see Part IV of this Guide, 

“Challenges, Adjustments, and Appeals.”

School actions in response to cohort default rates

Page 2.4 - 5

Draft/ 

Official Type of Action Purpose

Draft Incorrect Data Challenge Correct data before the official cohort default 

rates are released.

Draft Participation Rate Index 

Challenge

Demonstrate a low borrower participation rate 

to avoid an anticipated sanction with the official 

cohort default rate.

Official* Average Rates Appeal Demonstrate a low number of borrowers.

Official* Thirty-or-Fewer Borrowers Appeal Demonstrate a low number of borrowers.

Official Erroneous Data Appeal For a school that is subject to sanction, contest 

official cohort default rate data that was not 

included in the draft cohort default rate data 

(new data) and/or contest the data manager’s 

decision (disputed data).

Official Loan Servicing Appeal Contest servicing of the borrower’s loan 

account.

Official Economically Disadvantaged 

Appeal

Demonstrate a high number of low-income 

students and high placement or completion 

rates.

Official Participation Rate Index Appeal Demonstrate a low borrower participation rate.

Official Uncorrected Data Adjustment Contest a data error that was agreed upon in the 

draft process but is still reflected in the official 

cohort default rate data.

Official New Data Adjustment For a school that is not subject to sanction, 

contest official cohort default rate data that was 

not included in draft cohort default rate data or 

that is different from the draft cohort default 

rate data.

*Before notifying you 

of your official 

cohort default rate, 

we make an initial 

determination about 

whether you qualify 

for these appeals.
Are there any consequences if a school submits adjustments and/or 

appeals but fails to avoid sanctions?

In addition to losing eligibility, a school that submits adjustments and/or appeals but fails to 

avoid sanctions is liable for certain costs associated with the Direct Loans it originated and 

disbursed during the adjustment and appeal process. Liabilities are not calculated for loans that 

were disbursed more than 45 calendar days after the school submitted its completed 

adjustment or appeal to the Department. Schools may avoid this liability if they choose not to 

originate loans during the adjustment and appeal process.

If a school is subject to a sanction, when does the sanction take effect? 

The effective date of the sanction is dependent upon whether or not the school timely 

submitted an adjustment or appeal, and the current sanction status of the school. The chart

below summarizes the effective date of sanctions based upon these circumstances.

Effective date of sanctions

School is NOT 

Currently Under 

Sanction

School IS Currently 

Under Sanction

School Does Not 

Timely Submit 

Adjustment or 

Appeal

The school’s participation 

ends 30 calendar days after 

the date the school first 

receives notice that it is 

subject to the loss of eligibility.

The school’s previous loss of 

eligibility remains in effect and 

the school will receive an 

additional sanction.

School Timely 

Submits 

Adjustment or 

Appeal, but 

Adjustment or 

Appeal is 

Unsuccessful

The school’s participation 

ends on the date that the 

school received the

Department’s final decision 

indicating that the adjustment 

and/or appeal was 

unsuccessful. A school may 

choose not to participate 

during the period to avoid 

incurring a liability.

The school’s previous loss of 

eligibility remains in effect and 

the new loss of eligibility is 

effective when the school 

receives the Department’s final 

decision indicating that the 

school’s adjustment or appeal

was unsuccessful. The new

loss of eligibility does not

replace the previous loss but it

does extend the length of time

that a school is unable to

participate in the Direct Loan or

Federal Pell Grant Program.

School Timely The Department will withdraw 

the notification that the school 

is subject to a loss of 

eligibility.

The Department will withdraw 

the notification that the school 

is subject to an additional loss 

of eligibility. However, the 

previous loss of eligibility 

remains in effect.

Submits

Adjustment or

Appeal, and

Adjustment or

Appeal is

Successful

Page 2.4 - 6
A school that loses eligibility may continue to honor unpaid loan commitments 

and make certain second disbursements after notification of the loss of eligibility 

if the school meets certain criteria listed in the CFR. The criteria can be found at 

34 CFR 668.26(d).

The official cohort default rates must be released no later than September 30th. 

If, however, cohort default rates are not issued until after that date, a school’s 

loss of eligibility would continue only for the remainder of the fiscal year in 

which the cohort default rates are issued and for the following fiscal year. For 

example, if the Department issues cohort default rates for FY 2015 on October 2, 

2018, then a loss of eligibility that is based on the FY 2015 cohort default rate 

would continue only for the remainder of FY 2019 (the fiscal year in which the 

cohort default rates were issued) and to the end of FY 2020.

How does a school withdraw from or reapply for participation 

in the Title IV loan programs?

A school should contact Common Origination and Disbursement (COD) School 

Relations at 1-800-848-0978 for information on withdrawing from the Direct 

Loan Program.

A school that loses Direct Loan or Federal Pell Grant eligibility may reapply for 

participation when the sanction period ends. A school should apply online at 

https://eligcert.ed.gov/ .

Page 2.4 - 7
2.5 Change in Status

The Effect of Merges and a Change in Status
What is a change in status?

There are three types of change in status for cohort default rate purposes:

Acquisition or Merger of Schools

The first type of change in status occurs when one of two things 

happens: either one existing school acquires another existing

school (acquisition of schools) or two existing schools combine 

to form one new school (merger of schools). The former parent 

school no longer exists

Example (left): Einstein Tech merges with Pauli College to 

become Einstein-Pauli Technical College.

Acquisition of Branches or Locations

Example: Banneker Tech acquires the 

Takoma branch of FS Key College.

The second type of change in status 

occurs when an existing school 

acquires a branch or location of 

another school. This type of change in 

status results in one expanded school 

and one former parent school.

Branches or Locations Becoming Schools

The third type of change in status occurs when a 

branch or location of an existing school becomes 

an independent main school. This type of changein 

status results in one new or existing school and 

one former parent school.

Example: The Evers branch of 

Horsehide Tech becomes an 

independent new school called 

Evers College.

A campus or other entity is considered a school for 

cohort default purposes if it has its own OPE ID.

Regulatory citation: 

34 CFR 668.203

34 CFR 668.207
Page 2.5 - 2
How does a school’s change in status affect the school’s cohort

default rate?

A school involved in a merger, acquisition, or other change in status should be 

aware that the change may affect the application and calculation of its cohort 

default rates and that loss of eligibility may be applicable to the school after 

the change in status. After a change in status, cohort default rates are applied 

to a school according to the type of change in status.

Additionally, schools should be aware that borrowers are counted once except 

when there is a merger of schools and the student has had loans certified in 

more than one of the merged schools.

How does a school notify the Department of a possible future 

change in status?

Because different cohort default rates may be applied to a school as a result of 

a change in status, the school’s eligibility may be jeopardized as a result of a 

change in status. All schools contemplating a change in status should submit a 

letter to the School Participation Team (SPT) at the U.S. Department of 

Education (the Department) before making the change. The letter should:

♦ explain the proposed change in status,

♦ include the details of the change in status (for example, if the change is 

part of a teach-out), and

♦ request guidance regarding the consequences, if any, the change in 

status will have on the school’s cohort default rate and the school’sTitle 

IV program eligibility.

The Operations Performance Division (OPD) will send a written response to the 

SPT indicating how the historical, current, and future cohort default rates will 

be calculated based on the proposed change in status. SPT will then 

communicate the status to the school. Schools can use this response to 

evaluate whether the change in status will be beneficial or detrimental to the 

schools involved in the change.

If a school decides to change its status, the school must submit an application 

to SPT, as applicable, report the change or request approval for the change for 

Title IV program purposes. For more information on submitting a change 

request, visit the Electronic Application for Approval to participate in the 

Federal Student Financial Aid Programs (E-App) Website.

Page 2.5 - 3

See Chapter 2.2,”How Schools Get the Rates & Loan Data,” to find out

how to request a LRDR.

See Chapter 2.3, “Reviewing the Loan Record Detail Report,” for

information on how to read a LRDR.
After a change in status occurs, at the next cohort default rate calculation, the school will 

receive a Loan Record Detail Report (LRDR) that includes all data for schools involved in the 

transaction. See Chapter 2.2, “How Schools Get The Rates and Loan Data,” for information 

on requesting LRDR and Chapter 2.3, “Reviewing the Loan Record Detail Report,” for 

information on reading LRDR. Further, after a change in status, a school may submit a 

challenge, adjustment, or appeal based on the data for another school’s borrowers, under 

the same requirements that would be applicable to the other school, if the loans for those 

borrowers affect the school’s cohort default rate.

Under certain circumstances, the Department’s regulations require a school involved in a 

change in status to assume the loss of eligibility of another school involved in the change in 

status, to avoid evasion of cohort default rate sanctions.

How does a change in status affect a school that was subject to loss of 

eligibility at the time of the change?

If a school that is already subject to loss of eligibility combines with another school, the new 

school has the same challenge, adjustment, and appeal options as the school that was subject 

to sanction before the change in status. That is, if the school that was subject to loss of 

eligibility before the change in status had exhausted all means of challenge, adjustment, 

and/or appeal, the new school has no challenge, adjustment, and/or appeal rights. If the 

school that was subject to loss of eligibility before the change in status did not exhaust all 

means of challenge, adjustment, and/or appeal, the new school may request a challenge, 

adjustment, and/or appeal, but only under the same timeframes and other requirements that 

were applicable to the sanctioned school.

Page 2.5 - 4
Effects of change in status on cohort default rates

Type of 

Change in 

Status

Historical 

Cohort Default 

Rates for the 

New School

Subsequent 

Three Year 

Cohort Default 

Rates for the 

New School

Fourth Year 

and 

Subsequent 

Year Cohort 

Default Rates 

for the New

School

Cohort 

Default 

Rates for 

the 

Former 

School or

Schools

Acquisition or 

Merger of 

Schools

668.203(a)(4), 

(b);

COA Code B

The new or 

surviving school’s 

historical cohort 

default rates will be 

the cohort default 

rates of the school 

involved in the 

change of status 

that has the highest 

total number of 

borrowers entering 

repayment in the 

two most recent 

cohort fiscal years 

for which cohort 

default rates have

been published.

The new school’s 

cohort default rates 

following the merger 

or acquisition are 

determined by 

including all the 

applicable borrowers 

from each school 

involved in the 

acquisition or merger 

in the cohort default 

rate calculation.

The new school’s 

cohort default 

rates are 

determined by 

including all the 

applicable 

borrowers from 

each school 

involved in the 

acquisition or 

merger in the 

cohort default rate 

calculation.

The former 

school (or 

schools, in the 

case of a 

merger) no 

longer exists.

Acquisition of 

Branches or 

Locations

668.203(a)(4),

(c)

COA Code C

The expanded 

school’s historical 

cohort default rates 

will be the cohort 

default rates of the 

acquiring school.

The expanded 

school’s first three 

cohort default rates 

published after the 

date of the change in 

status will be 

calculated using all 

the applicable 

borrowers from both 

the acquiring school 

and the school from 

which the branch or 

location was

acquired, including all 

of its locations.

The expanded

school’s fourth 

cohort default rate 

published after the 

date of the change 

in status and the 

cohort default 

rates in 

subsequent cohort 

fiscal years will be 

calculated using 

only the applicable 

borrowers from

the acquiring 

school.

The former 

parent school’s 

cohort default 

rates are not 

affected by the 

change in 

status.

Branches or 

Locations 

Becoming 

Schools

668.203(a)(4),

(d)

COA Code D

The new school’s 

historical cohort 

default rates will be 

the cohort default 

rates of the former 

parent school.

The new school’s first 

three cohort default 

rates published after 

the date of the 

change in status will 

be calculated using 

all the applicable 

borrowers from both 

the new school and 

the former parent 

school, including all 

of its locations.

The new school’s 

fourth cohort 

default rate 

published after the 

date of the change 

in status and for 

cohort default 

rates in 

subsequent cohort 

fiscal years will be 

calculated using 

only the applicable

borrowers from 

the new school.

The former 

parent school’s 

cohort default 

rates are not 

affected by the 

change in 

status.

Page 2.5 - 5
3.1 Reviewing Rates and Loan Data

Cohort Default Rate Management Strategies for Schools
Why should a school official review this chapter?

School officials should review this Chapter to prepare for the release of the official cohort 

default rates as well as to determine if the school needs to submit a challenge, adjustment, or 

appeal and, if so, which challenges, adjustments, or appeals the school is eligible to submit.

How can a school ensure that its internal offices communicate and 

respond in a proper manner?

A school should determine in advance who would have responsibility for reviewing cohort 

default rate related matters. It is important that there be a free flow of enrollment status 

information between the school office in charge of that information and the school office 

reviewing cohort default rate matters. The school should ensure that contacts are inplace 

between those offices.

How can a school ensure proper communication with its external 

partners?

Your school may wish to designate certain staff or offices as contact points for data managers, 

the Department, or School Participation Teams. Be sure to update data managers, the 

Department, and School Participation Teams when those contacts change.

The Department recommends that schools send all cohort default rate correspondence and 

enrollment information correspondence to all entities via certified mail or commercial 

delivery, if sending via hard copy, and maintain the documentation that shows the 

correspondence was sent. A school should keep copies of all relevant electronic and hardcopy 

correspondence between the school and data managers, lenders, servicers, and the 

Department.

How does a school receive cohort default rate correspondences?

The Department electronically transmits cohort default rate (eCDR) notification packages to 

all schools, using the Student Aid Internet Gateway (SAIG) destination point administrator 

(DPA) designated by the school. Schools are responsible for updating SAIG enrollment 

information whenever changes are needed, such as a change in the designated destination 

point for eCDR notification. Changes to your school’s SAIG enrollment information can be 

made on-line at the SAIG Enrollment Site.

The announcement of the release date of the draft and official cohort default rates will be 

posted on the Information for Financial Aid Professionals (IFAP) website (ifap.ed.gov) under the 

current year electronic announcements.

Data Managers 

contact information is 

posted with other 

Cohort Default Rate 

Materials on the IFAP 

website:

https://ifap.ed.gov/d

m/numericaldatamgr

contacts

The Department sends cohort default rates to schools twice 

each year. Generally, the Department sends draft cohort 

default rates to schools in February. Official cohort default 

rates must be released no later than September 30th. (See

Chapter 2.2,”How Schools Get the Rates & Loan Data.)

Page 3.1 - 2
What actions can a school take to help process the draft and 

official cohort default rates?

A school can begin cohort default rate preparations prior to the release of the 

draft or official cohort default rates. After the release of the draft or official 

cohort default rates, a school should review its cohort default rate data. The 

school should then determine if it wishes to submit a challenge, adjustment, or 

appeal based upon that data.

How can a school prepare for the release of the cohort default 

rates?

There are a number of things a school can do to prepare for the release of the 

cohort default rates:

• Be aware of the school’s current cohort default rate status.

The challenges, adjustments, or appeals a school can and should submit 

will be determined in part by whether or not the school is currently 

under sanction, and by which challenges, adjustments, and appeals the 

school has submitted in the past.

• Identify its two most recent prior official cohort defaultrates.

Since some sanctions or benefits may be based on a school’s three most 

recent official cohort default rates, schools will need to be aware of the 

prior cohort default rates to understand the consequences of their 

current cohort default rates. Schools can find this information on prior 

official cohort default rate notification letters or in National Student Loan 

Data System (NSLDS). If the school’s cohort default rate was changed as 

the result of an adjustment or appeal, it can find this information in the 

determination letter the school received from the Department.

• Begin preparing challenge, adjustment, and appeal materials.

See Part IV for information on the materials for certain appeal types 

used in challenges, adjustments, and appeals. Sample spreadsheets are 

within the Guide Pages under “Guide Page.” If a school has already 

created electronic copies of the various spreadsheets and letters, it 

should locate those electronic copies and verify that they are ready for 

use.

• Further, a school can begin calculating its participation rate index for a 

participation index rate challenge (see Chapter 4.2) prior to the release 

of the draft cohort default rates. Similarly, a school can begincalculating 

its low-income rate and its placement or completion rate for an 

economically disadvantaged appeal (see Chapter 4.7), or its participation 

rate index for a participation rate index appeal (see Chapter 4.8), prior to 

the release of the official cohort default rates.

Page 3.1 - 3

See Chapter 4.2, 

“Participation Rate 

Index Challenge,” 

Chapter 4.7, 

“Economically 

Disadvantaged 

Appeal,” and 

Chapter 4.8, 

“Participation Rate 

Index Appeal.”

A school may wish 

to develop a 

checklist, specific 

to the school’s 

needs, of the 

activities the 

school needs to 

do before, during, 

and after the 

release of the 

draft and official 

cohort default 

rates.
• Finally, you can prepare a spreadsheet showing loan information, such as enrollment 

status and Date Entered Repayment, for student borrowers at your school. See the 

section entitled “How does a school determine if there is inaccurate data on the LRDR?” 

(Chapter 2.3, “Reviewing the Loan Record Detail Report,”) for more information.

How does a school determine if it should submit a challenge, adjustment, 

or appeal?

Schools may submit challenges after the release of the draft cohort default rates; schools may

submit adjustments and appeals after the release of the official cohort default rates.

The challenges, adjustments, and appeals fall into two main categories:

• Challenges, adjustments, and appeals that contend that the LRDR containsinaccurate 

data and that as a result, the school’s cohort default rate isinaccurate.

If a school submits one of these challenges, adjustments, or appeals, and the challenge, 

adjustment, or appeal is successful, the school’s cohort default rate may be lowered,

raised, or not affected. If the school’s cohort default rate is lowered, the school may avoid 

a sanction or become eligible for a benefit.

• Challenges and appeals that contend that the school has exceptional mitigating 

circumstances, or a low participation rate index, that should remove the school from being 

subject to cohort default rate sanction.

If a school submits one of these challenges or appeals, and the challenge or appeal is 

successful, the school may avoid sanctions. However, the school’s cohort default rate will 

not be affected.

The type of challenge, adjustment, or appeal a school should submit depends on the school’s 

situation. The following chart on Pages 3.1-5 and 3.1-6 details which schools are eligible to 

submit the different challenges, adjustments, and appeals. See the relevant chapter in Part IV 

for a list of the materials a school must submit with each challenge, adjustment, or appeal.

A school must submit a challenge, adjustment, or appeal within specified timeframes, as 

shown in Part IV. If your school is submitting multiple challenges, adjustments, or appeals, you 

may wish to review these timeframes to determine which one requires the most immediate 

attention.

Page 3.1 - 4
Why should a school that is not subject to loss of eligibility 

contest inaccurate data on the LRDR?

There are a number of reasons why a school that is not subject to sanction 

should contest inaccurate data on the LRDR:

• Contesting inaccurate data helps maintain data integrity and accuracy.

• Contesting inaccurate data may lead to a reduction in the school’s cohort 

default rate that would make the school eligible for the benefits available to 

schools with low cohort default rates. See Chapter 2.4, “Cohort Default Rate 

Effects,” for information on the benefits available for schools with lowcohort 

default rates.

• Contesting the accuracy of the data may help prevent a schoolfrom becoming 

provisionally certified based solely on the school’s official cohort defaultrate.

Page 3.1 - 5

In some cases, a school must request information from a 

data manager before the school makes a final submission 

to the Department. When a school receives a data 

manager’s response, the school must decide if it will make 

a final submission. The final submission must also be made 

within a prescribed timeframe. Again, see Part IV for 

specific timeframes.
Challenges, adjustments, and appeals based on incorrect data or improper 

servicing (potentially affecting school’s cohort default rate)

Submission 

Type

Why Submit Which Schools can take 

action?

Effect

Incorrect Data 

Challenge 

[Draft Rates]

34 CFR

668.204(b)

A school believes that the 

LRDR for the draft cohort 

default rates contains 

incorrect data

Any school that believes there 

is inaccurate data in the LRDR 

for its draft cohort default 

rates. (See Chapter 4.1 for 

procedures)

If a school does not challenge 

the accuracy of data in an 

incorrect data challenge, the 

school cannot contest the 

accuracy of that data later in an 

uncorrected data adjustment or 

an erroneous data appeal based 

on disputed data.

If successful, NSLDS will be 

corrected and the corrected 

data will be used when

calculating the school’s 

official cohort default rate.

Uncorrected 

Data 

Adjustment 

[Official Rates]

34 CFR 668.209

A school believes that the 

LRDR for the official cohort 

default rates contains data 

that should have been 

corrected as a result of its 

incorrect data challenge.

Any school that submitted a 

successful incorrect data 

challenge, and if the official 

cohort default rate data does 

not reflect the changes agreed 

to as part of the incorrect data 

challenge process.

(See Chapter 4.3 for 

procedures)

If successful, NSLDS will be 

corrected and the 

Department will recalculate 

the school’s cohort default 

rate.

New Data 

Adjustment 

[Official Rates]

34 CFR 668.210

A school believes that the 

LRDR for the official cohort 

default rates contains new, 

incorrect data.

Any school that believes there 

is new, incorrect data in the 

LRDR for its official cohort 

default rates. Note: if the 

school is subject to sanction, it 

should submit an erroneous 

data appeal instead.

(See Chapter 4.4 for 

procedures)

If successful, NSLDS will be 

corrected and the 

Department will recalculate 

the school’s cohort default 

rate.

Erroneous Data 

Appeal

[Official Rates]

34 CFR 668.211

A school believes that the 

LRDR for the official cohort 

default rates contains new, 

incorrect data and/or 

contains disputed data that 

was included in an 

incorrect data challenge.

Any school that is subject to 

loss of eligibility or provisional 

certification, solely due to CDRs 

and believes 1) that there is 

new, incorrect data in the LRDR 

for its official cohort default 

rates, or 2) the school still 

disputes the accuracy of data it 

challenged in an incorrect data 

challenge.

(See Chapter 4.5 for 

procedures)

If successful, NSLDS will be 

corrected and the 

Department will recalculate 

the school’s cohort default 

rate. Also, if the 

recalculated rate falls below 

the relevant threshold, the 

school will no longer be 

subject to loss of eligibility 

or provisional certification.

Loan Servicing 

Appeal

[Official Rates]

34 CFR 668.212

A school believes that the 

LRDR for the official cohort 

default rates contains 

defaulted loans that were 

improperly serviced for 

cohort default rate 

purposes.

All schools that have defaulted 

loans included in the LRDR for 

the most recently issued official 

cohort default rate, or for any 

cohort default rate upon which 

a loss of eligibility is based. 

(See Chapter 4.6 for 

procedures)

If successful, the 

Department will recalculate 

the school’s cohort default 

rate.

Page 3.1 - 6
Challenges & appeals based on exceptional mitigating circumstances

Submission 

Type

Why Submit? Which Schools Can 

Take Action?

Effect

Participation Rate 

Index Challenge 

[Draft Rates]

34 CFR 668.204(c)

A school believes that it may 

be subject to loss of eligibility 

or potential provisional 

certification based on its cohort 

default rates with the release 

of the official cohort default 

rates but also believes that it 

should not be subject to 

sanction or potential 

provisional certification 

because of its low participation

rate index.

All schools, but only 

those that will be 

subject to loss of 

eligibility or potential 

provisional certification 

based on its cohort 

default rates when the 

official cohort default 

rates are released will 

benefit. (See Chapter

4.2 for procedures)

If successful, the school will 

not be subject to the 

anticipated sanction or 

potential provisional 

certification. If the school 

successfully challenges 

based on a prior official 

cohort default rate, that 

cohort default rate will not 

be the basis for a future 

sanction.

Economically 

Disadvantaged 

Appeal 

[Official Rate]

34 CFR 668.213

A school believes that it should 

not be subject to loss of 

eligibility or potential 

provisional certification based 

on its cohort default rates 

because of the number of lowincome students attending the 

school and the school’s 

placement rate (for a nondegree-granting school) or the 

school’s completion rate (for a 

degree–granting school).

Schools that are subject 

to loss of eligibility or 

potential provisional 

certification based on its 

cohort default rates. 

(See Chapter 4.7 for 

procedures)

If successful, the school will 

not be subject to sanction 

for that cohort fiscal year.

Participation Rate 

Index Appeal 

[Official Rate]

34 CFR 668.214

A school believes that it should 

not be subject to loss of 

eligibility or potential 

provisional certification based 

on its cohort default rates 

because of its low participation 

rate index.

Schools that are subject 

to loss of eligibility or 

potential provisional 

certification based on its 

cohort default rates. 

(See Chapter 4.8 for 

procedures)

If successful, the school will 

not be subject to sanction 

for that cohort fiscal year. If 

the school’s participation 

rate index for a cohort fiscal 

year meets the relevant 

threshold, the cohort default 

rate for that cohort fiscal 

year will not be the basis for 

a future sanction.

Average Rates 

Appeal 

[Official Rate]

34 CFR 668.215

At least 2 of the 3 cohort 

default rates were calculated as 

average rates and would have 

been less than 30% if they 

were calculated using only data 

for those cohort fiscal years 

alone. Or, a cohort default rate 

that is greater than 40% and 

was calculated as an average 

rate.

Schools that are subject 

to sanction.

(See Chapter 4.9 for 

procedures)

If successful, the school will 

not be subject to sanction 

for that cohort fiscal year.

Thirty-or-Fewer 

Borrowers Appeal 

[Official Rate]

34 CFR 668.216

A total of 30 or fewer 

borrowers entered repayment 

in the 3 most recent cohort 

fiscal years used to calculate its 

cohort default rate.

Schools that are subject 

to sanction.

(See Chapter 4.10 for 

procedures)

If successful, the school will 

not be subject to sanction 

for that cohort fiscal year.

Page 3.1 - 7
What types of allegations may a school submit to contest data on the 

LRDR?

When submitting an incorrect data challenge, new data adjustment, or erroneous data 

appeal, a school must submit allegations about the accuracy of the data used to calculate the 

school’s cohort default rate. The allegations usually fall into three main categories:

♦ The school alleges that the LRDR incorrectly reports a borrower as included in the 

numerator, and the default date orstatus is incorrect and borrower should not be counted in 

the numerator.

♦ The school alleges that the LRDR incorrectly includes a borrower whose repayment date 

does not fall within the cohort fiscal year and the borrower should be removed from the 

cohort default rate calculation and removed from both the numerator and denominator 

(incorrectly included).

♦ The school alleges that the LRDR incorrectly excludes a borrower who entered 

repayment within the cohort fiscal year and the borrowershould be added to the cohort 

default rate calculation (incorrectly excluded).

What supporting documentation does a school need to submit when 

contesting data on the LRDR?

A school must submit documentation to support its allegations.

Relevant supporting documentation includes, but is not limited to, the following:

♦ a copy of a letter to the relevant data manager that informs the entity of the 

borrower’s last date of attendance or less-than half-time date;

♦ a dated copy of an Enrollment Report that confirms the borrower’s last date of 

attendance or less than half time date and proof that the documentation wassubmitted,

♦ a copy of a canceled check, front and back, or other documentation showing that the 

borrower’s loan was fully refunded and canceled within 120 days of disbursement by the 

lender.

♦ an original or certified copy of the borrower's death certificate, or an accurate and 

complete photocopy of the original or certified copy of the borrower. If the borrower’s death 

certificate is unavailable, see 34 CFR §685.212 for information on additional types of death 

documentation.

A school may contact the data manager for additional information on types of supporting 

documentation the school should submit to support an allegation.

If the data a school submits was never originally submitted to the relevant data manager or 

NSLDS, the data manager should respond that the issue in question was determined based on 

the best information available at the time and that, as a result, no change is warranted for 

cohort default rate purposes.

Page 3.1 - 8
Does a school need to submit LRDR pages with itsallegations? 

For appeal types not submitted via eCDR Appeals, a school must always submit 

the appropriate pages of the LRDR to support its allegations. The schoolshould

include the LRDR page where the school alleges the borrower data has been

incorrectly reported, incorrectly included, or incorrectly excluded.

In certain circumstances, the school must submit multiple LRDR pages from the 

same cohort fiscal year. If the borrower has multiple loans that appear onmore 

than one page, the school should include each page where the borrower 

appears. If the borrower is missing from the cohort default rate calculation, 

and the missing borrower would have appeared at the bottom of one page or 

the top of the next page, the school should include both pages.

In other circumstances, the school must submit LRDR pages from multiple 

cohort fiscal years. If the school alleges that a borrower was incorrectly 

reported in one cohort fiscal year and should have been reported in another 

cohort fiscal year, the school must include the relevant LRDR pages from both 

cohort fiscal years.

Finally, in some circumstances the school must submit pages from the LRDR for 

the draft cohort default rates and the LRDR for the official cohort default rates. 

If the school is alleging that the LRDR for the official cohort default rates 

contains new data, the school must show the page(s) from the LRDR for the 

draft cohort default rates where the borrower initially appeared or should have 

appeared and the page(s) from the LRDR for the official cohort default rates 

where the new data appears or should have appeared.

What specific allegations and supporting documentation can 

a school submit when contesting data on the LRDR?

The following pages contain five charts that list some of the most common 

allegations and the documentation a school must submit to the data manager 

or to the Department. These charts represent the following general categories 

of allegations:

♦ Borrower incorrectly included on a LRDR because of an inaccurate DATE 

ENTERED REPAYMENT

♦ Borrower incorrectly reported in default on a LRDR

♦ Borrower incorrectly reported on a LRDR because of multiple loans

♦ Borrower incorrectly included on a LRDR

♦ Borrower incorrectly excluded on a LRDR because of an inaccurateDATE 

ENTERED REPAYMENT

Page 3.1 - 9
Borrower incorrectly included on a LRDR because of an incorrect 

date entered repayment

When the date is corrected, the borrower would move to a different cohort fiscal year. For appeal types 

not submitted via eCDR Appeals, the school should also provide LRDR pages from the cohort fiscal year 

where the borrower is included and/or excluded and, if applicable, LRDR pages from the cohort fiscal 

year where the school believes the borrower should be included.

Allegation What does the school 

allege?

What is the school 

requesting?

What supporting 

documentation should 

the school enclose?

Incorrect last date 

of attendance or 

less-than halftime enrollment 

date

That the correct change in 

enrollment status was 

submitted to the data 

manager or NSLDS

That the date entered 

repayment be changed

Documentation of the 

enrollment status change

Unexpired grace 

period

That the borrower re-enrolled 

at least half-time at their 

school or another school 

before the grace period ended

That the date entered 

repayment be changed

Documentation of the 

enrollment status change

Death, disability, 

bankruptcy, or 

other type of 

discharge before 

expiration of 

grace period

That the loan was discharged 

before the borrower entered 

repayment

That the date entered 

repayment be changed to the 

date the loan was discharged

Documentation that the 

loan was discharged before 

the scheduled date entered 

repayment

Loan paid in full 

prior to expiration 

of grace period

That the loan was paid in full 

before the borrower entered 

repayment

That the date entered 

repayment be changed to the 

date the loan was paid in full

Documentation that the 

loan was paid in full before 

the scheduled date entered 

repayment

Repayment began 

before expiration 

of grace period

That the borrower began 

making scheduled loan 

payments before the 

expiration of the grace period

That the date entered 

repayment be changed to the 

date the borrower started 

repayment

Documentation showing 

that the borrower made a 

full scheduled payment 

before the scheduled date 

entered repayment

Page 3.1 - 10
Borrower incorrectly reported in default on a LRDR

When the default is removed, the borrower is removed from the numerator of the cohort default 

rate calculation and would remain only in the denominator of the cohort default rate 

calculation. In all of these situations the school must provide proof of proper submission of any 

required documentation. For appeal types not submitted via eCDR Appeals, the school should 

also provide LRDR pages from the cohort fiscal year where the borrower is incorrectly reported 

in default.

Allegation What does the school allege? What supporting documentation 

should the school enclose?

In-school deferment That the borrower received an in-school 

deferment and did not default during the 

cohort default period

The in-school deferment documentation

Forbearance That the borrower received a forbearance 

and did not default during the cohort default 

period

The forbearance documentation

Death, disability, 

bankruptcy, or other 

type of loan discharge 

before default 

occurred

That the loan was discharged before the 

borrower defaulted during the cohort default 

period

Documentation that the loan was 

discharged before the default

Loan was repurchased 

and no subsequent 

claim paid

That the lender repurchased the loan due to 

incorrect claim submission and no 

subsequent default claim was paid on the 

loan during the cohort default period

(Note: Repurchases due to courtesy or a new

repayment plan will not remove the loan 

from default in the cohort default rate 

calculation)

NSLDS Screen Print showing loan 

repurchase date

Rehabilitation 

achieved

That the borrower successfully rehabilitated 

the loan for cohort default rate purposes.

Rehabilitation is the process by which a 

borrower may bring a loan out of default by 

adhering to specified repayment 

requirements

The borrower’s repayment record from 

Debt Management and Collections 

System

Loan did not default 

for cohort default rate 

purposes

Loan did not default or loan did not default 

during the cohort default period

The borrower’s repayment record from 

the servicer or the delinquency report 

from the data manager demonstrating 

the actual delinquency period

Page 3.1 - 11
Borrower incorrectly reported on a LRDR because of multiple loans

In all of these situations, the school must provide proof of submission of any required documentation.

Allegation What does the 

school allege?

What is the school 

requesting?

What supporting 

documentation 

should the school 

enclose?

Wrong social 

security number –

borrower is counted 

more than once in a 

cohort default rate 

calculation

That the borrower 

has been included 

more than once in 

the cohort default 

rate calculation 

because of two 

different social 

security numbers

The removal of the 

incorrect social security 

number and removal of the 

data if the loan is 

duplicated or the addition 

of the data under the 

correct social security 

number if the loan is not a 

duplicated loan

Documentation of the 

correct social security 

number

Borrower has 

multiple loans in 

one cohort default 

rate calculation that 

belong in several 

cohort default rate 

calculations

That the borrower 

had one or more 

breaks in 

enrollment and 

used the entire 

grace period 

before obtaining 

more loans

A change to the date 

entered repayment and 

the removal of one or 

more loans from the same 

cohort fiscal year and the 

addition of those loans to 

the correct cohort fiscal 

year

Documentation of the 

enrollment status change

Borrower has 

multiple loans that 

should be included 

in only one cohort 

default rate 

calculation

That the borrower 

was continuously 

enrolled at least 

half-time and did 

not use the entire 

grace period

A change to the date 

entered repayment and 

that all loans be moved to 

the correct cohort fiscal 

year

Documentation of the 

enrollment status history

Page 3.1 - 12
Borrower incorrectly included on a LRDR

If the allegation were upheld, the borrower would be removed from the numerator and 

denominator of the cohort default rate calculation. In both of these situations the school must 

provide proof of submission of any required documentation. For Appeal types not submitted via 

eCDR Appeals, the school should also provide LRDR pages from the cohort fiscal year where the 

borrower is incorrectly included.

Allegation What does the school 

allege?

What supporting documentation 

should the school enclose?

Loan fully 

cancelled

That the loan was fully cancelled 

within 120 days of disbursement 

(partially cancelled loans are 

included in the cohort default rate 

calculation)

Copies of the front and back of the cancelled 

check or documentation of an electronic funds 

transfer

Loan does not 

meet insurance 

requirements

That the lender did not meet the 

insurance requirements and the 

loan became an uninsured loan

Information from the data manager that the loan 

was repurchased by the lender

Borrower incorrectly excluded on a LRDR because of an incorrect 

date entered repayment (DER)

When the date is corrected, the borrower would be included in the cohort default rate 

calculation. The school must provide proof of submission of any required documentation. For 

Appeal types not submitted via eCDR Appeals, the school should also provide LRDR pages from 

the cohort fiscal year where the borrower is incorrectly excluded.

Allegation What does the school 

allege?

What supporting documentation 

should the school enclose?

Incorrect last date of 

attendance or lessthan-half-time 

enrollment date

That the correct enrollment 

status information was 

submitted to the data 

manager or NSLDS

Documentation of the enrollment status change

Page 3.1 - 13
3.2Monitoring Loans Throughout 

the Year Using NSLDS Reports

Utilizing NSLDS
What kinds of information should a school track before the release of the 

cohort default rates?

On at least a monthly basis, school staff should compare the default and repayment status 

reports available through the National Student Loan Data System (NSLDS) with theschool’s 

own data. This gives the school a chance to identify and correct errors before the draftor

official cohort default rates are released. If an error is found in a student’s record, the school 

should contact the appropriate data manager to resolve the discrepancy.

If a school staff discovers that a student enrolled at least half-time in an eligible program at 

their school is being reported as “in repayment” in an NSLDS report, the school must update 

the student’s enrollment status in NSLDS. The school should also contact the data manager.

The repayment information in NSLDS does not provide information regarding a borrower’s 

delinquency status for loans not serviced by the Federal Loan Servicers (FLS). For information 

about a borrower’s possible delinquency status for loans held by a FLS, a school can view 

“Delinquent Borrowers” information under the Aid tab on the NSLDS Professional Access 

website or run the DELQ01 report available under the Reports tab. For information for loans 

not serviced by a FLS, contact the data manager for the loan(s) as listed under “Loan History”.

What are the benefits of reviewing repayment information regularly? 

Repayment information also helps schools ensure the data reported to NSLDS is accurate. 

Schools that monitor borrowers’ repayment and default status can contact data managers as 

errors occur instead of waiting until the release of the cohort default rates to correct 

inaccuracies.

Schools that monitor borrowers’ repayment status can identify borrowers who have just 

entered repayment and make sure that they are aware of all of the repayment options 

available to them. This information can help a borrower avoid default.

How can I find out the current repayment status of students from my 

school?

The School Repayment Information Loan Detail (DRC015) provides the current repayment 

status of certain borrowers in the FFEL and Direct Loan programs who attended a school 

during a specific period. Schools can request detailed repayment information for the most 

current 24-month period. As the most current 24-month period is only available on NSLDS for 

a month, it may be useful to download the information each month. The school can then 

select the students who fall into a specific cohort period and compare the NSLDS repayment 

data with the school’s data. The reports may be received in a formatted report (Message 

Class: SHNOTROP) or an extract file (Message Class: SHNOTEOP). The School Repayment 

Information Loan Detail (DRC016) provides the current repayment status of certain borrowers 

in the FFEL and Direct Loan programs who attended a school during a specific period. Schools 

can request detailed repayment information for the most current 36-month period. The 

reports may be received in a formatted report. (Message Class: SHNOTROP) or an extract file 

(Message Class: SHNOTEOP).

Page 3.2 - 2
How can I find out when the student borrowers at my school 

are scheduled to go into repayment?

The Date Entered Repayment Report (DER001) is a list of student borrowers 

who are scheduled to go into repayment during a specified date range and are 

currently enrolled with loans in good-standing, with their loan histories. The 

school may specify the ‘begin’ and ‘end’ dates for the date range, specify one of 

three sort orders (SSN, Name or Date Entering Repayment), and choosewhether 

to receive the information as a formatted report (Message Class: AHSLDSOP) or 

an extract file (Message Class: AHSLDEOP). Schools receive the report via their 

SAIG mailboxes.

How can I get a list of students from my school whose loans 

have defaulted?

The Borrower Default Summary Report (SCHDF2) provides a list of loans that 

currently have a defaulted loan status (DB, DL, DO, DT, DU, DW, DF, or DZ) and a 

loan status date that falls within the requested date range. Users can select all

loan programs or only one. The report includes student identifiers, loan 

identifiers, Guaranty Agency information, Federal Servicers, and lender 

information. It also includes the current loan status and up to three status 

codes from history. The report can be sorted by Loan Status Date, Last Name, or 

Social Security Number. The information is available in an extract file. The file 

layouts for the extract files are available on the IFAP website. Schools receive 

the report via the SAIG mailbox. Additional hints for printing the report in 

Microsoft Word format are available in the Report List Help page.

What other types of repayment information are available? 

Schools can view summary repayment information by selecting the “Org” tab on 

the NSLDS website. (See the instructions at the end of this chapter).

The summary listing shows—

♦ the number of borrowers who entered into repayment in the first 12 

months of the most recent 24-month period, and

♦ the number of those borrowers who entered into repayment in the 

first 12 months of the most recent 24-month period and defaulted or 

met other specified conditions during that 24-month period

♦ the number of borrowers who entered into repayment in the first 12 

months of the most recent 36-month period, and

♦ the number of those borrowers who entered into repayment in the 

first 12 months of the most recent 36-month period and defaulted or 

met other specified conditions during that 36-month period.

The DRC015, DRC016, 

DELQ01, DER002, SCHPR1

and SCHDF2 reports are 

available under the 

“Reports” tab on the 

NSLDS website. See the 

end of this chapter for 

complete instructions for 

downloading NSLDS 

reports.

Page 3.2 - 3

The layout of the repayment information extract file follows the layout of the electronic 

loan record detail report extract file. See Chapter 2.3, “Reviewing the Loan Record

Detail Report,” for a guide to the extract file.
The summary listing displays a snapshot that may be useful to determine default trends on 

loans entering in repayment obtained at the school during a 24 or 36 month-period. Note that 

this data is provided solely for informational purposes only and that it has no relationship to 

the calculation of draft or official cohort default rates for a school and will not be used in that 

process. The information reported is based on information provided by the data manager.

As mentioned earlier, you may also download a loan detail file for the most recent 24-month 

period (DRCO15) or 36-month period (DRCO16). This file will include—

♦ an individual listing of all the selected borrowers tallied in the 

summary format, and

♦ information about each of the relevant loans for each borrower 

included on the report.

This information is the same type of data provided on a school’s loan record detail report 

(LRDR).

Is repayment information subject to the Privacy Act?

Because repayment information contains personal identification information about 

borrowers who received loans under the Federal Family Education Loan (FFEL) and William

D. Ford Federal Direct Loan (Direct Loan) programs, the Privacy Act of 1974 and the Family 

Educational Rights and Privacy Act (FERPA) apply to all repayment information. State and 

local laws and regulations may also govern the use of this material. Recipients must take 

appropriate steps to ensure that this material is used and discarded properly.

What is the DELQ01 report?

The Delinquent Borrower Report (DELQ01) provides school users a report of borrowers who 

have been reported as delinquent in making loan payments to one of the federal loan 

servicers. The report does not include borrowers who have loans held by Guaranty Agencies. 

To assist schools with delinquency/default prevention, this information contains the student's 

demographic data including address, phone numbers, and email address, as well as loan data 

including date, type, total outstanding balance, and current monthly payment amount. Users 

will enter a school identifier. Users may choose to receive all the data at the main branch 

level of the six-digit OPEID or enter a branch location by including the eight digit OPEID. The 

user can specify a single federal loan servicer or all, designate the cohort year, and select one 

or more delinquency periods. The default asterisk (*) indicates "all" for that fieldselection.

The user selects an output Type as Report or Extract, a sort order of SSN or Last/First Name, 

and, with the Extract option, chooses Standard or Comma Delimited format. School users 

receive the report via their SAIG mailbox.

Page 3.2 - 4
What is the SCHPR1 report?

The School Portfolio Report (SCHPR1) provides school users with information about all Direct 

Loan and/or FFEL program loans for a specified school. This report includes loans that are 

serviced by all servicers, including the federal loan servicers, and provides identifying 

information about the servicer for each loan. Parameters for the report that a user may 

select include a repayment begin and end date range of three years or less. The user may 

also limit the loans returned based on the loan status categories of All, Open, Closed, 

Defaulted, Payment Suspended (deferment, forbearance), In-School, In-Repayment, Open 

Disability, and Un-reinsured. Additionally, the user may limit the loans returned based on the 

loan program (Direct Loan, FFEL, or both). Finally, the user may choose to receive all the data 

at the six-digit OPEID level (leave the asterisk (*) in the branch ID field) or enter a branch 

location by including the eight-digit OPEID. If a school has merged into a new or existing 

OPEID, the loans associated with the previous OPEID will be included in the new or existing

OPEID's report output. The report output is sorted by SSN or Last/First Name and is available 

in extract format only. The extract file layout is available in the NSLDS User Documentation. 

School users receive the extract via their SAIG mailbox.

Page 3.2 - 5
3.2.2 Reading The Layouts

A continuation of chapter 3.2
Obtaining Summary Repayment Information from NSLDS

Note: To access a school’s summary repayment information, an 

individual at the school must have an FSA User ID. This is a restricted 

data system, and each user at a school has been assigned an 

individual User ID and password. To obtain an FSA User ID, contact 

CPS/SAIG Technical Support at 1-800-330-5947.

Step 1: Log on to the NSLDS Professional Access website by entering 

your FSA User ID and password after clicking “Click to Continue.”

Address: nsldsfap.ed.gov

Read the Privacy Act statement and confirm that you are an 

authorized user of NSLDS and that you will adhere to the Privacy Act 

by clicking “I Agree.”

Step 2: Once logged on to NSLDS, select the “Org” tab from the main menu bar 

at the top of the screen.

Step 3: Under the “Org” tab select “Repayment Information.”

Step 4: View the school’s summary repayment information.

Page 3.2.2 - 2
Obtaining Detailed Repayment Reports from NSLDS

You must use the NSLDS Professional Access website to request detailed 

repayment information. Once the request has been made via the NSLDS 

website, the detailed file format is delivered to the Student Aid Internet 

Gateway (SAIG) mailbox associated with the FSA online User ID making 

the request. EDconnect software is used to download the detailed file 

format from the user’s SAIG mailbox. Therefore, in order to request 

detailed file format repayment information, the requestor must have an 

FSA User ID, an SAIG account, and EDconnect software. (For help in 

obtaining IDs and software, contact CPS/SAIG Technical Support at 1-800-

330-5947.)

SUBMITTING THE REQUEST TO NSLDS

Step 1: Log on to the NSLDS Professional Access website by entering your 

FSA User ID and password and clicking “Login.”

Address: nsldsfap.ed.gov

Read the Privacy Act statement and confirm that you are an authorized 

user of NSLDS and that you will adhere to the Privacy Act by clicking “I 

Agree.”

Step 2: Once logged on to NSLDS, select the “Report” tab from the 

menu bar at the top of the screen.

Step 3: Under the Report function, click on the blue number box to the left side of the 

screen for “Date Entered Repayment Report,” “School Repayment Info Loan Detail,” or 

“Borrower Default Summary Report.”

Page 3.2.2 - 3
Step 4: Set the report parameters on the next page that appears.

Report Format. All four of the reports give you the option of receiving the 

data in Extract or Report format.

• With an extract a school can customize the data by querying andsorting 

the repayment information based on the school’s individual needs.

• A report can be accessed using standard word processing software.

• With an extract a school can customize the data by querying and sorting 

the repayment information based on the school’s individual needs.

Loan Selection (DRC015, DRC016). This option will determine which loans 

are included in the “School Repayment Information Loan Detail” report.

Loan Selection DRC015

• “ALL” — contains all of the loans included in the denominator only and numerator only 

reports.

• “DENOMINATOR ONLY” — contains all of the loans that entered repayment during the 

first 12 months of the most recent 24-month period and did not default during that 24-

month period.

• “NUMERATOR ONLY” — contains only those loans that entered repayment during the 

first 12 months of the most recent 24-month period and defaulted during that 24-

month period.

Loan Selection DRC016

• “ALL” — contains all of the loans included in the denominator only and numerator only 

reports.

• “DENOMINATOR ONLY” — contains all of the loans that entered repayment during the 

first 12 months of the most recent 36-month period and did not default during that 36-

month period.

• “NUMERATOR ONLY” — contains only those loans that entered repayment during the 

first 12 months of the most recent 36-month period and defaulted during that 36-

month period.

Date Range (DER001, SCHDF1) For two reports, you can specify a date range for the 

students.

• Date Entered Repayment (DER001) Report will show student borrowers with loan 

history who are scheduled to go into repayment during the specified date range. 

Borrowers returned will be in current attendance at the requestor’sschool.

• Borrower Default Summary Report (SCHDF1) Report will show all loans that currently 

have a defaulted loan status(DB, DL, DO, DT, DU, DW, DF, or DZ) and a loan status date 

that falls within the requested date range.

Page 3.2.2 - 4
Loan Type (SCHDF1) You can specify that Direct Loans, FFEL, Perkins, or 

“All” be included in the “Borrower Default Summary Report.”

Sort By This option will determine the order of the report/extract.

School Repayment Loan Detail DRC 015, DRC 016

• “SSN” sorts the borrowers in Social Security Number order.

• “CLAIM CODE, SSN” sorts by claim code and then by SSN.

• “LOAN STATUS, SSN” sorts by loan status code and then by SSN.

Date Entered Repayment DER 001

• “SSN” sorts the borrowers in Social Security Number order.

• “Name” sorts by the borrowers name.

• “DER” sorts by the Date Entered Repayment.

Default Loan Summary SCHDF1

• “SSN” sorts the borrowers in Social Security Number order.

• “Last Name” sorts by the borrowers last name.

“Loan Status Date” sorts by the Date Entered Repayment.

Step 5: Verify that the information is correct and click “Confirm.”

A message will appear indicating the request was successfully submitted.

If the repayment information is requested before 10 a.m. EST, the file will usually be 

available by the end of that business day. If the repayment information is requested

after 10 a.m. EST, the file will usually be available by the next business day.

After completing these steps, a school can return to Step 4 and select the other option 

if the school so wishes. That is, a school that selects an extract at Step 4 can return to 

that step and also select a report.

Page 3.2.2 - 5
Downloading Repayment Information from the SAIG Mailbox

Before downloading the repayment result information from the SAIG 

mailbox, ensure the TG# mailbox associated with the FSA online User ID 

you used when logging on to the NSLDS website is set up in the 

EDconnect software. If this has not been done, contact CPS/SAIG 

Technical Support at 1-800-330-5947.

Step 1: Log onto the Edconnect software 

using the User ID associated with the 

NSLDS User ID that made the request for 

repayment information.

Step 2: Select Now from the Transmission menu.

Step 3: Once EDconnect has finished processing 

the Transmission Now request, select “Mailbox 

Query” from the New option on the File menu.

Step 4: EDconnect will provide a list of those files that are available for 

download. From the list of files available to be downloaded, identify the 

repayment information that was requested.

The message classes for repayment information consist of eight letters: 

AHSLDSOP Date Entered Repayment (Report) DER001

AHSLDEOP Date Entered Repayment (Extract)DER001

SHNOTROP School Repayment Information Loan Detail (Report) DRC015 

SHNOTEOP School Repayment Information Loan Detail (Extract) DRC015 

SHNOTEOP School Repayment Information Loan Detail (Extract) DRC016 

AHSLDSOP Default Loan Summary Report (Report) SCHDF1

AHSLDEOP Default Loan Summary Report (Extract)SCHDF1

Step 5: Place a check mark in the Move to TQ column next to the message 

class associated with the requested repayment information.

Step 6: Select Now from the Transmission menu.

EDconnect will download the file to the designated directory. At this 

point, a school can rename the file. A school may wish to name a file for 

the date the file was downloaded.

Step 7: Access the file.

For questions about the SAIG mailbox or downloading files, contact 

CPS/SAIG Technical Support at 1-800-330-5947.

Page 3.2.2 - 6
Viewing Delinquent Borrowers Information on NSLDS

Note: To access a school’s delinquent borrower information, an individual at the 

school must have an NSLDS User ID. This is a restricted data system, and each 

user at a school has been assigned an individual User ID and chooses a password. 

To obtain an FSA User ID, contact CPS/SAIG Technical Support at 1-800-330-

5947.

Step 1: Log on to the NSLDS Professional Access website by entering your FSA 

User ID and password and clicking “Login.”

Address: nsldsfap.ed.gov

Read the Privacy Act statement and confirm that you are an authorized user of 

NSLDS and that you will adhere to the Privacy Act by clicking “I Agree.”

Step 2: Once logged on to NSLDS, select the “Aid” tab from the main menu bar at 

the top of the screen.

Step 3: Under the “Aid” tab select “Delinquent Borrowers.”

Step 4: Enter the criteria for the delinquency records you wish to view.

Branch Code. Report will show all the reported delinquent loans at the sixdigit OPEID level (leave the asterisk (*) in the branch code field) or enter a 

branch location by including the eight-digit OPEID.

Federal Loan Servicer. Report will show the delinquent loans reported by 

the selected servicer. Leave * (default) to select all federal loan servicers. 

Use the Org Search button next to thisfield for a list of all currently available 

servicers.

Cohort Year. Report will show all delinquent loans falling under the specified 

Cohort Year. Leave * (default) to select all Cohort Years.

Delinquency Period. Delinquency Period will show all delinquent loans 

falling under the specified Period. A single Delinquency Period or a 

combination of periods may be selected. Periods that are not selected (not 

marked as Yes) will automatically default to No.

Page 3.2.2 - 7
Page 3.2.2 - 8

Step 5: After clicking the “Retrieve” button, delinquent borrower information 

matching the criteria you selected will display.
Obtaining Delinquent Borrower and School Portfolio Reports from NSLDS

You may use the NSLDS Professional Access website to request detailed 

delinquent borrower and school loan portfolio information for students 

that are attending or attended your school. Once the request has been 

made via the NSLDS website, the detailed file format is delivered to the 

Student Aid Internet Gateway (SAIG) mailbox associated with the FSA 

online User ID making the request. EDconnect software is used to 

download the detailed file format from the user’s SAIG mailbox.

Therefore, in order to request detailed file format delinquent borrower 

information, the requestor must have an FSA User ID, an SAIG account, 

and EDconnect software. (For help in obtaining IDs and software, contact 

CPS/SAIG Technical Support at 1-800-330-5947.)

SUBMITTING THE REQUEST TO NSLDS

Step 1: Log on to the NSLDS Professional Access website by entering your 

FSA User ID and password and clicking “Click to Continue.”

Address: nsldsfap.ed.gov

Read the Privacy Act statement and confirm that you are an authorized 

user of NSLDS and that you will adhere to the Privacy Act by clicking “I 

Agree.”

Step 2: Once logged on to NSLDS, select the “Report” tab from the menu 

bar at the top of the screen.

Step 3: Under the Report function, click on the blue number box to the left 

side of the screen for “Delinquent Borrower Report,” or “School Portfolio 

Report.”

Page 3.2.2 - 9
Step 4: Set the report parameters on the next page that appears.

Report Format. The Delinquent Borrower (DELQ01) report gives you the 

option of receiving the data in Extract or Report format.

• With an extract a school can customize the data by querying and sorting 

the repayment information based on the school’s individual needs.

• A report can be accessed using standard word processing software.

Report Parameters DELQ01.

School Branch ID DELQ01. Report will show all the reported delinquent 

loans at the six-digit OPEID level (leave the asterisk (*) in the branch ID 

field) or enter a branch location by including the eight-digit OPEID.

Federal Loan Servicer DELQ01. Report will show the delinquent loans 

reported by the selected servicer. Leave * (default) to select all federal 

loan servicers. Use the Org Search button next to this field for a list of all 

currently available servicers.

Cohort Year DELQ01. Report will show all delinquent loans falling under 

the specified Cohort Year. Leave * (default) to select all Cohort Years.

Delinquency Period DELQ01. Delinquency Period will show all delinquent 

loans falling under the specified Period. A single Delinquency Period or a 

combination of periods may be selected. Periods that are not selected (not 

marked as Yes) will automatically default to No.

Extract Type DELQ01. Batch file format in which the information is sent 

as a "string" of data.

• Comma Delimited- raw data document similar to a Fixed Widthreporting 

type. However, with Comma Delimited, the fields are separated by 

commas, rather than an explicit number of spaces.

• Standard- raw data document generated in a fixed width reporting 

format.

.

Date Entered Repayment Begin and End date range (SCHPR1). Report 

will show DL or FFEL loan who are scheduled to go into repayment during

Page 3.2.2 - 10
Sort By DELQ01

• Select “SSN” sorts the borrowers in Social Security Number order.Or,

• “Last/First Name” sorts by the borrower’s last and first name

Report Format. The School Portfolio (SCHPR1) report is available in

Extract format only.

• With an extract a school can customize the data by querying and sorting 

the repayment information based on the school’s individual needs.

Report Parameters (SCHPR1).

School Branch ID (SCHPR1). Report will show all Direct Loans and FFEL 

loans at the six-digit OPEID level (leave the asterisk (*) in the branch ID 

field) or enter a branch location by including the eight-digit OPEID.

• Payment Suspended

o AL- Abandoned loan

the specified date range. Enter repayment begin and end date range of 

three years or less. Ranges greater than 3 years will not produce results 

and not information will be returned.

Loan Status (SCHPR1) A user can receive select all loans or limit the 

number of Loans return based on the Loan status category selected.

• All- Open and Close Loans

• Open Disability

o DI- Disability

o VA- Disabled Veteran Discharged

• Closed- All Closed loans

• Defaulted

o DB- Defaulted, Then Bankrupt, Active, Chapter 13

o DF- Defaulted, Unresolved

o DL- Defaulted, In Litigation

o DO- Defaulted, Then Bankrupt, Active, Other

o DU- Defaulted, Unresolved

o DX- Defaulted, Six Consecutive Payments

o DT- Defaulted, Collection Terminated

o DZ- Defaulted, Six Consecutive Payments, Then Missed Payment(s)

o FR- Fraud

o XD- Defaulted, Six Consecutive Payments

• In-School

o IA- Loan Originated

o ID- In School or Grace Period

o IG- In Grace Period

o IM- In Military Grace

• Open –All Open Loans

Page 3.2.2 - 11
o BK- Bankruptcy, Active

o DA- Deferred

o FB- Forbearance

• In-Repayment

o RP- In Repayment

o UA- Temporarily uninsured-loan not in default

o UB- Temporarily uninsured-loan in default

• Un-reinsured

o UC- Permanently Uninsured / Un-reinsured-loan not in default

Loan Program Type (SCHPR1). A user can receive all loans (select “Both”) 

or limit the number of Loans return by selecting the Direct Loan Program 

or FFEL loan program.

Sort By (SCHPR1)

• Select “SSN” sorts the borrowers in Social Security Number order.Or,

• “Last/First Name” sorts by the borrower’s last and fist name..

.

Step 5: Select Submit and Verify that the information is correct and click 

“Confirm.”

A message will appear indicating the request was successfully submitted. 

If the repayment information is requested before 10 a.m. EST, the file will 

usually be available by the end of that business day. If the repayment 

information is requested after 10 a.m. EST, the file will usually be 

available by the next business day. After completing these steps, a school 

can return to Step 4 and select the other option if the school so wishes.

That is, a school that selects an extract at Step 4 can return to that step 

and also select a report; or request data with different criteria, such as 

delinquency dates or loan types.

Page 3.2.2 - 12
Downloading Delinquent Borrower and School Portfolio Report Information from the SAIG Mailbox

Before downloading the delinquent borrower information or school 

portfolio information from the SAIG mailbox, ensure the TG# mailbox 

associated with the FSA User ID you used when logging on to the NSLDS 

website is set up in the EDconnect software. If this has not been done, 

contact CPS/SAIG Technical Support at 1-800-330-5947.

Step 1: Log onto the Edconnect software 

using the User ID associated with the FSA 

User ID that made the request for 

repayment information.

Step 2: Select Now from the Transmission menu.

Step 3: Once EDconnect has finished processing 

the Transmission Now request, select “Mailbox 

Query” from the New option on the File menu.

Step 4: EDconnect will provide a list of those files that are available for 

download. From the list of files available to be downloaded, identify the 

repayment information that was requested.

The message classes consist of eight letters: 

DELQFMOP Delinquent Borrower (Report) DELQ01

DELQCMOP Delinquent Borrower(Extract: Comma Delimited) DELQ01 

DELQFFOP Delinquent Borrower (Extract :Fix Length ) DELQ01 

AHSLDEOP School Portfolio (Extract) SCHPR1

Step 5: Place a check mark in the Move to TQ column next to the message 

class associated with the requested repayment information.

Step 6: Select Now from the Transmission menu.

EDconnect will download the file to the designated directory. At this 

point, a school can rename the file. A school may wish to name a file for 

the date the file was downloaded.

Step 7: Access the file.

For questions about the SAIG mailbox or downloading files, contact 

CPS/SAIG Technical Support at 1-800-330-5947.

Page 3.2.2 - 13
3.3Data Manager Strategies

DM Responsibilities Relating to CDRs
Why should a data manager review this chapter?

Data managers should review this Guide for information regarding cohort default rates. This 

chapter contains basic strategies to prepare a data manager for the release of the cohort 

default rates as well as strategies to help a data manager process challenges, adjustments, 

and appeals.

What strategies can a data manager employ before the release of the 

draft and official cohort default rates?

There are numerous strategies a data manager can employ before the release of the draft 

and official cohort default rates:

♦ determine the data manager staff responsible for processing all cohort default

rate challenges, adjustments, and appeals;

♦ establish school and the Department of Education (the Department) cohort default rate 

contacts within the data manager organization and provide updates to schools and the 

Department when those contacts change;

♦ notify the Department if data manager address or corporate structure changes;

♦ identify staff responsible for enrollment changes;

♦ keep copies of all relevant correspondence between the data manager andschools, 

lenders, and the Department;

♦ timely submit, in accordance with Department regulations, changes in a borrower’sloan 

information to the National Student Loan Data System (NSLDS) and print NSLDS screen 

to show acceptance of data manager changes;

♦ develop a plan to assist schools that enhances understanding of what reports and 

information a school can obtain from the data manager and describes how a school can 

correct the information; and

♦ use this Guide as a reference when discussing cohort default rate matters with schools.

A data manager may wish to develop a checklist, specific to the data manager’s needs, of the 

activities the data manager needs to do before, during, and after the release of the draft and 

official cohort default rates.

Page 3.3 - 2
What strategies can a data manager employ to help process 

challenges, adjustments, and appeals?

There are a number of things a data manager should do as part of the 

challenge, adjustment, and appeal process.

♦ A data manager should contact the Department to discuss eligibility 

issues if the data manager receives any adjustments or appeals from a 

school on the Department’s sanction list. When the official cohort 

default rates are released, the sanction list is made available online 

under “Default Management” on the Information for Financial Aid 

Professionals (IFAP) Web site (ifap.ed.gov).

♦ A data manager should review prior challenge, adjustment, and/or 

appeal responses if the data manager believes the school is attempting 

to submit a challenge, adjustment, or appeal for a borrower who was 

addressed in a previous challenge, adjustment, or appeal.

♦ A data manager should contact a school as soon as possible if theschool 

does not include all the appropriate challenge, adjustment, or appeal 

materials.

♦ A data manager should contact the Department if assistance is needed 

to make a determination on a school’s data, supporting documentation, 

or other information submitted as part of the challenge, adjustment, or 

appeal process.

♦ A data manager should inform schools and the Department if the data 

manager is unable to comply with time frames due to the data 

manager’s workload.

A data manager must 

ensure that the data 

is successfully 

entered into NSLDS.

What should a data manager do if it receives an incorrect 

submission from a school?

A data manager should contact a school as soon as possible if a school incorrectly asks for 

guidance about or submits an uncorrected data adjustment, participation rate index challenge, 

economically disadvantaged appeal, participation rate index appeal, average rates appeal, or 

thirty-or-fewer borrowers’ appeal to the data manager. The data manager should inform the 

school that the materials or question must be submitted to the Department within the 

appropriate time frame. The data manager must also inform the Department of the incorrect 

submission.

Page 3.3 - 3
When using the eCDR Appeals system, if you do not hold the loan that is being challenged, you should 

forward the DM adjustment ID to the correct data manager, following the guidelines in the relevant User 

Guide, which is available on the eCDR Appeals homepage.

What should a data manager do if the school’s challenge, adjustment, or 

appeal is successful?

After a school’s successful incorrect data challenge, the data manager must update NSLDS and 

the data manager’s internal records with the new information prior to the calculation of the 

next official cohort default rates. The data manager must also submit to NSLDS any 

subsequent incorrect data challenge changes submitted to the data manager by the 

Department.

After a data manager is informed by the Department that a school’s new data adjustment, 

uncorrected data adjustment, or erroneous data appeal was successful, the data manager 

must update NSLDS and the data manager’s internal records with the new information prior 

to the calculation of the next draft cohort default rates.

A data manager must ensure that the data is successfully entered into NSLDS. A data manager 

should review the NSLDS error report. Contact NSLDS Customer Service at 1-800-999-8219 for 

submission assistance.

Page 3.3 - 4
4.1Incorrect Data Challenge

Challenging Draft CDR Data
What is an incorrect data challenge?

After the release of the draft cohort default rates, the U.S. Department of Education (the 

Department) provides schools an opportunity to review the draft data and, if necessary, work 

with the data manager responsible for the loans to correct any errors. The process of 

correcting data is called an incorrect data challenge.

Incorrect Data Challenge 

Timeframe

Draft School receives draft cohort default February

Cycle rate notification package

School sends completed Incorrect Within 45 days of

Data Challenge to data manager via timeframe begin

eCDR Appeals date

Data Manager sends Incorrect Data Within 30 days of

Challenge response to the school via receipt of the

eCDR Appeals school’s incorrect

data challenge

Official 

Cycle

Not applicable

Example: If the rates were released on February 19, 2016, the count will begin on February 22, 

2016, giving schools five business days to respond. The actual 45 day timeframe would begin 

on February 29, 2016; which is the 6th business day. Please note: the 45 days are calendar 

days.

Page 4.1 - 2

The timeframe begins 

on the sixth business 

day following the 

transmission date for 

eCDR notification 

packages that is 

posted on the 

Department’s 

website.

Regulatory citations: 

34 CFR 668.204
Which schools are eligible to submit an incorrect data 

challenge?

Any school that receives a draft cohort default rate is provided the opportunity 

to submit an incorrect data challenge. Because the draft data forms the basis 

for a school’s official cohort default rate, it is important that every school 

reviews its loan record detail report (LRDR) for the draft cohort default rates 

and, if necessary, submit an incorrect data challenge. Even schools that have 

withdrawn from the William D. Ford Federal Direct Loan (Direct Loan) program 

should review the LRDR for the draft cohort default rates and, if appropriate, 

submit an incorrect data challenge.

Challenging draft cohort default rate data enables a school to request a

correction to what it believes to be inaccurate data contained in the school’s 

LRDR for the draft cohort default rates. A LRDR for the draft cohort default 

rates contains inaccurate data if:

♦ a borrower’s data was incorrectly reported in the draft cohortdefault 

rate calculation,

♦ a borrower was incorrectly included in the draft cohort defaultrate 

calculation, and/or

♦ a borrower was incorrectly excluded from the draft cohort default rate 

calculation.

Please note that if a school is alleging an incorrect date entered repayment but 

failed to accurately report the borrower’s enrollment status to the National 

Student Loan Data System (NSLDS), the data manager will deny the school’s 

challenge. If the school does not provide enrollment status changes, the data 

manager will use the best information available to determine the repayment 

date. This date will be used for purposes of calculating the school’s cohort 

default rate.

It is important to correct inaccurate data through an incorrect data 

challenge for a number of reasons:

♦ A school will not have a second opportunity to submit an incorrect 

data challenge; in its review, the school needs to ensure that no 

discrepancies exist among its records, the information obtained from 

outside sources, and the LRDR for the draft cohort defaultrates.

♦ The loan information used to calculate the draft cohort default rate 

will be used to calculate the school’s official cohort default rate;the 

school needs to ensure that this data is accurate because official 

cohort default rates can result in certain benefits for the school or 

sanctions against the school.

♦ An incorrect data challenge will preserve a school’s right to submit 

an uncorrected data adjustment if the agreed upon changes are not 

reflected in the official cohort default rate.

Page 4.1 - 3
♦ An incorrect data challenge will preserve a school’s right to submit an erroneous data 

appeal on the basis of disputed data if the school is subject to sanction after the release 

of the official cohort default rates.

What benefit will a school gain from submitting an incorrect data 

challenge?

If it is determined that the draft cohort default rate data is inaccurate, and the data manager 

responsible for the inaccurate data agrees to make a change to the data, the school’s official 

cohort default rate should reflect the change. The change to the data may lower, raise, or not 

affect the cohort default rate.

If the agreed upon changes are not reflected in the official cohort default rate, a school may

submit an uncorrected data adjustment to the Department after the release of the official 

cohort default rates to request that the Department make the manual change to the school’s 

cohort default rate.

If the data manager does not agree to change the data in a school’s incorrect data challenge 

and the school is subject to sanction after the release of the official cohort default rates, the 

school may submit an erroneous data appeal based on the data the school believesis

inaccurate if that data was challenged in the school’s incorrect data challenge.

What roles do the Department and data managers have in a school’s

incorrect data challenge?

A data manager is required to review a school’s incorrect data challenge allegations if the 

incorrect data challenge allegations are submitted before the deadline and the data manager 

has responsibility for the loans. The data manager must respond to the school’s incorrect data 

allegations within 30 calendar days of receipt. The guarantor/servicer code on the LRDR

identifies the data manager for a loan. See Chapter 2.3, “Reviewing The Loan Record Detail 

Report,” for information on determining the data manager for a loan.

The Department has two roles in the incorrect data challenge process. The primary role is to 

review a data manager’s response to a school’s incorrect data challenge to ensure that the 

response is correct.

The Department’s other role is to respond to a school’s incorrect data challenge if the 

Department is the data manager for the loans being challenged. The Department is the data 

manager for FFELs the Department holds and for all Direct Loans. The Department as data 

manager responds directly to a school’s incorrect data challenge for certain FFELs that the 

Department holds. The Department as data manager responds through its servicers to a 

school’s incorrect data challenge for all Direct Loans and for certain FFEL loans the 

Department holds.

Page 4.1 - 4
When must a school submit an incorrect data challenge? 

Timing is critical when submitting an incorrect data challenge. In order to 

submit an incorrect data challenge, a school must review the LRDR for thedraft

cohort default rates to determine if the LRDR contains any inaccurate data. If

the school believes the LRDR contains inaccurate data, it should submit an 

incorrect data challenge listing the school’s incorrect data allegations. The

school must submit the incorrect data challenge within 45 calendar days of the 

timeframe begin date.

How does a school submit an incorrect data challenge?

All schools must submit their incorrect data challenge via the electronic 

Cohort Default Rate Appeals (eCDR Appeals) system. The eCDR Appeals system 

is a web-based application that allows schools to submit their incorrect data 

challenge allegations electronically, allows the data manager to respond 

electronically, and allows the Department to review the data manager

response electronically. Submitting the incorrect data challenge electronically 

helps to ensure that each incorrect data challenge allegation is properly routed 

to the correct data manager in an appropriate fashion. It also allows for greater 

protection of personally identifiable information. While the hyperlink above 

will take users directly to the eCDR Appeals homepage, a link to the eCDR 

Appeals system is also available from the Default Management website.

How does a school register to use eCDR Appeals?

All users must complete the registration process in order to use the eCDR Appeals system. 

Complete instructions for registering for eCDR Appeals can be found in the eCDR Appeals

Registration and User Account Guide. A direct link to this guide, as well as a link to a video 

demonstration of the registration process, can be found on the eCDR Appeals homepage.

Where can a new user find guidance on submitting an incorrect data 

challenge using eCDR Appeals?

The eCDR Appeals homepage contains a link to the eCDR Appeals Incorrect Data Challenge

User Guide. There are separate User Guides for each challenge, adjustment and appeal type 

that may be submitted using eCDR Appeals. Additionally, the eCDR Appeals homepage 

contains a link to video demonstrations for each challenge, adjustment and appeal type that 

may be submitted using eCDR Appeals.

What information must a school gather to prepare its incorrect data 

challenge?

A school submitting an incorrect data challenge will need to enter the following information 

for each borrower that the school alleges contains inaccurate data:

Page 4.1 - 5

More information:

• Chapter 2.3, “Reviewing the Loan Record Detail Report,” explains how to review the LRDR for inaccurate data.

• Chapter 3.1, “Reviewing Rates and Loan Data,” lists examples of incorrect data challenge allegations a school may submit as a part of 

an incorrect data challenge.

A school will 

not have a 

second 

opportunity to 

submit an 

incorrect data 

challenge.
♦ The borrower SSN, name, basis of alleged error (chosen from a drop-down listing), last date 

of attendance, date entered repayment, default date (if applicable) and effect on calculation. This 

information will be entered on the Adjustment Details screen in eCDR Appeals.

♦ Copies of relevant supporting documentation (see Chapter 3.1,”Reviewing Rates andLoan 

Data,” for examples of other supporting documentation that a school must submit). This 

information must be available in an electronic format as it must be uploaded to eCDRAppeals.

♦ Copies of the appropriate pages from the LRDR are no longer required from the school,as 

the LRDR will be pre-loaded into eCDR Appeals when the school initiates its incorrect data 

challenge.

Once the school has entered all of its allegations and is ready to submit the case, the school will be 

required to upload the CEO certification letter. This letter must be available in an electronic 

format. A sample CEO certification letter is provided at the end of this chapter.

How does a data manager respond to a school’s incorrect data challenge? 

Data managers will receive email notification from eCDR Appeals when an incorrect datachallenge 

has been submitted that includes borrower loans that the data manager currently holds. Data

managers must respond to a school’s submitted incorrect data challenge via the eCDR Appeals

system. Timing is critical when responding to a school’s incorrect data challenge. A data manager 

is required to respond to a school’s submitted incorrect data challenge for those loans which the 

data manager holds within 30 calendar days of receipt. The eCDR Appeals system monitors the 

timelines/deadlines for all cases. eCDR Appeals does not permit a school to submit a case after it’s 

deadlines have passed.

A data manager must review each incorrect data challenge allegation submitted by the 

school to determine the following:

• The data manager should determine if the incorrect data challenge allegations 

presented by the school are based on loans that the data manager currently holds. 

If the data manager does not hold the loans for some or all of the allegations, the 

data manager should forward the allegation to the data manager that currently 

holds the loans in question.

• The data manager should determine if all necessary supporting documentation is 

present. If a school fails to provide the data manager with all necessary 

supporting documentation, the data manager may ask the school to submit the 

missing information. However, the school must submit this additional supporting 

documentation to the data manager within the initial 45-calendar-day deadline for 

submitting incorrect data challenges. If the school does not submit the additional 

supporting documentation within the deadline, the data manager will notconsider 

the additional supporting documentation in its review of the incorrect data 

challenge allegation.

Page 4.1 - 6
• The data manager should determine if its documentation supportsor 

refutes each of the incorrect data challenge allegations submitted by 

the school.

The data manager should agree with the school if the data manager’s

documentation supports the school’s claim or if the school has demonstrated 

that the data manager has failed to take into account correct information the 

school sent to the data manager or the National Student Loan Data System 

(NSLDS).

The data manager should disagree with the school if the data manager’s 

documentation refutes the school’s claim or if the school failed to demonstrate 

that the correct information was submitted to the data manager or NSLDS. The 

data manager must explain to the school in the “Comments” field why it

disagrees with the school and include a copy of the data manager’s supporting 

documentation.

After making its determinations, the data manager must enter a response to 

each incorrect data challenge allegation submitted by the school. The 

responses will be entered on the Data Manager Adjustment Details screen in 

eCDR Appeals. If the data manager agrees that a change should be made, it 

must correct the data in its internal data system and in NSLDS. Before the 

calculation of the official cohort default rates, the data manager must ensure 

that the changes it agreed to make were successfully loaded into NSLDS. The 

data manager should check the NSLDS error report.

The data manager’s response must include the following:

♦ An indication that the data manager agrees or disagrees that an 

effect on the calculation is warranted. If the data manager 

disagrees, they must indicate the correct last date of attendance, 

date entered repayment and default date (if applicable), as well as a 

comment indicating why the data manager disagrees with the 

school’s allegation.

♦ Copies of supporting documentation for each incorrect data 

challenge allegation with which the data manager disagreed.

Page 4.1 - 7
What does a school do with a data manager’s incorrect data challenge

response?

Once a data manager has submitted its response to the school’s incorrect data challenge, the 

school will receive an email notification from eCDR Appeals. The school should review the 

data manager response for each of the allegations included in the incorrect data challenge. In 

those cases where the data manager’s response is unclear, incorrect, missing, or incomplete, 

the school may submit a request to the data manager for clarification. A school must submit 

the request via eCDR Appeals within 15 calendar days of the receipt of the incorrect data 

challenge response. The data manager should respond to the school’s inquiry within 20 

calendar days of receipt. A school cannot appeal a data manager’s final incorrect data 

challenge response during the draft cycle. An incorrect data challenge response can only be 

appealed during the official cycle if the school meets the qualifications to submit an 

erroneous data appeal, as explained in Chapter 4.5.

What does the Department do with a data manager’s incorrect data

challenge response?

The Department reviews the data manager response to ensure that the response is correct. 

If the Department has any questions regarding a data manager response, the Department 

will request additional information from the data manager. If the data manager made an 

error in its response, the Department will request that the data manager correct their 

response in eCDR Appeals. The data manager will also need to resubmit the corrected data 

to NSLDS and correct its internal records.

What happens after the Department has completed its review of the 

incorrect data challenge?

After the Department completes its review of the incorrect data challenge, the Department 

closes the case in eCDR Appeals. Once a case is closed, it will remain in the Current Cases 

listing for the remainder of the cohort year for viewing and printing; however, it can no 

longer be modified. Email notifications will automatically be sent to the school and to all 

data managers included in the case, informing them that the incorrect data challenge has 

been finalized and closed. At this point the schools and data managers can view and print 

the finalized case and access all relevant reports available from eCDR Appeals.

Page 4.1 - 8
Sample CEO Certification Letter

The letter must include the school’s OPE ID number, a statement indicating that the school is 

submitting an incorrect data challenge, and the cohort fiscal year to which the incorrect data 

challenge applies. The letter must feature a subject line that reads “Subject: Cohort FY [insert 

cohort fiscal year being used in the incorrect data challenge] Incorrect Data Challenge.” The 

letter must include a certification that the information provided is true and correct under penalty 

of perjury. The school’s President/CEO/Owner must sign the letter, and the signature must be 

followed by a signature block showing the signer’s name and job title.

Page 4.1 - 9

Alexander Peachum 

President, Graphic Tech

Subject: Cohort FY 2015 Incorrect Data Challenge 

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is challenging the data found in our loan record detailreport 

for the FY 2015 draft cohort default rate. Please see the information included in the 

incorrect data challenge case submitted via eCDR Appeals.

I, the undersigned, certify under penalty of perjury, that all information submitted in support 

of this incorrect data challenge is true and correct.

Thank you for your consideration.

Sincerely,

OPE ID 099999

February 14, 2018

U.S. Department of Education 

Business Operations

Union Center Plaza, 61G3 

400 Maryland Avenue, SW 

Washington, DC 20202-5353
Page 4.1 - 10

Incorrect Data Challenge 

Checklists

School to eCDR Appeals

Determine

 Does the loan record detail report for the draft cohort rate containinaccurate 

data?

Submit to eCDR Appeals

 Relevant information for each borrower challenged

 Supporting Documentation for each borrower challenged

 CEO Certification Letter

Data Manager to eCDR Appeals

Determine

 Was the school submission before deadline?

 Does the data manager hold the loans?

 Is all the material present?

 Does the data manager agree or disagree with the school?

Response to School via eCDR Appeals

 Relevant information for each borrower challenged

 Supporting Documentation for all Disagrees

Follow-up

 Update NSLDS and internal records (if necessary)
4.2Participation Rate Index 

Challenge

Low Borrower Participation in Direct Loan Program
What is a participation rate index challenge?

A participation rate index challenge alleges that a school should not be subject to a potential 

loss of loan eligibility or potential placement on provisional certification based solely on its 

cohort default rates because the school has a participation rate index that meets one of the 

following thresholds (with the most recent draft rate considered for purposes of this challenge 

only as the most recent cohort default rate):

• For a school that is subject to potential loss of eligibility based on most recent three 

consecutive cohort default rates of 30.0 percent or greater —participation rate index 

for at least one of those fiscal years of 0.0625 orless

• For a school that is subject to potential loss of eligibility based on most recentcohort 

default rate over 40.0 percent—participation rate index of 0.0832 orless

• For a school that is subject to potential provisional certification based on two out of 

three most recent cohort default rates of 30.0 percent or greater—participation rate 

index of 0.0625 or less

Page 4.2 - 2

Participation Rate Index Challenge 

Timeframe

Draft Cycle School receives draft cohort 

default rate notification package

February

School sends completed 

Participation Rate Index 

Challenge to the U.S. Department 

of Education (Department)

Within 45 days 

of timeframe 

begin date

Department sends the school 

written notification of its decision 

(the decision is final and no 

further administrative review is 

provided).

Before the 

official cohort 

default rates 

are published

Official Cycle Not applicable

Regulatory citations: 

34 CFR 668.204(c)

The “timeframe begin date” is the sixth business day following the 

transmission date for eCDR notification packages that is posted on the 

Department’s website, this challenge begin date for each draft cycle is 

published in pre-release and post-release notices to a school’s SAIG 

mailbox in addition to IFAP.
Which cohort default rate can be used to determine a 

participation rate index challenge?

A school can submit a participation rate index challenge for either the most recent 

draft cohort default rate or for either of the two most recent official cohort default 

rates, depending on the nature of the rate or rates anticipated to result in a sanction. 

For example, take a sequence of years: This Year, Last Year, and Two Years Ago.

A school’s draft cohort default rate for This Year indicates that the school will be 

subject to loss of eligibility or potential provisional certification after release of the 

official cohort default rates. If the loss of eligibility will be due to three consecutive 

years of an official cohort default rate that is 30.0 percent or greater, the school can 

submit a participation rate index challenge based on the draft cohort default rate for 

This Year, the official cohort default rate for Last Year, and/or the official cohort 

default rate for Two Years Ago. If the loss of eligibility will be due to an official cohort 

default rate for This Year that, based on the draft rate, is expected to be greater than

40.0 percent, the school can submit a participation rate index challenge based on the 

draft cohort default rate for This Year. If the school will be subject to potential 

provisional certification due to two out of three of its most recent cohort default 

rates being 30.0 percent or greater, the school can submit a participation rate index 

challenge based on a draft cohort default rate 30.0 percent or greater, or an official 

cohort default rate 30.0 or greater for Last Year or Two Years Ago (see following 

chart).

Years Used for Participation Rate Index Challenges

Nature of Sanction This Year Last Year Two Years Ago

Three consecutive years of 

cohort default rates which 

are 30.0 percent or greater.

Yes – Draft Cohort 

Default Rate

Yes – Official Cohort 

Default Rate

Yes – Official Cohort 

Default Rate

Current cohort default rate 

that is greater than 40.0 

percent.

Yes – Draft Cohort 

Default Rate

NO NO

Potential provisional 

certification due to two of 

last three years of cohort 

default rates 30.0 percent or

greater.

Yes – Draft Cohort 

Default Rate if 30.0 

percent or greater

Yes – Official Cohort 

Default Rate if 30.0 

percent or greater

Yes – Official Cohort 

Default Rate if 30.0 

percent or greater

Page 4.2 - 3
Which schools are eligible to submit a participation rate index challenge? 

Any school, regardless of its draft cohort default rate, can submit a participation rate index 

challenge. However, there is no potential benefit to submitting a participation rate index

challenge for a school whose draft rate is below 30 percent as the school would not be

potentially subject to sanction or potential provisional certification based solely on its cohort 

default rates.

What benefit will a school gain from submitting a participation rate index 

challenge?

If a school submits a successful participation rate index challenge for an anticipated loss of 

eligibility or potential provisional certification, the school is not subject to that sanction when 

its next official cohort default rate is published. If the school’s challenge was based on a prior 

official cohort default rate, the school will not be subject to a subsequent loss of eligibility or 

provisional certification based on that official cohort default rate.

Are participation rate index challenges based on a specific period oftime? 

The school may base the participation rate index challenge on any 12-month period that 

ended during the six months immediately preceding the start of the cohort fiscal yearfor

which the school is submitting the participation rate index challenge. Because a school can

choose to submit a participation rate index challenge based on its most recent draft cohort 

default rate or either of its two most recent official cohort default rates, the time period will 

differ based on the cohort fiscal year used by the school.

The federal fiscal year always begins on October 1. As a result, the six months immediately 

preceding the start of a fiscal year will always begin on April 1 and always end on September

30. Therefore, the 12-month period the school uses must end no earlier than April 1 and no 

later than September 30. In order for a 12-month period to end between April 1 and 

September 30, it must begin no earlier than April 2 and no later than October 1 of the 

preceding year.

Page 4.2 - 4
Date Ranges for Acceptable 12-Month Periods

Cohort 

Fiscal Year

Cohort FY 

Start Date

Acceptable 12-Month 

Period Begins Between

Acceptable 12-Month 

Period Ends Between

2016 10/01/2015 04/02/2014-10/01/2014 04/01/2015-09/30/2015

2017 10/01/2016 04/02/2015-10/01/2015 04/01/2016-09/30/2016

2018 10/01/2017 04/02/2016-10/01/2016 04/01/2017-09/30/2017

2019 10/01/2018 04/02/2017 - 10/1/2017 04/01/2018–09/30/2018

2020 10/01/2019 04/02/2018 -10/01/2018 04/01/2019-09/30/2019

2021 10/01/2020 04/02/2019 -10/01/2019 04/01/2020-09/30/2020

2022 10/01/2021 04/02/2020 -10/01/2020 04/01/2021-09/30/2021

2023 10/01/2022 04/02/2021 -10/01/2021 04/01/2022-09/30/2022

To choose an acceptable 12-month period, a school should first determine which cohort 

fiscal year the school will use. The school then picks a start date from the range listed in the 

“Acceptable 12-Month Period Begins Between” column. The end date will be 12 months 

after the start date, which will fall in the range listed in the “Acceptable 12-Month Period 

Ends Between” column.

Acceptable & Unacceptable 12-Month Periods for Cohort FY 2018

12-Month Period Status Reason

04/02/2018-04/01/2019 Acceptable Starts within acceptable range; 12 months

later within acceptable range

04/02/2018-04/02/2019 Unacceptable Starts within acceptable range; more than 12

months later

04/01/2018-03/31/2019 Unacceptable Starts and ends outside acceptable range

A school can select the most beneficial 12-month period available. In other words, a school 

can identify the acceptable 12-month period during which it had the lowest percentage of 

borrowers and use that period when calculating its participation rate index.

If a school selects an unacceptable 12-month period, the Department will not review any 

portion of the school’s participation rate index challenge and the participation rate index 

challenge will be denied. A school may contact the Department at 202-377-4259 to discuss 

whether the school has selected an acceptable 12-month period.

Page 4.2 - 5
See Chapter 2.1 

“How the Rates are 

Calculated” for 

information on the 

formulas used to 

calculate cohort 

default rates.

How does a school calculate its participation rate index?

After selecting the 12-month period, the school determines the total number of regular 

students enrolled at least halftime and for at least one day during any part of the 12-month 

period. It is not necessary for the student’s entire enrollment period to fall within the 12-

month period. The total number of students is the denominator. The school then determines 

the total number of those students who borrowed an FFEL or Direct Loan for a loan period 

that overlaps any part of the 12-month period. The total number of borrowers is the 

numerator.

÷

A regular student is a student who enrolled or was accepted for enrollment at a school for the 

purpose of obtaining a degree, certificate, or other recognized educational credential offered 

by that school. To be included in the participation rate index calculation, the borrower must 

be a student who was enrolled at least halftime and enrolled at least one day during the 

selected 12-month period.

Once the school has divided the total number of FFEL and Direct Loan borrowers by the total 

number of regular students, the school multiplies the result by the cohort default rate upon 

which the school is basing the participation rate index challenge. The result is the participation 

rate index. A participation rate index is calculated as follows:

If a school has fewer than 30 borrowers who entered repayment in the cohort fiscal year for 

which the participation rate index is calculated, the participation rate index for that cohort 

fiscal year may be calculated using either:

♦ the cohort default rate that would result from applying the non-average rate 

formula or

♦ the cohort default rate that would result from applying the averagerate 

formula.

To avoid a potential loss of eligibility or potential placement on provisional certification, the 

school’s participation rate index must not exceed the relevant threshold as indicated on page 

4.2-2.

For example, School A’s draft cohort default rate for the current cohort fiscal year is 30.0 percent. 

School A’s two most recent official cohort default rates were 31.0 percent and 33.0 percent. As a 

result, if School A’s official cohort default rate for this cohort fiscal year is also 30.0 percent,

Page 4.2 - 6

Total borrowers in 

12-month period

Total regular students 

in 12-month period

School’s 

cohort default 

rate

Participation 

Rate Index

Total borrowers in 

12-month period

Total regular students in 

12-month period
50.0

Cohort Default

Rate

School A will be subject to loss of eligibility because it will have three consecutive of 

official cohort default rates that are 30.0 percent or greater.

School A decides to base its participation rate index challenge on the draft 

cohort default rate for the current cohort fiscal year. School A had a total of 

200 regular students enrolled on at least a half-time basis during any part of 

the selected 12-month period relating to the current cohort fiscal year. Of 

those 200 students, 31 obtained FFELs or Direct Loans for a loan period that 

overlapped the 12-month period. School A’s participation rate index is 0.0465.

Because the participation rate index is less than 0.0625, School A’s 

participation rate index challenge would be successful.

As another example, School B’s draft cohort default rate is 50.0 percent. 

School B’s two most recent official cohort default rates were 20.0 percent and

31.0 percent. As a result, if School B’s official cohort default rate is also 50.0 

percent, School B will be subject to loss of eligibility because it will have an 

official cohort default rate that is greater than 40.0 percent.

School B should base its participation rate index challenge on the draft cohort 

default rate for the current cohort fiscal year. School B had a total of 100 

regular students enrolled on at least a half-time basis during any part of the 

12-month period relating to the current cohort fiscal year. Of these 100 

students, 10 obtained FFELs or Direct Loans for a loan period that overlapped 

the 12-month period. School B’s participation rate index is 0.05.

x =

Because the participation rate index is less than 0.0832, School B’s 

participation rate index challenge would be successful.

However, if School B’s two recent official cohort default rates are ratesof

30.0 percent and 31.0 percent, School B is also subject to loss of eligibility 

because it will have three consecutive official cohort default rates thatare

30.0 percent or greater. In that event, the participation rate index would have 

to be 0.0625 or less for the participation rate index challenge to be successful.

Page 4.2 - 7

31 borrowers

200 regular students

30.0

cohort

default rate

0.0465

10 borrowers

100 regular students

0.05
Does a school need to wait until the draft cohort default rate is released to 

prepare its participation rate index challenge?

If a school is submitting a participation rate index challenge using a previous cohort fiscal

year’s official cohort default rate, it can prepare a complete participation rate index challenge 

before it receives its current year draft cohort default rate.

If a school is submitting a participation rate index challenge using the current cohort fiscal 

year, it cannot perform the final step in the process (multiplying the participation ratio by the 

draft cohort default rate) until the school receives its draft cohort default rate. However, a 

school can perform the initial steps to identify the data to include in the calculation before it 

receives its draft cohort default rate if it believes its current cohort fiscal year official cohort 

default rate will incur sanctions. In that way, a school can save time when it receives its draft 

cohort default rate.

What roles do the Department and data managers have in a school’s

participation rate index challenge?

Schools submit participation rate index challenges directly to the Department for review and 

consideration. The Department is responsible for determining whether schools meet the 

established participation rate index criteria. Therefore, there is no role for data managers.

If a school submits a participation rate index challenge to the wrong entity or address, the 

participation rate index challenge might not be reviewed and the school could miss the 

deadline for submitting the participation rate index challenge to the Department.

If a data manager receives a participation rate index challenge from a school, it should 

immediately contact the school to inform it that the participation rate index challenge must 

be sent to the Department. The data manager should also indicate that the participation rate 

index challenge must be sent to the Department within the initial 45-calendar-day timeframe. 

The data manager should then notify the Department that the data manager has contacted 

the school.

What materials must a school submit as part of a participation rate index 

challenge?

The participation rate index challenge must include a letter on the school’s letterhead (see 

sample letter at the end of this chapter).

If a school does not have any students who received FFELs or Direct Loans with loan periods 

that overlapped any part of the selected 12-month period, the school does not have to submit 

a spreadsheet to the Department. However, to avoid sanctions, the school’s letter to the 

Department must identify the 12-month period and indicate that the school did not have any 

students who received loans with loan periods that overlapped the 12-month period.

Page 4.2 - 8
If the school is required to submit a participation rate index challenge spreadsheet, it should 

use the format shown in the sample spreadsheet below. Using the information on the 

spreadsheet and the participation rate index formula, a school must calculate its participation 

rate index. To avoid a potential loss of eligibility or potential placement on provisional

certification, the school’s participation rate index must meet the relevant threshold as indicated 

on page 4.2-2.

Sample Participation Rate Index Challenge Spreadsheet

Type: Participation Rate Index Challenge Cohort Default Rate: 50.0%

Cohort FY: 2009 12-Month Period: 9/01/2007 – 08/31/2008

From: Graphic Tech Total Borrowers: 2

Code: 099999 Total Regular Students: 50

To: Default Management PRI: 0.02

Code NA

A B C D E

1

Student's Student's Student's Loan Type Loan Period

SSN Name Enrollment (if any)

Dates

2 111-11-1111 Ross, Betsy 08/15/2007 - 05/25/2008 FFEL 08/15/2007 - 05/26/2008

3 222-22-2222 Adams, John 05/15/2007 - 05/26/2008 DL 08/15/2007 - 12/30/2008

4 333-333-3333 Washington, Martha 08/15/2007- 12/30/2007 No N/A

Date 02/14/2011 Page 1 of 1

A blank version of this spreadsheet is posted on the Default Management website.

Schools are not required to submit an independent auditor’s attestation to support the school’s 

participation rate index challenge.

If a school is submitting a participation rate index challenge for multiple cohort default rates, it 

should submit all the participation rate index challenges in the same mailing to the Department. 

However, the school still needs to submit separate documentation for each participation rate 

index challenge.

How does a school submit a participation rate index challenge?

Timing is critical when submitting a participation rate index challenge. A 

school must send its participation rate index challenge to the Department 

within 45 calendar days of the timeframe begin date. If a school does not 

meet the 45 calendar day timeframe for submitting a participation rate index 

challenge, the participation rate index challenge will not be reviewed.

Page 4.2 - 9
What happens after the school submits the participation rate index 

challenge?

The Department will review, using the standard of review described in 34 CFR 668.204(c), 

only the information submitted with the participation rate index challenge and will not 

review information submitted after the 45 calendar-day deadline. The Department will send 

the schools a letter notifying the school of the Department’s decision before the official 

cohort default rates are published. The Department’s decision is final and no further 

administrative review is provided.

If a school’s participation rate index challenge is successful, the school is not subject to loss of 

eligibility or potential provisional certification when its next official cohort default rate is

published. In addition, if a school’s participation rate index challenge is based on a prior 

official cohort default rate, the school is not subject to any subsequent loss of eligibility or 

potential provisional certification based on that official cohort default rate. However, a 

successful participation rate index challenge based on a school’s most recent draft cohort 

default rate does not excuse the school from any subsequent sanction.

What happens to a school’s participation rate index challenge after the

release of the official cohort default rates?

After the release of the official cohort default rates, the Department will recalculate the 

school’s participation rate index challenge based on the school’s official cohort default rate.If 

the school meets the requirements for a successful participation rate index appeal, the 

school will not be subject to any subsequent loss of eligibility or potential provisional 

certification based on that official cohort default rate.

Page 4.2 - 10

Do not send materials to any other address at the Department

U.S. Department of Education

Partner Eligibility and Oversight Services 

Union Center Plaza, 6th Floor (61G3)

400 Maryland Ave, S.W.

Washington, D.C. 20202

ATTN: Cohort Default Rates Group

U.S. Department of Education 

Partner Eligibility and Oversight Services 

Union Center Plaza 61G3

830 First Street, N.E. 

Washington, DC 20202

ATTN: Cohort Default Rates Group

If sending by U.S. Postal Service: If sending by courier:

How a school submits a Participation 

Rate Index challenge to the Department

The Department recommends that a school send all participation rate index challenge 

correspondence return receipt requested or via commercial overnight mail/courier delivery. This 

will be useful to a school if it is asked to authenticate the timeliness of its submission. A school 

should maintain the documentation that verifies the receipt of the participation rate index 

challenge as well as all electronic and hardcopy documentation submitted as a part of the 

participation rate index challenge process.
Sample Participation Rate Index Challenge Letter

The letter must include the school’s OPE ID number, a statement indicating that the school is 

submitting a participation rate index challenge, the relevant cohort default rate on which the 

challenge is based, and a certification that the information provided is true and correct under penalty 

of perjury. The school must also note its participation rate index and the 12-month period the school 

selected. The letter must feature a subject line that reads “Subject: Cohort FY [insert cohort fiscal year 

being used in the challenge] Participation Rate Index Challenge.” The school’s President/CEO/Owner 

must sign the letter, and the signature must be followed by a signature block showing the signer’s 

name and job title.

Page 4.2 - 11

Enclosures

Archibald Bellvoir 

President, Graphic Tech

Subject: Cohort FY XX Participation Rate Index Challenge 

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is submitting a participation rate index challenge based 

on our FY XX draft cohort default rate. According to our calculations, our participation 

rate index is 0.02. This index is calculated using a 12-month period that began on 

September 1, 2010 and ended on August 31, 2011. Please see the enclosed spreadsheet.

I, the undersigned, certify under penalty of perjury, that all information submitted in 

support of this participation rate index challenge is true and correct.

Thank you for your consideration.

Sincerely

OPEID 099999

February 14, 20XX

U.S. Department of Education 

Partner Eligibility and Oversight

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353
Page 4.2 - 12

Participation Rate Index Challenge 

Checklist

School to the Department

Determine

 Will the school be subject to sanction after the release of the officialcohort 

default rates?

 What is the school’s participation rate index?

Submit to the Department

 Spreadsheet

 Letter
1

4.3 Uncorrected Data Adjustment

Ensuring Data Correction after Official CDR Calculation
The timeframe begins 

on the sixth business 

day following the 

transmission date for 

eCDR notification 

packages that is 

posted on the 

Department’s 

website.

What is an uncorrected data adjustment?

An uncorrected data adjustment is a request submitted to the U.S. Department of Education 

(the Department) to ensure that a school’s official cohort default rate calculation reflects 

changes that were correctly agreed to as a result of an incorrect data challenge that the 

school submitted after the release of the draft cohort default rates.

A school should submit an uncorrected data adjustment when:

♦ it submitted a timely challenge of its draft cohort default rate data,

♦ the data manager reviewing the incorrect data challenge agreed to make changesto 

the cohort default rate data, and

♦ the agreed upon changes are not reflected in the school’s loan record detailreport 

(LRDR) for the official cohort default rates.

If a school does not submit an uncorrected data adjustment after the release of the official 

cohort default rates, the school will not have the opportunity to submit an uncorrected data 

adjustment at a later time.

Timing is critical when submitting an uncorrected data adjustment. A school must submit its 

uncorrected data adjustment to the Department within 30 calendar days of the timeframe begin date 

via the eCDR Appeals system. If the school does not submit the uncorrected data adjustment in a 

timely manner, the Department will not review the uncorrected data adjustment.

Which schools are eligible to submit an uncorrected data adjustment?

Any school that receives an official cohort default rate may request that the Department adjust its 

cohort default rate if it meets the uncorrected data adjustment criteria as shown in the above chart. 

This includes schools that are not subject to sanction and schools that have withdrawn from the 

William D. Ford Federal Direct Loan (Direct Loan) programs. A school can only request an adjustment 

of its most recent official cohort default rate.

Page 4.3 - 2

Uncorrected Data Adjustment 

Timeframe

Draft Cycle Not applicable

Official 

Cycle

School receives official cohort default 

rate notification package

September

School sends Department completed 

Uncorrected Data Adjustment via eCDR 

Appeals

Within 30 days of 

timeframe begin 

date

Regulatory citations: 

34 CFR 668.209

The “timeframe begin date” is the sixth business day after the official cohort 

default rates are released as officially announced on the Information for 

Financial Aid Professionals (IFAP) website
What benefit will a school gain from submitting an uncorrected data 

adjustment?

If, as a result of an uncorrected data adjustment (or as the result of a school’s submission of any 

adjustment or appeal), the Department determines that a school’s official cohort default rate data is 

incorrect, the Department will recalculate the cohort default rate using the corrected data. This may 

lower, raise, or not affect the cohort default rate. If the school is subject to sanction and the cohort 

default rate is lowered below the sanction level, the school is no longer subject to that sanction. In 

addition, a school that would otherwise be subject to sanction in a later year may avoid being subject 

to that sanction.

However, even though the Department may revise a cohort default rate, subsequent copies of the 

LRDR for the official cohort default rates will not reflect the change. Therefore, it is important for a 

school to keep a copy of the Department’s final determination letter as the official record of the 

school’s revised cohort default rate.

What roles do data managers have in a school’s uncorrected data 

adjustment?

Schools submit uncorrected data adjustments directly to the Department via the eCDR Appeals system 

for review and consideration. The data manager associated with the uncorrected data is notified via 

email.

If the Department notifies a data manager that a school’s uncorrected data adjustment was 

successful, the data manager must correct the data both in the data manager’s internal system and in 

the National Student Loan Data System (NSLDS). The data manager must ensure that the changes are 

successfully loaded into NSLDS.

How does a school submit an uncorrected data adjustment?

All schools must submit their uncorrected data adjustment via the electronic Cohort Default Rate 

Appeals (eCDR Appeals) system. The eCDR Appeals system is a web-based application that allows 

schools to submit their uncorrected data adjustment allegations electronically and allows the 

Department to respond electronically. Submitting the uncorrected data adjustment electronically 

helps to ensure that each uncorrected data adjustment allegation is properly routed to the 

Department in a timely fashion. It also allows for greater protection of personally identifiable 

information. While the hyperlink above will take users directly to the eCDR Appeals homepage, a link 

to the eCDR Appeals system is also available from the Default Management website.

How does a school register to use eCDR Appeals?

All schools must complete the registration process in order to use the eCDR Appeals system. Complete 

instructions for registering for eCDR Appeals can be found in the eCDR Appeals Registration and User

Account Guide. A direct link to this guide, as well as a link to a video demonstration of the 

registration process, can be found on the eCDR Appeals homepage.

Page 4.3 - 3
Where can a new user find guidance on submitting an Uncorrected Data 

Adjustment using eCDR Appeals?

The eCDR Appeals homepage contains a link to the eCDR Appeals Uncorrected Data Adjustment User

Guide. There are separate User Guides for each challenge, adjustment and appeal type that may be 

submitted using eCDR Appeals. Additionally, the eCDR Appeals homepage contains a link to video 

demonstrations for each challenge, adjustment and appeal type that may be submitted using eCDR 

Appeals.

How does a school prepare an uncorrected data adjustment?

If a school’s LRDR for the official cohort default rate contains uncorrected data, it should submit an 

uncorrected data adjustment to the Department via eCDR Appeals.

The eCDR Appeals system will compare the LRDR for the draft cohort default rates to the LRDR for the 

official cohort default rates and the data manager’s response to the school’s incorrect data challenge 

to determine if agreed upon changes have been made. If this comparison indicates that the LRDR for 

the official cohort default rates contains uncorrected data, the eCDR Appeals system will send an email 

notification to the school informing the school that its official LRDR contains uncorrected data from 

the incorrect data challenge, and that the school should submit an uncorrected data adjustment via 

eCDR Appeals. The school should follow the instructions in the uncorrected data adjustment user 

guide to prepare and submit its uncorrected data adjustment. The school must do so within 30 

calendar days of the timeframe begin date.

The uncorrected data adjustment must include the following items:

♦ A listing of all borrowers from the school’s incorrect data challenge with uncorrected data. 

The eCDR Appeals system will automatically populate this listing into the “Requested

Adjustments” table on the case details page after the school initiates the case.

♦ The CEO certification letter. This letter must be available in an electronic format and 

uploaded to eCDR Appeals. A sample CEO certification letter is provided at the end of this 

chapter.

Page 4.3 - 4

A school will not have another opportunity to submit an 

uncorrected data adjustment.
What happens after the school submits the uncorrected data adjustment?

The Department will review the uncorrected data adjustment to determine whether a data manager 

correctly agreed to make a change to a school’s cohort default rate data during the incorrect data

challenge process and whether the change is reflected in the LRDR for the official cohort default rates.

If the Department so determines using the standard of review described in 34 CFR 668.208(f), as

applicable, the Department will recalculate the school’s cohort default rate based on the correct data.

After the Department completes its review of the uncorrected data adjustment, the department closes 

the case in eCDR Appeals. Once a case is closed, it will remain in the Current Cases listing for the 

remainder of the cohort year for viewing and printing; however, it can no longer be modified. Email 

notifications will automatically be sent to the school and to all data managers included in the case, 

informing them that the uncorrected data adjustment has been finalized and closed. At this point the 

schools and data managers can view and print the final determination letter, view and print the 

finalized case, and access all relevant reports available from eCDR Appeals.

If the school was notified that it was subject to sanction and the uncorrected data adjustment is 

successful and the revised cohort default rate is below the sanction level, the Department will 

withdraw that sanction notice. If the school was notified that it was subject to sanction and the 

uncorrected data adjustment is unsuccessful or if the uncorrected data adjustment is successful but 

the revised cohort default rate remains above the sanction level, and the school has no other 

outstanding appeals and adjustments, the Department will notify the school of the effective date of

that sanction.

A school that submits an adjustment and/or an appeal but fails to avoid sanctions is liable for certain 

costs associated with the Direct Loans it originated and disbursed during the adjustment and appeal 

process. Liabilities are not calculated for loans that were delivered or disbursed more than 45 calendar 

days after the school submitted its completed adjustment and/or appeal to the Department. Schools 

may avoid this liability if they choose not to certify or originate loans during the adjustment and appeal 

process.

Page 4.3 - 5
Sample Letter: School to the Department

The letter must include the school’s OPE ID number and a statement indicating that the school is 

submitting an uncorrected data adjustment for the current cohort fiscal year. The letter must feature a 

subject line that reads “Subject: Cohort FY [insert cohort fiscal year used in the adjustment] Uncorrected 

Data Adjustment”. The letter must include a certification that the information provided is true and 

correct under penalty of perjury. The school’s President/CEO/Owner must sign the letter, and a

signature block showing the signer’s name and job title must follow the signature.

Page 4.3 - 6

Enclosures

CC: Federal Servicer

Serena Rooney

President, Coralville College

I, the undersigned, certify under penalty of perjury, that all information submitted in

support of this uncorrected data adjustment is true and correct. 

Thank you for your consideration

Sincerely,

Subject: Cohort FY XX Uncorrected Data Adjustment

To Whom It May Concern:

Coralville College, OPE ID 098998, is submitting a cohort FY XX uncorrected data 

adjustment. Please see the information included in the uncorrected data 

adjustment case submitted via eCDR Appeals.

OPE ID 098998

October 15, 2018

U.S. Department of Education 

Operations Performance Division 

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353
Page 4.3 - 7

Uncorrected Data Adjustment 

Checklist

School to the Department

Determine

 Does the loan record detail report for the official cohort default rates contain 

incorrect data that a data manager agreed to correct?

Submit to the Department

 Relevant information for each borrower included in UDA case

 CEO Certification Letter
1

4.4 New Data Adjustment

Incorrect New Data After Official CDR Calculation
What is a new data adjustment?

A new data adjustment allows a school to challenge the accuracy of

“new data” included in the school’s most recent official cohort default rate.

New Data Adjustment

Timeframe

Draft Cycle Not applicable

Official 

Cycle

School receives official cohort default 

rate notification package

September

School sends New Data Adjustment 

allegations to Data Manager via eCDR 

Appeals

Within 15 days of 

timeframe begin 

date

Data Manager sends New Data 

Adjustment response to school via 

eCDR Appeals

Within 20 days of 

receipt of 

school’s New 

Data Adjustment 

allegations

If necessary, school requests 

clarification via eCDR Appeals

Within 15 days of 

receipt of Data 

Manager 

response

Data Manager sends requested 

information to school via eCDR Appeals

Within 20 days of 

receipt of 

school’s 

clarification 

request

School sends completed New Data 

Adjustment via eCDR Appeals

Within 30 days of 

receipt of final 

Data Manager 

response

What is new data?

New data occurs when loan data reported to the National Student Loan Data System (NSLDS) 

changes during the period between the calculation of the draft and official cohort default 

rates. NSLDS is continuously provided with new or updated information. Because the draft 

cohort default rates are calculated approximately six months before the official cohort default 

rates are calculated, the data used to calculate the draft cohort default rates may be different 

from the data used to calculate the official cohort default rates.

New data can be identified by comparing the loan record detail reports (LRDRs) for the draft 

and official cohort default rates for the same cohort fiscal year and determining if any loan 

data is newly included, excluded, or changed in any manner. The school should then 

determine if the new data results in the loan data being reported incorrectly.

Page 4.4 - 2

Regulatory citations: 

34 CFR 668.210

The timeframe begins 

on the sixth business 

day following the 

transmission date for 

eCDR notification 

packages that is posted 

on the Department’s 

website.
The following are examples of new data:

♦ a loan on the LRDR for the official cohort default rates is newly 

included, excluded, or changed in some manner when compared to 

the LRDR for the draft cohort default rates, and

♦ the school believes the loan is being incorrectly used in the official 

cohort default rate calculation.

If the loan data is reported in the same manner in the LRDR for the draft and 

official cohort default rates, the school may not submit a new data 

adjustment.

If a school does not submit a new data adjustment after the release of the 

official cohort default rates, the school will not have the opportunity to 

submit a new data adjustment at a later time.

What benefit will a school gain from submitting a new data 

adjustment?

If, as a result of a new data adjustment (or as the result of a school’s 

submission of any adjustment or appeal), the Department determines that a 

school’s official cohort default rate data is incorrect, the Department will 

recalculate the cohort default rate using the corrected data. This may lower, 

raise, or not affect the cohort default rate. If the school is subject to sanction 

and the cohort default rate is lowered below the sanction level, the school is 

no longer subject to that sanction.

What roles do the Department and data managers have in a 

school’s new data adjustment?

A data manager is required to review a school’s new data adjustment 

allegations if the new data adjustment allegations are submitted in a 

appropriate manner and the data manager has responsibility for the loans. 

The guarantor/servicer code on the LRDR identifies the data manager for a 

loan. See Chapter 2.3, “Reviewing the Loan Record Detail Report,” for 

information on determining the data manager for a loan. The data manager 

must respond to the school’s new data adjustment allegations within 20 

calendar days of receipt.

Page 4.4 - 3
The Department has two roles in the new data adjustment process. The primary role is to 

review a school’s new data adjustment, which is submitted to the Department once the 

school has received confirmation from the data manager that a change to the data is 

warranted. If the data manager indicates that a change is not warranted, the school cannot 

submit those new data adjustment allegations to the Department as a part of a new data 

adjustment. If the Department determines that the data manager correctly agreed that 

changes are warranted to the new data identified by the school, the Department will 

recalculate the school’s cohort default rate based on the correct data and notify the school.

The Department’s other role is to respond to a school’s new data adjustment allegations if 

the Department is the data manager for the loans. The Department is the data manager for 

FFELs the Department holds and for all Direct Loans.

The Department as data manager responds directly to a school’s new data adjustment 

allegations for certain FFELs that the Department holds.

The Department as data manager responds through its Federal servicers to a school’s new 

data adjustment allegations regarding all Direct Loans and for certain FFEL loans that the 

Department holds.

How does a school submit new data adjustment allegations to a data 

manager?

All schools must submit their new data adjustment via the eCDR Appeals system. The eCDR 

Appeals system is a web-based application that allows schools to submit their new data 

adjustment allegations electronically, allows the data manager to respond electronically, and 

allows the Department to review the data manager response electronically. Submitting the 

new data adjustment electronically helps to ensure that the new data adjustment is properly 

routed to the Department. It also allows for greater protection of personally identifiable 

information. While the hyperlink above will take users directly to the eCDR Appeals 

homepage, a link to the eCDR Appeals system is also available from the Default Management

Web site.

How does a data manager respond to a school’s new data adjustment 

allegations?

Data managers will receive email notification from eCDR Appeals when a new data 

adjustment has been submitted that includes borrower loans that the data manager 

currently holds. Data managers must respond to a school’s properly submitted new data 

adjustment via the eCDR Appeals system. Timing is critical when responding to a school’s 

new data adjustment. A data manager is required to respond to a school’s properly 

submitted new data adjustment for those loans which the data manager holds within 20 

calendar days of receipt.

A data manager must review each new data adjustment allegation submitted by the school 

to determine the following:

Page 4.4 - 4
♦ The data manager should determine if the new data adjustment 

allegations presented by the school are based on loans that the data 

manager currently holds. If the data manager does not hold the 

loans for some or all of the allegations, the data manager should 

forward the allegation to the data manager that currently holds the 

loans in question.

♦ The data manager should determine if all necessary supporting 

documentation is present. If a school fails to provide the data 

manager with all necessary supporting documentation, the data 

manager may ask the school to submit the missing information. 

However, the school must submit this additional supporting 

documentation to the data manager within the initial 15-calendarday deadline for submitting new data adjustments. If the school does 

not submit the additional supporting documentation within the 

deadline, the data manager will not consider the additional 

supporting documentation in its review of the new data adjustment 

allegation.

♦ The data manager should determine if its documentation supports or 

refutes each of the new data adjustment allegations submitted by 

the school.

♦ The data manager should agree with the school if the data manager’s 

documentation supports the school’s claim or if the school has 

demonstrated that the data manager has failed to take into account 

correct information the school sent to the data manager or the 

National Student Loan Data System (NSLDS).

♦ The data manager should disagree with the school if the data 

manager’s documentation refutes the school’s claim or if the school 

failed to demonstrate that the correct information was submitted to 

the data manager or NSLDS. The data manager must explain to the 

school in the “Comments” field why it disagrees with the school and 

include a copy of the data manager’s supporting documentation.

After making its determinations, the data manager must enter a response to 

each new data adjustment allegation submitted by the school. The responses 

will be entered on the Data Manager Adjustment Details screen in eCDR 

Appeals. If the data manager agrees that a change should be made, it must 

correct the data in its internal data system and in NSLDS. The data manager 

must ensure that the changes it agreed to make were successfully loaded into 

NSLDS. The data manager should check the NSLDS error report.

Page 4.4 - 5
The data manager’s response must include the following:

♦ An indication that the data manager agrees or disagrees with the 

school’s allegation. If the data manager disagrees, they must 

indicate the correct last date of attendance, date entered repayment 

and default date (if applicable), as well as a comment indicating why 

the data manager disagrees with the school’s allegation.

♦ Copies of supporting documentation for each new data adjustment 

allegation with which the data manager disagreed.

What does a school do with the data manager’s new data adjustment 

allegations response?

Once the data manager has submitted its response to the school’s new data adjustment 

allegations, the school will receive an email notification from eCDR Appeals. The school 

should review the data manager response for each of the allegations included in the new data 

adjustment. In those cases where the data manager’s response is unclear, incorrect, missing 

or incomplete, the school may submit a request to the data manager for clarification. A 

school must submit the request via eCDR Appeals within 15 calendar days of the receipt of 

the new data adjustment allegations response. The data manager should respond to the 

school’s inquiry within 20 calendar days of receipt. If the school does not require clarification 

for any of the new data adjustment allegation responses, the school may end the clarification 

period by selecting the “No Clarification Needed” button, as described in Chapter 14.1 of the 

eCDR Appeals New Data Adjustment User Guide.

Within 30 calendar days of receiving the final response to all of the school’s new data 

adjustment allegations, the school must decide how to proceed with its new data adjustment. 

If the data manager response indicates there is no new incorrect new data in the school’s 

official cohort default rate calculation, the school can proceed no further with the new data 

adjustment and should notify the Department that the school is withdrawing the new data 

adjustment, as described in Chapter 14.4 of the eCDR Appeals NDA User Guide. A school 

cannot appeal a data manager’s new data adjustment allegations response to the 

Department, unless submitted as part of an erroneous data appeal, as explained in Chapter 

4.5.

If the data manager agrees with any of the school’s new data adjustment allegations, the 

school should submit the new data adjustment to the Department. Only the Department can 

make the recommended changes to the school’s cohort default rate.

Page 4.4 - 6
What happens after the school submits the new data 

adjustment?

The Department will review the new data using the standard of review 

described in 34 CFR 668.209(f). If the Department determines that a school’s 

cohort default rate calculation data is incorrect, the Department will 

recalculate the school’s cohort default rate based on the correct data.

After the Department completes its review of the new data adjustment, the 

Department closes the case in eCDR Appeals. Once a case is closed, it will 

remain in the Current Cases listing for the remainder of the cohort year for 

viewing and printing; however, it can no longer be modified. Email 

notifications will automatically be sent to the school and to all data managers 

included in the case, informing them that the new data adjustment has been 

finalized and closed. At this point the schools and data managers can view 

and print the final determination letter, view and print the finalized case, and 

access all relevant reports available from eCDR Appeals.

If the school was notified that it was subject to sanction and the new data 

adjustment is successful and the revised cohort default rate is below the 

sanction level, the Department will withdraw that sanction notice. If the 

school was notified that it was subject to sanction and the new data 

adjustment is unsuccessful or if the new data adjustment is successful but the 

revised cohort default rate remains above the sanction level, and the school 

has no other outstanding appeals and adjustments, the Department will 

notify the school of the effective date of that sanction.

A school that submits an adjustment and/or an appeal but fails to avoid 

sanctions is liable for certain costs associated with the Direct Loans it 

originated and disbursed during the adjustment and appeal process. Liabilities 

are not calculated for loans that were delivered or disbursed more than 45 

calendar days after the school submitted its completed adjustment and/or 

appeal to the Department. Schools may avoid this liability if they choose not 

to certify or originate loans during the adjustment and appeal process.

Page 4.4 - 7
Sample CEO Certification Letter

The letter must include the school’s OPE ID number and a statement indicating that the school is submitting a 

new data adjustment for the current cohort fiscal year. The letter must feature a subject line that reads 

“Subject: Cohort FY [insert cohort fiscal year used in the adjustment] New Data Adjustment”. The letter must 

include a certification that the information provided is true and correct under penalty of perjury. The school’s 

President/CEO/Owner must sign the letter, and a signature block showing the signer’s name and job title must 

follow the signature.

Page 4.4 - 8

Coralville College

5029 Greta Avenue 

Coral City, Iowa 12345-5029

1-987-654-3211

October 14, 2015

U.S. Department of Education 

Business Operations

Union Center Plaza 114B4 

400 Maryland Avenue, SW 

Washington, DC 20202-5353

OPE ID 098998

Subject: Cohort FY 2012 New Data Adjustment

To Whom It May Concern:

Coralville College, OPE ID 098998, is submitting a cohort FY 2012 new data 

adjustment. Please see the information included in the new data adjustment 

case submitted via the eCDR Appeals system.

I, the undersigned, certify under penalty of perjury, that all information submitted 

in support of this uncorrected data adjustment is true and correct.

Thank you for your consideration.

Sincerely,

Serena Rooney

President, Coralville College
New Data Adjustment 

Checklists

School to Data Manager via eCDR Appeals

Determine

 Does the loan record detail report for the official cohort default rate contain new 

data?

Submit to Data Manager via eCDR Appeals

 Relevant Information for each borrower challenged

 Supporting Documentation each borrower challenged

 CEO Certification Letter

Data Manager to School via eCDR Appeals Determine

 Was the school submission by deadline?

 Does the data manager hold the loans?

 Is all the material present?

 Does the data manager agree or disagree with the school?

Response to School via eCDR Appeals

 Relevant Information for each borrower challenged

 Supporting Documentation for all Disagrees

Follow‐Up

 Update NSLDS and internal records

Page 4.4 - 9
1

4.5 Erroneous Data Appeal

Appealing Sanctions due to Inaccurate Cohort Default Rates
What is an erroneous data appeal?

An erroneous data appeal alleges that because of “new data” and/or

“disputed data” included in the official cohort default rate calculation, a school’s official 

cohort default rate is inaccurate.

Erroneous Data Appeal

Timeframe

Draft 

Cycle

Not applicable

Official 

Cycle

School receives notice of loss of 

eligibility or notice of provisional 

certification

School sends Erroneous Data Appeal 

allegations to Data Manager

Within 15 days 

of timeframe 

begin date

Data Manager sends Erroneous Data 

Appeal response to school

Within 20 days 

of receipt of the 

school’s 

Erroneous data 

Appeal 

allegations

If necessary, school requests 

clarification.

Within 15 days 

of receipt of 

data manager 

response

Data manager sends requested 

information to school

Within 20 days 

of receipt of the 

school’s request 

for clarification

School sends completed Erroneous 

Data Appeal to the U.S. Department 

of Education (the Department)

Within 30 days 

of receipt of 

final data 

manager 

response, or, if 

applicable and 

later, as 

provided in 34 

CFR 

668.211(b)(6)(ii)

Page 4.5 - 2

Regulatory 

citations:

34 CFR 668.211

The timeframe 

begins on the sixth 

business day 

following the 

transmission date for 

eCDR notification 

packages that is 

posted on the 

Department’s 

website.

The timeframe 

begins the 6th

business day after 

the rates are 

released, for 

example:

If the rates are 

released on 

9/21/2015 the 

timeframe begins 

on 9/29/15
What is new data?

New data occurs when loan data reported to the National Student Loan Data System 

(NSLDS) changes during the period between the calculation of the draft and official 

cohort default rates. NSLDS is continuously provided with new or updated information. 

Because the draft cohort default rates are calculated approximately six months before 

the official cohort default rates are calculated, the data used to calculate the draft cohort 

default rates may be different from the data used to calculate the official cohort default 

rates.

New data can be identified by comparing the loan record detail reports (LRDR) for the 

draft and official cohort default rates for the same cohort fiscal year and determining if 

any loan data is newly included, excluded, or changed in any manner. The school should 

then determine if the new data results in the loan data being reported incorrectly.

The following are examples of new data:

♦ a loan on the LRDR for the official cohort default rates is newly 

included, excluded, or changed in some manner when compared to 

the LRDR for the draft cohort default rates, and

♦ the school believes the loan is being incorrectly used in the official 

cohort default rate calculation.

What if the new data is correct?

If the new data in the LRDR for the official cohort default rates is correct, a school cannot 

submit an erroneous data appeal based on the correct new data. A school can only submit 

an erroneous data appeal when the school believes that the new data is incorrect even if 

the data manager disagrees with the school. Therefore, for the purposes of this chapter, 

any mentions of “new data” refer to “new incorrect data.”

What is disputed data?

Disputed data occurs when:

♦ a school submitted an incorrect data challenge allegation,

♦ the data manager for the loan disagreed with the incorrect data 

challenge allegation,

♦ the school believed the data manager was incorrect, and

♦ the same alleged error exists in the school’s official cohort defaultrate 

data.

Page 4.5 - 3
Which schools are eligible to submit an erroneous data appeal?

In order to submit an erroneous data appeal, a school must meet all 

of the following criteria:

♦ The school’s official cohort default rate calculation must include new 

and/or disputed data.

♦ The school must be subject to official cohort default rate sanctions or 

provisional certification based solely on the school’s cohort defaultrate.

♦ The school’s successful erroneous data appeal, either by itself or in 

combination with an uncorrected data adjustment or a loan servicing 

appeal, will result in a recalculated cohort default rate below the 

sanction threshold.

A school may submit an erroneous data appeal for any of the official cohort default rates 

upon which its sanction is based as long as the school has not previously appealed that 

official cohort default rate on the basis of erroneous data and has not previously been 

subject to sanction based on that official cohort default rate.

If a school is not subject to sanction, the school might be eligible to submit an uncorrected 

data adjustment (see Chapter 4.3) or a new data adjustment (see Chapter 4.4).

In certain circumstances, a school that is subject to provisional certification based solely on 

its cohort default rate is eligible to submit an erroneous data appeal. See the section of this 

chapter entitled “How does provisional certification affect a school’s ability to submit an 

erroneous data appeal?” for additional information.

What benefit will a school gain from submitting an erroneous data 

appeal?

If, as a result of an erroneous data appeal (or as the result of a school’s submission of any 

adjustment or appeal), the Department determines that a school’s official cohort default rate 

calculation data is incorrect, the Department will recalculate the cohort default rate using the 

corrected data. This may lower, raise, or not affect the cohort default rate. If the school is 

subject to sanction and the cohort default rate is lowered below the sanction level, the 

school is no longer subject to that sanction. In addition, a school that would otherwise be 

subject to sanction in a later year may avoid being subject to thatsanction.

However, even though the Department may revise a cohort default rate, subsequent copies 

of the LRDR for the official cohort default rates will not reflect the change. Therefore, it is 

important for a school to keep a copy of the Department’s final determination letter as the 

official record of the school’s revised cohort default rate.

Page 4.5 - 4

If a school’s cohort default rate is lowered below the 

sanction level, the school is no longer subject to that 

sanction.
What roles do the Department and data managers have in a school’s 

erroneous data appeal?

A data manager is required to review a school’s erroneous data appeal allegations if the 

erroneous data appeal allegations are submitted in a proper manner and the data manager 

has responsibility for the loans. If a school submits erroneous data appeal allegations to the 

wrong entity, the erroneous data appeal allegations will not be reviewed and the school could 

miss the deadline. The guarantor/servicer code on the LRDR identifies the data manager for a 

loan. See Chapter 2.3, “Reviewing the Loan Record Detail Report,” for information on 

determining the data manager for a loan.

The data manager must respond to the school’s erroneous data appeal allegations within 20 

calendar days of receipt. However, the data manager must not review erroneous data appeal 

allegations if the school did not send the erroneous data appeal allegations within the 15-

calendar-day timeframe. If the data manager does not respond within 20 calendar days, the 

school should advise the Department in writing of the delay.

The Department has two roles in the erroneous data appeal process. The primary role is to 

review a school’s erroneous data appeal, which is submitted to the Department once the 

school has received data manager responses for all of the school’s erroneous data appeal 

allegations.

The Department’s other role is to respond to a school’s erroneous data appeal allegations if 

the Department is the data manager for the loans. The Department is the data manager for 

Federal Family Education Loans (FFELs) the Department holds and for all William D. Ford 

Federal Direct Loans (Direct Loans).

The Department as data manager responds directly to a school’s erroneous data appeal 

allegations for certain FFELs that the Department holds.

The Department as data manager responds through its Federal servicers to a school’s 

erroneous data appeal allegations regarding all Direct Loans and for certain FFEL loans that 

the Department holds.

How does a school submit erroneous data appeal allegations to a data 

manager?

Timing is critical when submitting an erroneous data appeal. A school begins the process by 

sending its erroneous data appeal allegations to the data manager responsible for a loan 

within 15 calendar days of the timeframe begin date. Chapter 3.1, “Reviewing Rates and 

Loan Data,” outlines a method a school can follow to determine if the LRDR contains 

inaccurate data.

Page 4.5 - 5
Sample Erroneous Data Appeal Spreadsheet – School to Data Manager

Type: Erroneous Data Appeal

Cohort FY: 2010

Number of Borrowers: 2 

Number of Loans: 2

From: Graphic Tech

Code: 099999

To: State Guaranty Agency

Code: 111

Date 10/12/2012

A blank version of this spreadsheet is posted on the Default Management Web site

Page 1 of 1

Upon receiving the LRDR for the official cohort default rates, a school should compare the 

LRDRs for the draft and official cohort default rates to determine if any loan data has changed 

between the loan record detail reports and, if so, whether the changes result in the loan being 

reported incorrectly. The school should also determine if the LRDR contains any disputed 

data. If either situation exists, the school should submit erroneous data appeal allegations to 

the data manager for the loan.

A school must list separate erroneous data appeal allegations for each loan record that the 

school believes contains new and/or disputed data. If one data manager is responsible for all 

the loans, the school must list all the erroneous data appeal allegations in one submission.

However, if there are multiple data managers involved, the school must submit separate 

erroneous data appeal allegations to each data manager. For example, a school believes the 

LRDR contains three loans with new and/or disputed data. Two of the loans are held by one 

data manager; the other loan is held by a different data manager. The school must prepare 

two separate erroneous data appeal allegations packages, one for each data manager, listing 

only the loans held by each data manager.

The materials must include the following items:

♦ An erroneous data appeal allegations spreadsheet that lists the erroneousdata. 

(See sample spreadsheet)

♦ Copies of the appropriate pages from the relevant LRDR to demonstrate that 

the loans are new data or disputed data (see Chapter 3.1, "Reviewing Rates and 

Loan Data," for examples of the LRDR pages a school should submit).

♦ Copies of relevant supporting documentation (see Chapter 3.1, "Reviewing 

Rates and Loan Data," for examples of other supporting documentation).

♦ A letter on the school’s letterhead (see sample letter at end of chapter).

A B C D E F G H I J K L

1

Borrower's 

SSN

Borrower's 

Name

Type 

of 

Loans

Number 

of 

Loans

Basis of 

Alleged 

Error

Earlier 

of LDA 

or LTH

Date 

Entered 

Repayment

CPD, 

DD, 

ICRD,

or N/A

Cohort 

FY(s)

Effect on 

Calculation

Comments Agree/ 

Disagree

2

111-11-

1111

Connell,

Anissa SF 1 New 02/11/2010 08/12/2010 N/A FY 2010 +D N/A N/A

3

222-22-

2222

Mackey, 

Caleb SF 1 Disputed 11/18/2009 01/16/2010 N/A FY 2010 -N

Borrower 

passed away 

prior to 

scheduled 

date entered

repayment N/A

Page 4.5 - 6
If a school is submitting erroneous data appeal allegations for multiple official 

cohort default rates, the school should submit all the erroneous data appeal 

allegations in the same mailing to the data manager and to the Department.

The school must send a copy of the letter and the erroneous data appeal 

allegations spreadsheet to the Department at the same time it sends the 

complete erroneous data appeal allegations package to the data manager. 

The school does not need to send the pages of the LRDRs or the relevant 

supporting documentation to the Department at that time unless the school 

is making allegations about a FFEL that the Department holds.

How does a school identify the data manager of a loan?

The guarantor/servicer code on the LRDR shows the data manager 

responsible for a loan. A school can use this number to obtain the name and 

address of the data manager. See the “Numerical Data Manager Contacts” on 

the Default Management Web site for a listing of data manager codes and 

addresses.

How does a data manager respond to a school’s erroneous 

data appeal allegations?

Timing is critical when responding to a school’s erroneous data appeal. The 

data manager should first determine if the school is eligible to submit an 

erroneous data appeal. See the section of this chapter entitled “Which 

schools are eligible to submit an erroneous data appeal?” for information on 

determining if a school is eligible.

A data manager is required to respond to a school’s timely submitted 

erroneous data appeal allegations for those loans for which the entity is the 

data manager and send a copy of the response to the Department. However, 

the data manager must not review erroneous data appeal allegations if the 

15-calendar-day timeframe for a school to submit erroneous data appeal 

allegations has expired. If the school’s due date falls on a weekend or a 

federal holiday, a school may send its erroneous data appeal allegations to 

the data manager no later than the next federal business day.

Page 4.5 - 7

The Department recommends that a school send all erroneous data appeal allegations correspondence return 

receipt requested or via commercial overnight mail/courier delivery. This will be useful to a school if it is asked 

to authenticate the timeliness of its submission. A school should maintain the documentation which verifies the 

receipt of the materials as well as all electronic and hardcopy documentation submitted as a part of the 

erroneous data appeal process. If a school does not meet the 15-calendar-day timeframe for submitting 

erroneous data appeal allegations, the erroneous data appeal allegations will not be reviewed.
Before denying a school’s erroneous data appeal allegations on the basis of a late 

submission, a data manager should verify the timeframe begin date for the school from the 

Department. If the school did not submit the erroneous data appeal allegations in a timely 

manner, the data manager must not review any part of the submission. In its response to 

the school, the data manager should explain that it is unable to review the erroneous data 

appeal allegations because the school missed the regulatory deadline. The data manager 

must also send a copy of the response to the Department.

The data manager must respond to timely submitted erroneous data appeal allegations 

within 20 calendar days of receiving the submission. In its erroneous data appeal allegations 

response, the data manager will address each of the school’s timely submitted erroneous 

data appeal allegations. If the data manager does not respond within 20 calendar days, the 

school should advise the Department in writing of the delay.

If the school is eligible to submit an erroneous data appeal and the erroneous data appeal 

submission is timely, a data manager must review each erroneous data appeal allegation 

submitted by the school. The data manager should determine the following:

♦ The data manager should determine if the erroneous data appeal allegations 

presented by the school are based on loans that the data manager currentlyholds.

If the data manager does not hold the loans, the data manager should notify the 

school and the Department that the erroneous data appeal allegations must be 

submitted to the appropriate data manager and remind the school that the 

erroneous data appeal allegations must be submitted to the appropriate data 

manager within 15 calendar days of the timeframe begin date.

There will be some instances where the data manager was the former holder of 

the loans but those loans have been assigned to another data manager and the 

LRDR for the official cohort default rates does not yet reflect the assignment. In 

that event, the data manager should send the school and the Department a notice 

stating that the loans have been assigned to another data manager. The school 

then has until 15 calendar days after receipt of the letter from the data manager 

to submit the erroneous data appeal allegations to the appropriate data manager.

♦ The data manager should determine if all relevant material is present.

See the section of this chapter entitled “How does a school submit erroneous 

data appeal allegations to a data manager?” for information on the materials a 

school is required to submit with its erroneous data appeal. If a school fails to 

provide the data manager with all of the necessary information, the data 

manager must ask the school to submit the missing information. However, the 

school must submit this additional information to the data manager within the 

initial 15-calendar-day deadline for submitting erroneous data appeal allegations. 

If the school does not submit the additional information within the deadline, the 

data manager must not review the erroneous data appeal allegation.

Page 4.5 - 8
♦ The data manager should determine if its documentation supports or 

refutes each of the erroneous data appeal allegations listed on the 

school’s spreadsheet.

The data manager should agree with the school if the data manager’s 

documentation supports the school’s claim or if the school has 

demonstrated that the data manager has failed to take into account 

correct information the school sent to the data manager or NSLDS.

The data manager should disagree with the school if the data manager’s 

documentation refutes the school’s claim or if the school failed to 

demonstrate that the correct information was submitted to the data 

manager or NSLDS. The data manager must explain to the school why it 

disagrees with the school and send the school a copy of the data 

manager’s supporting documentation. The data manager must send a 

copy of the response and the supporting documentation to the 

Department.

After making its determinations, the data manager must compile a list of the 

data manager’s responses to the school’s list of erroneous data appeal 

allegations. The data manager must record the responses to each of the 

erroneous data appeal allegations on an erroneous data appeal allegations 

response spreadsheet and provide comments on why the data manager 

agrees or disagrees with each of the school’s erroneous data appeal 

allegations. If the data manager agrees that a change should be made, it must 

correct the data in its internal data system and in NSLDS. The data manager 

must ensure that the changes they agreed to make were successfully loaded 

into NSLDS. The data manager should check the NSLDS error report.

The data manager must provide supporting documentation if the data 

manager disagrees with the school’s erroneous data appeal allegations. In 

addition, if the data manager’s response indicates that a loan has been 

repurchased, the data manager should provide the original claim paid date, 

the repurchase date, the reason the loan was repurchased, and the default 

date if any subsequent claim was filed.

The data manager’s erroneous data appeal allegations response should 

include the following:

♦ A spreadsheet of the data manager’s responses to the school’s list of 

allegations (see sample spreadsheet below).

♦ Copies of supporting documentation for each allegation with which the 

data manager disagreed.

♦ A letter on the data manager’s letterhead with the school’s name and 

OPE ID number (see sample letter at the end of the chapter).

Page 4.5 - 9
Sample Data Manager Erroneous Data Appeal Spreadsheet

Type: Erroneous Data Appeal Number of Borrowers: 2

Cohort FY: 2010 Number of Loans: 2

From: State Guaranty Agency 

Code: 111

To: Graphic Tech

Code: 099999

Date 10/30/2012 Page 1 of 1

A blank version of this spreadsheet is posted on the Default Management Web site.

A B C D E F G H I J K L

1

Borrower's 

SSN

Borrower's 

Name

Type 

of 

Loans

Number 

of 

Loans

Basis of 

Alleged 

Error

Earlier 

of LDA 

or LTH

Date 

Entered 

Repayment

CPD, 

DD, 

ICRD,

or N/A

Cohort 

FY(s)

Effect on 

Calculation

Comments Agree/ 

Disagree

2

111-11-1111 Connell, Anissa SF 1 New 12/07/2005 06/08/2006 N/A FY 

2010

No Change The most recent 

enrollment notification 

from the school shows 

the last date of 

attendance is 

12/07/2005. There is 

no documentation of

02/11/2010 as last date 

of attendance. Disagree

3

222-22-2222 Mackey, Caleb SF 1 Disputed 11/18/2009 01/16/2010 N/A FY 

2010

-N School timely 

submitted a letter and a 

copy of death 

certificate. Agree

4

The data manager must send its erroneous data appeal allegations response within 20 

calendar days of receiving the erroneous data appeal allegations from the school. The data 

manager sends its erroneous data appeal allegations response to the school and a copy of 

the erroneous data allegations response to the Department. If the school submitted 

allegations for multiple cohort fiscal years, the data manager should prepare separate 

responses for each cohort fiscal year. However, the data manager should send the separate 

responses in the same mailing.

Page 4.5 - 10
If a data manager is unable to respond within 20 calendar days of receiving 

the school’s erroneous data appeal allegations, it should send the school a 

letter on its official letterhead explaining the circumstances causing the delay, 

telling the school when it will respond, and indicating that the Department 

has been informed of the delay.

If a data manager can respond to only a portion of a school’s erroneous data 

appeal allegations within 20 calendar days, it should hold that portion of the 

response until it can provide a response to all of the school’s erroneous data 

appeal allegations. The data manager should send a letter to the school and 

the Department that provides the information outlined above.

Page 4.5 - 11

How a data manager submits a copy of the

Erroneous Data Appeal allegations response to the Department

The Department recommends that a data manager send all correspondence return receipt 

requested or via commercial overnight mail/courier delivery. This will be useful to a data 

manager if it is asked to authenticate the timeliness of its response. A data manager should 

maintain the documentation that verifies the receipt of the erroneous data appeal allegations 

response as well as all other electronic and hardcopy documentation submitted as a part of the 

erroneous data appeal process.

The data manager can use this information when submitting monthly status reports to the 

Department. For additional information on monthly status reports, see Chapter 3.3, “Data 

Manager Strategies and Reports.”

If sending by courier: If sending by U.S. Postal Service:

U.S. Department of Education 

Partner Eligibility and Oversight Services 

Union Center Plaza 61G3

830 1st Street, NE 

Washington, DC 20202

Attn: Cohort Default Rate Group

U.S. Department of Education

Partner Eligibility and Oversight Services 

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353

Attn: Cohort Default Rate Group

Do not send materials to any other address at the Department.
What does a school do with the data manager’s erroneous data appeal 

allegations response?

Timing is critical after receiving a data manager’s erroneous data appeal response. In those 

cases where the data manager’s erroneous data appeal allegations response is unclear, 

incorrect, missing, or incomplete, the school may submit a request to the data manager for a 

clarification. The school must submit the request to the data manager within 15 calendar 

days of the receipt of the erroneous data appeal allegations response. The school should also 

send a copy of the inquiry letter to the Department. The data manager must respond to the 

school’s inquiry within 20 calendar days of receiving the inquiry and send a copy of the 

response to the Department.

Within 30 calendar days of receiving the last response to all of the school’s erroneous data 

appeal allegations, the school must decide how to proceed and prepare a response to the 

Department accordingly. The school should do one of three things:

♦ If the data manager’s erroneous data appeal allegations response indicates that 

there is erroneous data in the school’s official cohort default rate calculation, the 

school should submit an erroneous data appeal to the Department. Only the 

Department can make the recommended changes to the school’s cohort default 

rate.

♦ If the data manager’s erroneous data appeal allegations response indicates that 

there is no erroneous data in the school’s official cohort default rate calculation and 

the school agrees with the data manager’s erroneous data appeal allegations 

response, the school should notify the Department that the school is withdrawing 

the erroneous data appeal.

♦ If the data manager’s erroneous data appeal allegations response indicates that 

there is no erroneous data in the school’s official cohort default rate calculation and 

the school disagrees with the data manager’s erroneous data appeal allegations 

response, the school should submit an erroneous data appeal to theDepartment.

No matter what course of action the school chooses to follow, it must send its erroneous 

data appeal or withdrawal letter to the Department within 30 calendar days of receiving the 

last response to the school’s erroneous data appeal allegations with the following exception: 

If the school is submitting the erroneous data appeal to the Department along with a timely 

loan servicing appeal, the school may submit all materials within 30 calendar days of the later

of:

♦ receipt of the last response to all of the school’s erroneous data appeal allegations, or

♦ receipt of the last response to all of the school’s requests for loan servicing records.

If the school does not submit the erroneous data appeal in a timely manner, the Department 

will not review the erroneous data appeal. If a school is submitting an erroneous data appeal 

for multiple official cohort default rates, it should submit all the erroneous data appeals in 

the same mailing to the Department.

Page 4.5 - 12
The school must submit to the Department the following:

♦ A spreadsheet that lists the erroneous data appeal allegations(see 

sample spreadsheet).

♦ Copies of relevant supporting documentation (see Chapter 3.1, 

"Reviewing Rates and Loan Data," for examples of other supporting 

documentation).

♦ Copies of the data manager incorrect data challenge responsesfor 

disputed data.

♦ Copies of the data manager erroneous data appeal allegations 

responses.

♦ A letter on the school’s letterhead (see sample letter at the end ofthis 

chapter).

Sample School Erroneous Data Appeal Spreadsheet to the Department

Type: Erroneous Data Appeal Number of Borrowers: 2

Cohort FY: 2010 Number of Loans: 2

From: Graphic Tech 

Code: 099999

To: State Guaranty Agency 

Code: N/A

Date 11/13/2012

A blank version of this spreadsheet is posted on the Default Management Web site.

Page 1 of 1

Page 4.5 - 13

A B C D E F G H J K L M

1

Borrower's 

SSN

Borrower's 

Name

Type 

of 

Loans

Number 

of 

Loans

Basis of 

Alleged 

Error

Earlier 

of LDA 

or LTH

Date 

Entered 

Repayment

CPD, 

DD, 

ICRD,

or N/A

Cohort

FY(s)

Effect on 

Calculation

Comments Agree/ 

Disagree

Data

Manager 

Code

2

111-11-

1111

Connell, 

Anissa SF 1 New 02/11/2010 08/12/2010 N/A

FY 

2010 +D

Data Manager 

disagreed and 

stated 

borrower's last 

date of 

attendance was 

December 7,

2005. N/A 111

3

222-22-

2222

Mackey, 

Caleb SF 1 Disputed 11/18/2009 01/16/2010 N/A

FY 

2010 -N

See Data

Manager 

response N/A 111

4

5
If the school does not submit the erroneous data appeal in a timely manner, the Department 

will not review the erroneous data appeal and will return all erroneous data appeal materials 

to the school.

If a school is submitting erroneous data appeal allegations for multiple official cohort default 

rates, the school should submit all the erroneous data appeal allegations in the same mailing 

to the data manager and to the Department.

Page 4.5 - 14

How a school submits an Erroneous Data Appeal to the Department

The Department recommends that a school send all correspondence return receipt requested or 

via commercial overnight mail/courier delivery. This will be useful if the school is asked to 

authenticate the timeliness of its response. The school should maintain the documentation that 

verifies the receipt of the erroneous data appeal as well as all other electronic and hardcopy 

documentation submitted as a part of the erroneous data appeal process.

If a school does not meet the timeframe for submitting an erroneous data appeal, the erroneous 

data appeal will not be reviewed.

If sending by courier: If sending by U.S. Postal Service:

U.S. Department of Education

Partner Eligibility and Oversight Services 

Union Center Plaza, 6th Floor (61G3)

830 First Street, NE.

Washington, D.C. 20202

ATTN: Cohort Default Rates Group

U.S. Department of Education

Partner Eligibility and Oversight Services 

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353

ATTN: Cohort Default Rates Group

Do not send materials to any other address at the Department.
What happens after the school submits the erroneous data 

appeal?

The Department will review only the information submitted with the 

erroneous data appeal and will not review information submitted after the 

deadline. The Department will send the school and each involved data 

manager written notification of the Department’s decision. The data manager 

must ensure that NSLDS is correctly updated. The data manager must also 

ensure that its internal records are correctly updated. The Department’s 

decision is final and no further administrative review is provided.

If the Department determines, using the standard of review described in 34 

CFR 668.208(f), that a school’s official cohort default calculation data is 

incorrect, the Department will recalculate the cohort default rate based on 

the corrected data.

If the school was notified that it was subject to sanction and the erroneous 

data appeal is successful and the revised cohort default rate is below the 

sanction level, the Department will withdraw that sanction notice. If the 

school was notified that it was subject to sanction and the erroneous data 

appeal is unsuccessful and the school has no other outstanding adjustments 

or appeals (or if the erroneous data appeal is successful but the revised 

cohort default rate remains above the sanction level), the Department will 

notify the school of the effective date of that sanction.

A school that submits an adjustment and/or an appeal but fails to avoid 

sanctions is liable for certain costs associated with the Direct Loans it 

originated and disbursed during the adjustment and appeal process. Liabilities 

are not calculated for loans that were delivered or disbursed more than 45 

calendar days after the school submits its completed adjustment and/or 

appeal to the Department. Schools may avoid this liability if they choose not 

to certify or originate loans during the adjustment and appeal process.

How does provisional certification affect a school’s ability to 

submit an erroneous data appeal?

To participate in the Department’s Title IV programs, a school must 

demonstrate that it is capable of adequately administering those programs 

under the standards provided in the Title IV program regulations. In order to 

demonstrate administrative capability, a school must meet several 

requirements, including the requirement that the school’s cohort default 

rates are less than 30.0 percent for at least two of the three most recent fiscal 

years. If the school has impaired administrative capability solely because of its 

official cohort default rate, the Department may provisionally certify the 

school.

Page 4.5 - 15

A school that is 

provisionally 

certified solely 

due to its official 

cohort default 

rates can submit 

an erroneous data 

appeal.
A school that is provisionally certified solely due to its official cohort default rates can submit 

an erroneous data appeal. If the erroneous data appeal is successful, the Department will 

recalculate the school’s cohort default rate using the corrected data. If as a result of the 

recalculation the school’s cohort default rates are less than 30.0 percent for at least two of the 

three most recent fiscal years, the Department will withdraw the provisional certification.

A school must wait until it receives notice of provisional certification to submit an erroneous 

data appeal outside of the regular appeal process. A school should not submit an erroneous 

data appeal solely because it believes it may be subject to provisional certification in the 

future. If a school does submit an erroneous data appeal without first receiving notice of 

provisional certification, the erroneous data appeal will not be reviewed.

The process for submitting an erroneous data appeal for schools that receive a notice of 

provisional certification is the same as it is for those schools appealing at the time of the 

release of the official cohort default rates except for the following differences:

The school will not automatically receive the LRDR with the notice of provisional certification. 

As a result, a school subject to provisional certification that wishes to submit an erroneous 

data appeal must request a copy of the school’s LRDR within 15 calendar days of receipt of 

the notice of provisional certification. See Chapter 2.2, “How Schools Get the Rates and Loan 

Data,” for information on requesting a LRDR. The timeframes for submitting the erroneous 

data appeals based upon provisional certification are based first upon the date the school 

receives the notice of provisional certification and then upon the date the school receives the 

LRDR.

Within 15 calendar days after receiving the LRDR, the school must send its erroneous data 

appeal allegations to each relevant data manager and a copy to the Department. See the 

section of this chapter entitled “How does a school submit erroneous data appeal allegations 

to a data manager?” for the process for submitting the erroneous data appeal allegations to 

a data manager.

Within 20 calendar days after receiving the school’s erroneous data appeal allegations, the 

data manager must send a response to the school and a copy to the Department. See the 

section of this chapter entitled “How does a data manager respond to a school’s erroneous 

data appeal allegations?” for additional information about responding to a school’s 

erroneous data appeal allegations.

Upon receipt of the school’s erroneous data appeal allegations, the data manager should 

contact the Department to obtain the date that the school received its notice of provisional 

certification and it’s LRDR in order to verify the timeliness of the school’s submission. If the 

submission is not timely, or if the school has not received a notice of provisional certification, 

the data manager must not review any portion of the school’s erroneous data appeal 

allegations. The data manager should send the school a letter explaining why the erroneous 

data appeal allegations are not being reviewed and send a copy of the letter to the 

Department.

Page 4.5 - 16
Within 30 calendar days after receiving the last response to its erroneous data 

appeal allegations, the school must submit its erroneous data appeal to the 

Department. If the school is submitting an erroneous data appeal for more 

than one cohort fiscal year, it should send the erroneous data appeals to the 

Department in one mailing. See the section of this chapter entitled "What 

does a school do with the data manager’s erroneous data appeal allegations 

response?” for additional information on submitting an erroneous data appeal 

to the Department.

The Department will review only the information submitted with the 

erroneous data appeal and will not review information submitted after the 

deadline. The Department will send the school and each involved data 

manager written notification of the Department’s decision. The data manager 

must ensure that NSLDS is correctly updated. The data manager must also 

ensure that its internal records are correctly updated. The Department’s 

decision is final and no further administrative review is provided.

If the Department determines, using the standard of review described in 34 

CFR 668.208(f), that a school’s official cohort default calculation data is 

incorrect, the Department will recalculate the cohort default rate based on 

the corrected data. If the erroneous data appeal is successful and the cohort 

default rate is recalculated below the relevant threshold, the school will not 

remain provisionally certified based solely on its cohort default rates.

Page 4.5 - 17
Sample Letter 1: School to Data Manager

The letter must include the school’s OPE ID number, a statement indicating that the school is 

submitting erroneous data appeal allegations, and the cohort fiscal years to which the 

erroneous data appeal allegations apply. The letter must feature a subject line that reads 

“Subject: Cohort FY [insert cohort fiscal years being used in the appeal] Erroneous Data 

Appeal Allegations.”

The letter must also include a certification that the information provided is true and correct 

under penalty of perjury and a notation that the school is sending a copy of the letter and the 

spreadsheet to the Department. The school’s President/CEO/Owner must sign the letter, and 

the signature must be followed by a signature block showing the signer’s name and job title.

Page 4.5 - 18

October 12, 2012

ATTN: Lisa Neiers 

Compliance Officer 

State Guaranty Agency 

132 Ocean Front Road

Black Diamond Bay, Nebraska 13213-0132 

Dear Ms. Neiers:

Graphic Tech, OPE ID 099999, is submitting a list of erroneous data appeal allegations for cohort FY 2010 for 

review by State Guaranty Agency. Please see the enclosed spreadsheet, relevant pages of the loan record 

detail reports for the draft and official cohort default rates, and supporting documentation.

I, the undersigned, certify under penalty of perjury that all information submitted in support of this erroneous 

data appeal is true and correct.

Thank you for your consideration.

Sincerely,

Alexander Peachum

President, Graphic Tech

Enclosures

cc: U.S. Department of Education 

Operations Performance Division
Sample Letter 2: Data Manager to School

State Guaranty Agency

132 Ocean Front Road

Black Diamond Bay, Nebraska 13213-0132

October 30, 2012

Alexander Peachum OPE ID 099999 

President

Graphic Tech

2341 Toulouse Street

Cape Canaveral, Florida 54321-2341

Subject: Cohort FY 2010 Erroneous Data Appeal Allegations Response 

Dear Mr. Peachum:

This is State Guaranty Agency’s response to the cohort FY 2010 erroneous data appeal allegations 

Graphic Tech, OPE ID 099999, submitted on October 12, 2012. Please see the enclosed 

spreadsheet.

For each “Agree” in the “Agree/Disagree” column of the spreadsheet, we will update the National 

Student Loan Data System (NSLDS) and our internal records. You should submit the allegation to 

the Department.

For each “Disagree” in the “Agree/Disagree” column of the spreadsheet, we have reviewed our 

records and determined that they do not support the allegation. We have included a comment 

stating our position and attached copies of the documentation supporting our position. We will not 

make a change to NSLDS or to our internal records. If you disagree with our determination, you 

should submit the allegation to the Department.

Sincerely, 

Lesa Neiers

Compliance Officer

Enclosures

The letter must indicate that the data manager is responding to the schools 

erroneous data appeal allegations and include the cohort fiscal years to which 

the erroneous data appeal allegations response applies. The letter must feature 

a subject line that reads “Subject: Cohort FY [insert cohort fiscal years being 

used in the appeal] Erroneous Data Appeal Allegations Response.” The letter 

must also include a statement that a copy of the response has been sent to the 

Department. The responsible data manager official must sign the letter, and the 

signature must be followed by a signature block showing the signer’s name and 

job title.

Page 4.5 - 19
Sample Letter 3: School to Department

The letter must include the school’s OPE ID number, a statement indicating that the school 

is submitting an erroneous data appeal, and a reference to the applicable cohort fiscal 

years to which the appeal applies. The letter must feature a subject line that reads 

“Subject: Cohort FY [insert cohort fiscal years being used in the appeal] Erroneous Data 

Appeal.” The letter must also include a certification that the information provided is true 

and correct under penalty of perjury and a list of any other adjustments and appeals the 

school intends to submit to the Department. Finally, there must be a notation that the 

school is sending a copy of the letter and the spreadsheet to the data manager(s). The 

school’s President/CEO/Owner must sign the letter, and the signature must be followed by 

a signature block showing the signer’s name and job title.

Page 4.5 - 20

November 13, 2012

U.S. Department of Education

Operations Performance Division 

Union Center Plaza, 114B4

400 Maryland Avenue, SW 

Washington, DC 20202-5353

OPE ID 099999

Subject: Cohort FY 2010 Erroneous Data Appeal

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is submitting an erroneous data appeal to its cohort FY 2010 official cohort default 

rate. Please see the enclosed spreadsheet and supporting documentation. Also enclosed are copies of the data 

manager erroneous data appeal allegation responses and the data manager incorrect data challenge responses.

I, the undersigned, certify under penalty of perjury that all information submitted in support of this erroneous 

data appeal is true and correct.

Graphic Tech is also submitting a loan servicing appeal to the Department. 

Thank you for your consideration.

Sincerely,

Alexander Peachum

President, Graphic Tech

Enclosures

cc: State Guaranty Agency
Erroneous Data Appeal 

Checklists

1. School to Data Manager

Determine

 Does the LRDR for the official cohort default rates contain new data or disputed 

data

 Is the school subject to sanction

 Is the school subject to provisional certification based solely on the school’s 

cohort default rate?

 Submit to Data Manager

 Spreadsheet

 Relevant pages of Loan Record Detail Report

 Supporting documentation.

 Letter

2. Data Manager to School

Determine

 Is the school subject to loss of eligibility?

 Is the school subject to provisional certification based solely on the school’s 

cohort default rate?

 Was the school submission timely?

 Does the data manager hold the loans?

 Does the submission include all required materials?

 Does the data manager agree or disagree with the school?

Response to the school

 Spreadsheet

 Supporting documentation.

 Letter

Follow‐up

 Send copy of response to Department

 Update NSLDS and internal records, if necessary

 Send monthly status report to Department

Page 4.5 - 21
Page 4.5 - 22

Erroneous Data Appeal 

Checklists (continued)

3. School to Department

Determine

 Did the data manager agree with any of the erroneous data appeal allegations?

 Does the school agree or disagree with the data manager’s decision?

 Does the school have outstanding new data adjustment allegations or 

outstanding requests for loan servicing records?

 Submit to Department

 Withdrawal notice 

OR

 Spreadsheet

 Supporting documentation.

 Copy of the Data Manager Incorrect Data Challenge Response and/or Erroneous 

Data Appeal Response

 Letter
1

4.6 Loan Servicing Appeal

Improperly Serviced Loans
What is a loan servicing appeal?

A loan servicing appeal is an appeal that alleges a school’s official cohort default rate includes 

defaulted Federal Family Education Loans (FFELs) or William D. Ford Federal Direct Loans (Direct 

Loans) that are considered improperly serviced for cohort default rate purposes. For this Guide, 

“improperly serviced” always means “improperly serviced for cohort default rate purposes only.” 

Failure to perform each of the servicing activities listed in 34 CFR 668.212(b) constitutes improper 

loan servicing for cohort default rate purposes.

Loan Servicing Appeal 

Timeframe

Draft Cycle Not applicable

Official Cycle School receives official cohort default 

rate

School sends request for loan servicing 

records to Data Manager, and to the 

Department via eCDR Appeals

Data Manager notifies school and the 

Department via eCDR Appeals of any 

fee for providing records, together 

with a list of the representative sample 

and a description of how the sample

Within 15 days of 

timeframe begin 

date

Within 20 days of 

receipt of

school’s request

Regulatory citations: 

34 CFR 668.212

The timeframe 

begins on the sixth 

business day 

following the 

transmission date for 

eCDR notification 

packages that is 

posted on the 

Department’s 

website.

was chosen

School pays the fee, if charged (outside 

of eCDR Appeals)

Data Manager documents fee 

disposition and sends loan servicing 

records to school via eCDR Appeals

School requests clarification, 

replacement, or Department records 

via eCDR Appeals

Data Manager sends requested 

information to school via eCDR Appeals

Within 15 days of 

data manager 

notification

Within 20 days of 

receipt of 

payment (or 

within 20 days of 

receipt of

school’s request, 

if no fee is 

charged)

Within 15 days of 

receipt of records

Within 20 days of 

school’s request

Page 4.6 - 2
School sends completed Loan Servicing 

Appeal to the Department via eCDR 

Appeals

Within 30 days of 

receipt of 

records, except, if 

later, as provided 

in 34 CFR 

668.212(c)

(10)(ii), as 

applicable, if 

school is also 

filing a new data 

adjustment or 

erroneous data 

appeal

When is a defaulted FFEL considered improperly serviced for 

cohort default rate purposes?

A defaulted FFEL is considered improperly serviced for cohort default rate 

purposes if one or more of the following occurs:

• The borrower never made a loan payment, and the school can document that the lenderwas 

required but failed to send at least one letter (other than the final demand letter) urging the 

borrower to make payments on the loan.

• The borrower never made a loan payment, and the school can document that the lenderwas 

required but failed to attempt at least one telephone call to the borrower.

• The borrower never made a loan payment, and the school can document that the lenderwas 

required but failed to submit a request for pre-claims assistance or default aversion 

assistance to the guaranty agency.

• The borrower never made a loan payment, and the school can document that the lenderwas 

required but failed to send a final demand letter to the borrower.

• The borrower never made a loan payment, and the school can document that the lenderwas 

required but failed to submit a certification (or other documentation) to the guaranty agency 

to demonstrate that the lender performed skip tracing.

For cohort default rate purposes, skip tracing must be performed if the lender receives 

information before the 241st day of delinquency indicating that the borrower’s address of 

record is incorrect. Skip tracing is not required for cohort default rate purposes if the lender has 

the borrower’s correct address but does not have a record of the borrower’s correct telephone 

number.

If the borrower makes at least one loan payment or if the lender timely performs all of the 

above-listed activities as appropriate, the loan is considered properly serviced for cohort 

default rate purposes. However, servicing and collection activities performed after sending the 

final demand letter will not be considered when determining if a loan has been properly 

serviced.

Page 4.6 - 3
When is a defaulted Direct Loan considered improperly serviced for cohort 

default rate purposes?

A defaulted Direct Loan is considered improperly serviced for cohort default rate purposes if 

one or more of the following occur:

• The borrower never made a loan payment, and the school can document that the 

Federal Servicer was required but failed to send at least one letter (other thanthe 

final demand letter) urging the borrower to make payments on the loan.

• The borrower never made a loan payment, and the school can document that the 

Federal Servicer was required but failed to attempt at least one telephone call to the 

borrower.

• The borrower never made a loan payment, and the school can document thatthe 

Federal Servicer was required but failed to send a final demand letter to the 

borrower.

• The borrower never made a loan payment, and the school can document that the 

Federal Servicer was required but failed to document that skip tracing wasperformed 

if the Federal Servicer determined it did not have the borrower’s current address.

If the borrower makes at least one loan payment or if the Federal Servicer timely performs all 

of the above-listed activities as appropriate, the loan is considered properly serviced for 

cohort default rate purposes. However, servicing and collection activities performed after 

sending the final demand letter will not be considered when determining if a loan has been 

properly serviced.

Which schools are eligible to submit a loan servicing appeal?

Any school that receives an official cohort default rate may submit a loan servicing appeal ifit 

believes that its most recent official cohort default rate calculation includes one or more 

defaulted FFELs or Direct Loans that were improperly serviced for cohort default rate 

purposes. This includes schools that are not subject to sanction and schools that have 

withdrawn from the FFEL and/or Direct Loan programs.

Any school may submit a loan servicing appeal for its most recent official cohort default rate. 

In general, schools that are subject to loss of eligibility maysubmit a loan servicing appeal for 

any official cohort default rate upon which the loss of eligibility is based. However, a school 

may not submit a loan servicing appeal for an official cohort default rate if the school 

previously submitted a loan servicing appeal for that official cohort default rate. Further, a 

school may not submit a loan servicing appeal for an official cohort default rate that was the 

basis, either entirely or partially, of a previoussanction.

What benefit will a school gain from submitting a loan servicing appeal?

If, as a result of a loan servicing appeal (or as the result of a school’s submission of any 

adjustment or appeal), the Department determines that a school’s official cohort default rate 

calculation includes defaulted loans that were improperly serviced for cohort default rate 

purposes, the Department will remove those loans (or, if applicable, a valid statistical 

projection of the total number of borrowers who defaulted due to improper loan servicing)

Page 4.6 - 4
from the cohort default rate calculation and will recalculate the cohort default rate using the 

remaining data. This may lower or not affect the cohort default rate. If the school is subject 

to sanction and the cohort default rate is lowered below the sanction level, the school is no 

longer subject to that sanction. In addition, a school that would otherwise be subject to 

sanction in a later year may avoid being subject to that sanction.

However, even though the Department may revise a cohort default rate, subsequent copies 

of the Loan Record Detail Report (LRDR) for the official cohort default rates will not reflect the 

change. Therefore, it is important for a school to keep a copy of the Department’sfinal

determination letter as the official record of the school’s revised cohort default rate.

What roles do the Department and data managers have in a school’s loan 

servicing appeal?

A data manager is required to review a school’s request for loan servicing records if the 

request is submitted in a timely manner and the data manager has responsibility forthe 

loans. The guarantor/servicer code on the LRDR identifies the data manager for aloan.

Data managers are responsible for providing loan servicing records for the loans they hold. 

The data manager may charge a fee not to exceed $10 per borrower file. If the data manager 

chooses to charge a fee, it is not required to provide the records until after the school pays 

the full fee in a timely manner.

The data manager must respond to the school’s request within 20 calendar days. However, 

the data manager must not review a request for loan servicing records if the school did not 

timely send the request for loan servicing records or make the payment within the 

appropriate 15-calendar-day timeframe.

The Department has two roles in the loan servicing appeal process.

The primary role is to review a school’s loan servicing appeal, which is submitted to the 

Department once the school has received loan servicing records from the data manager and 

has determined that the loans were improperly serviced for cohort default rate purposes.

The Department’s other role is to respond to a school’s request for loan servicing records if 

the Department is the data manager for the loans. The Department is the data managerfor 

FFELs the Department holds and for all Direct Loans.

The Department as data manager responds directly to a school’s request for loan servicing

records for certain FFELs that the Department holds. See the “Data Manager Information” on 

the Default Management website, (under the "Cohort Default Rate Guide” link) for a listing of 

codes that identify the Department as the holder of a loan.

Page 4.6 - 5
The Department as data manager responds through its Federal Servicers to a school’s request 

for loan servicing records for all Direct Loans and for certain FFEL loans that the Department 

holds. In such a case, the Department reviews the school’s loan servicing appeal once the 

school submits it to the Department just as the Department does with respect to loans for 

which the Department is not the data manager.

How does a school submit a request for loan servicing records?

Timing is critical when submitting a loan servicing appeal. A school begins the process by 

sending its request for loan servicing records to the relevant data manager(s) responsible for a 

loan within 15 calendar days of the timeframe begin date via the eCDR Appeals system. The 

eCDR Appeals system is a web-based application that allows schools to request their loan 

servicing records and submit the loan servicing appeal electronically, allows the data 

managers to provide the loan servicing records electronically, and allows the Department to 

review the loan servicing appeal electronically. Submitting the loan servicing appeal 

electronically helps to ensure that the appeal is properly routed to the data managers and the 

Department in a timely fashion. It also allows for greater protection of personally identifiable 

information. While the hyperlink above will take users directly to the eCDR Appeals 

homepage, a link to the eCDR Appeals system is also available from the Default Management

website.

How does a school register to use eCDR Appeals?

All schools must complete the registration process in order to use the eCDR Appeals system. 

Complete instructions for registering for eCDR Appeals can be found in the eCDR Appeals

Registration and User Account Guide. A direct link to this guide, as well as a link to a video 

demonstration of the registration process, can be found on the eCDR Appeals homepage.

Where can a new user find guidance on submitting a loan servicing appeal 

using eCDR Appeals?

The eCDR Appeals homepage contains a link to the eCDR Appeals Loan Servicing Appeal User

Guide. There are separate User Guides for each challenge, adjustment and appeal type that 

may be submitted using eCDR Appeals.

How does a school prepare its request for loan servicing records via eCDR 

Appeals?

If a school believes the official cohort default rate calculation contains any defaulted loans 

that were improperly serviced for cohort default rate purposes, the school should request 

loan servicing records from the data manager(s). However, a school cannot file a loan 

servicing appeal on a loan that is considered in default because the loan met the other 

specified condition as discussed in Chapter 2.1, "How the Rates are Calculated."

The loan servicing records are the collection and payment history records regarding a 

borrower that are—

Page 4.6 - 6
• submitted to the guaranty agency by the lender and used by the 

guaranty agency in determining whether to pay a default claimor

• maintained by the Federal Servicer and used by the Federal Servicer in 

determining the cohort default rate.

A school cannot request specific loan servicing records. If the data manager 

holds loans for 99 or fewer borrowers from the school, the data manager will 

provide loan servicing records for all the borrowers. If the data manager holds 

loans for 100 or more borrowers, the data manager will select loan servicing 

records for a representative sample of the borrowers. The representative 

sample may or may not include the specific records a school wishes to review.

A school should follow the instructions provided in Chapter 6 and 8 of the 

eCDR Appeals Loan Servicing Appeal User Guide to initiate the loan servicing 

appeal, and to prepare and submit the request for loan servicing records to 

the relevant data manager(s).

What does a data manager do when it receives a school’s request 

for loan servicing records?

Timing is critical when a data manager receives a school’s request for loan 

servicing records. A data manager is required to respond to a school’s timely 

submitted request for loan servicing records for those loans for which the 

entity is the data manager via the eCDR Appeals system. The data manager 

must respond within 20 calendar days of receiving the submission. The data 

manager should follow the instructions in Chapter 9 of the eCDR Appeals Loan 

Servicing Appeal User Guide to review the request for loan servicing records.

If a data manager currently holds defaulted loans associated with 99

or fewer borrowers in a school’s official cohort default rate calculation, the 

data manager is required to provide loan servicing records associated with 

each defaulted loan included in the official cohort default rate calculation. 

Loans that are considered in default for the other specified condition are not 

included. If a data manager currently holds defaulted loans associated with 

100 or more borrowers in a school’s official cohort default rate calculation, 

the data manager should identify a representative sample of the borrowers 

and only provide the loan servicing records for those borrowers included in 

the representative sample.

The process of generating a representative sample is done by the data 

manager via eCDR Appeals. The data manager, via eCDR Appeals, identifies a 

sample that is large enough such that the estimate derived from the sample 

is acceptable at a 95 percent confidence level with a plus or minus 5 percent

Page 4.6 - 7

Guaranty agencies should refer to 

Dear Guaranty Agency letter 

dated June 1994 for information 

on determining appropriate 

sample sizes. For a copy of this 

letter, write to the Department at 

fsa.schools.default.management

@ed.gov.
confidence interval for use in determining the number of borrowers who should be 

excluded from the calculation of the cohort default rate due to improper servicing. The data 

manager is required to supply servicing records for each defaulted loan that is associated 

with a borrower included in the sample.

If a data manager is required to provide loan servicing records for a representative sample,a 

school may not request loan servicing records for specific loans. If a school requests loan 

servicing records for specific loans, the data manager should inform the school that, 

because the data manager is supplying loan servicing records for a representative sample of 

loans, the specific loan servicing records the school requests may or may not beprovided.

Within 20 days of receiving the school’s request for loan servicing records, the datamanager 

must send the school and the Department via eCDR Appeals a list of the borrowers included 

in the representative sample and an indication of how the sample was chosen.

What if the data manager requires that a fee be paid to obtain loan servicing 

records?

Timing is critical when requesting a fee for loan servicing records. If the data manager 

charges a fee, the data manager must send the school a request for payment via eCDR 

Appeals within 20 calendar days of receiving the request for loan servicing records. The fee 

may not exceed $10 per borrower file.

The school pays the requested fee to the data manager outside of the eCDR Appeals system. 

The data manager documents the fee disposition in eCDR Appeals. If the school fails to pay 

the fee, the school has waived its right to receive loan servicing records from that data 

manager.

How does a data manager respond after it determines that it is appropriate 

to send the loan servicing records?

Timing is critical when sending loan servicing records. Within 20 calendar days of receiving a 

request for loan servicing records (if the data manager does not charge a fee for loan 

servicing records) or 20 calendar days of receiving payment (if the data manager charges a 

fee for the loan servicing records), the data manager must send the loan servicing records to 

the school via eCDR Appeals.

The data manager should follow the instructions in Chapter 12 of the eCDR Appeals Loan 

Servicing Appeal User Guide to prepare and submit the loan servicing records via eCDR 

Appeals.

A data manager can assist schools in reading the collection history by identifying the 

relevant collection activities for each loan. This may be done by completing the records 

portion of the loan servicing spreadsheet as shown in the sample spreadsheet below, by 

highlighting the collection activities in the actual collection records provided to the school, 

or by creating a summary sheet outlining the abbreviations/codes associated with specific 

collection activities.

Page 4.6 - 8
m

What does the school do with the data manager’s response to 

the school’s request for loan servicing records?

Timing is critical for schools after receiving loan servicing records. The school 

must review the loan servicing records and determine how it will proceed. If 

the school receives a data manager summary of the information in the loan 

servicing records, the school should still review the records to ensure that the 

summary is accurate. If a school finds that a record identified as part of the 

representative sample is missing or illegible, the school may request 

replacement records from the data manager via eCDR Appeals, as explained 

in Chapter 14 of the eCDR Appeals Loan Servicing Appeal User Guide. The 

school has 15 calendar days to request the missing and/or illegible records.

The data manager has 20 calendar days to respond to the request. The data 

manager must either replace the missing and/or illegible records or notify the 

school and the Department via eCDR Appeals that no additional or improved 

copies are available.

Page 4.6 - 9

Sample Spreadsheet for Loan Servicing Records –

Data Manager to School

Type: Response to a Request for Loan Servicing Records Number of Borrowers: 119

Cohort FY: 2013 Number of Loans: 125

From: State Guaranty Agency 

Code: 111

To: Coralville College 

Code: 098998

1

A B C D E F G H I J K L M

Borrowers Borrowers Type of Number of Payment Date Letter Date Call Date Date Final Address Date of Illegible Missing I

SSN Name Defaulted Defaulted Made? Sent Attempted Pre-Claims Demand Known? Skip Records? Records? S

Loans Loans Assistance Letter Sent Tracing

Requested Activity

2 777-77-7777 Green, Marcia SF 1 No 04/08/2013 05/07/2013 No 11/07/2013 Yes N/A No No

3 777-77-7777 Green, Marcia SU 2 No 04/08/2013 05/07/2013 No 11/07/2013 Yes N/A No No

4 888-88-8888 Kent, Dale SF 2 No 12/08/2013 01/06/2014 05/16/2014 No Yes N/A No No

5 999-99-9999 Clark, Shirley SF 1 No 11/10/2013 11/12/2013 12/15/2013 01/04/2014 Yes N/A No No

6 999-99-9999 Clark, Shirley SU 1 No 11/10/2013 11/12/2013 12/15/2013 01/04/2014 Yes N/A No No

Date 10/07/2015 Page 1 of

10

A data manager may choose to complete this spreadsheet in order to assist a school. The 

data manager may also use an alternative method to assist a school.

A blank version of this spreadsheet is posted on the Default Management website.
Within 30 calendar days of receiving the last response to all of the school’s requests for loan 

servicing records, the school must decide how to proceed. If the records indicate that there 

are no improperly serviced loans for cohort default rate purposes in the school’s official 

cohort default rate calculation, the school should withdraw the appeal as explained inChapter

16.2 of the eCDR Appeals Loan Servicing Appeal User Guide.

If the records indicate that there are improperly serviced loans for cohort default rate 

purposes included in the school’s official cohort default rate calculation, the school should 

submit a loan servicing appeal to the Department via eCDR Appeals, as explained in Chapter 

16 of the eCDR Appeals Loan Servicing Appeal User Guide. The school must submit the loan 

servicing appeal within 30 calendar days of receiving the last response to its request for loan 

servicing records with the following exception: If the school is submitting the loan servicing 

appeal to the Department along with a timely new data adjustment and/or a timely erroneous 

data appeal, the school may submit all materials by the later of the following time-frames:

• within 30 calendar days of receipt of the last response to all of the school’s newdata 

adjustment allegations,

• within 30 calendar days of receipt of the last response to all of the school’s erroneous data 

appeal allegations, or

• within 30 calendar days of receipt of the last response to all of the school’s requestsfor 

loan servicing records.

As part of its submission, the school must include the following:

• A spreadsheet that lists the allegations (see sample spreadsheet below).

• A CEO Certification letter on the school’s letterhead (see sample CEO Certification letter at 

end of this chapter).

Page 4.6 - 10
Sample Loan Servicing Appeal Spreadsheet – School to theDepartment

Type: Loan Servicing Appeal Number of Borrowers: 2

Cohort FY: 2013 Number of Loans: 5

From: Coralville College 

Code: 098998

To: OPD

Code:

1

A B C D E F G H I J K L M N O

Borrowers Borrowers Type of Number of Payment Date Letter Date Call Date Date Final Address Date of Illegible Missing Improperly Data

SSN Name Defaulted Defaulted Made? Sent Attempted Pre-Claims Demand Known? Skip Records? Records? Serviced? Manager

Loans Loans Assistance Letter Sent Tracing Code

Requested Activity

2 777-77-7777 Green, Marcia SF 1 No 04/08/2013 05/07/2013 No 11/07/2013 Yes N/A No No Yes 111

3 777-77-7777 Green, Marcia SU 2 No 04/08/2013 05/07/2013 No 11/07/2013 Yes N/A No No Yes 111

4 888-88-8888 Kent, Dale SF 2 No 12/08/2013 01/06/2014 05/16/2014 No Yes N/A No No Yes 111

Date 11/02/2015 Page 1 of 1

A blank version of this spreadsheet is posted on the Default Management website.

If the school receives a completed spreadsheet from a data manager, the 

school is still responsible for reviewing the loan servicing records and ensuring 

that the information the data manager listed on the spreadsheet is correct.

The school should remove any loans that were properly serviced for cohort 

default rate purposes from the spreadsheet before uploading the spreadsheet

to eCDR Appeals. For example, compare the sample spreadsheet that the 

school is uploading with the previous spreadsheet provided to the school by 

the data manager. Note that the school has removed Shirley Clark from the 

list because her loans were properly serviced for cohort default rate purposes.

The school should follow the instructions in Chapter 16 of the eCDR Appeals 

Loan Servicing Appeal User Guide to finalize and upload the school 

spreadsheet, upload the CEO Certification letter, and submit the certified Loan 

Servicing Appeal via eCDR Appeals.

What happens after the school submits the loan servicing appeal? 

The Department will review only the information submitted with the loan 

servicing appeal. The Department will send the school and each involved data

manager written notification of the Department’s decision via eCDR Appeals.

The Department’s decision is final and no further administrative review is 

provided.

If the Department determines, using the standard of review described in 34 

CFR 668.209(f), that a school’s official cohort default rate calculation includes 

defaulted loans that were improperly serviced for cohort default rate 

purposes, the Department will remove the loans (or, if applicable, a valid 

statistical projection of the total number of borrowers who defaulted due to 

improper loan servicing) from the cohort default rate calculation and will 

recalculate the cohort default rate based on the remaining data.

Page 4.6 - 11
If the school was notified that it was subject to sanction and the loan servicing appeal is 

successful and the revised cohort default rate is below the sanction level, the Department 

will withdraw that sanction notice. If the school was notified that it was subject to sanction 

and the loan servicing appeal is unsuccessful (or if the loan servicing appeal is successful but 

the revised cohort default rate remains above the sanction level), and the school has no 

other outstanding adjustments or appeals, the Department will notify the school of the 

effective date of that sanction.

A school that submits an adjustment and/or an appeal but fails to avoid sanctions is liable for 

certain costs associated with the Direct Loans it originated and disbursed during the 

adjustment and appeal process. Liabilities are not calculated for loans that were delivered or 

disbursed more than 45 calendar days after the school submitted its completed adjustment 

and/or appeal to the Department. Schools may avoid this liability if they choose not to certify 

or originate loans during the adjustment and appeal process.

Page 4.6 - 12
Sample CEO Certification Letter 

Loan Servicing Appeal

(School to the Department)

The letter must include the school’s OPE ID number, a statement indicating that the school is 

submitting a loan servicing appeal, and a reference to the applicable cohort fiscal years to which the 

loan servicing appeal applies. The letter must feature a subject line that reads “Subject: Cohort FY

[insert cohort fiscal years being used in the loan servicing appeal] Loan Servicing Appeal.” The letter 

must also include a certification that the information provided is true and correct under penalty of 

perjury. Finally, there must be a notation that the school is sending a copy of the letter and the 

spreadsheet to the data managers of the relevant loans. The school’s President/CEO/Owner must 

sign the letter, and the signature must be followed by a signature block showing the signer’s name 

and job title.

Page 4.6 - 13

Enclosures

cc: State Guaranty Agency

Serena Rooney

President, Coralville College

Sincerely,

Thank you for your consideration.

Subject: Cohort FY XX Loan Servicing Appeal 

To Whom It May Concern:

Coralville College, OPE ID 098998, is submitting an appeal of its cohort FY XX official cohort default 

rate based on allegations of improperly serviced loans. Please see the spreadsheet and loan servicing 

records submitted via the eCDR Appeals system.

I, the undersigned, certify under penalty of perjury that all information submitted in support of this loan 

servicing appeal is true and correct.

OPE ID 098998

November 2, 2018

U.S. Department of Education 

Operations Performance Division 

ATTN: Loan Servicing Appeal 

400 Maryland Avenue, SW 

Washington, DC 20202-5353
Page 4.6 - 14

Loan Servicing Appeal Checklists 

School to Data Manager via eCDR Appeals

Determine

♦ Does the LRDR for the official cohort default rates contain defaulted loans that were 

improperly serviced for cohort default rate purposes?

Submit to Data Manager

♦ Request for records via eCDR Appeals

♦ Fee for Loan Servicing Records (if required)

Data Manager to School

Determine

♦ Does the data manager hold the loans?

♦ Is all the material present?

♦ Does data manager hold more than 99 loans for school?

♦ If so, what is a representative sample of the loans?

♦ Is there a fee for the loan servicing records and, if so, how much isit?

♦ Has the school paid the fee for loan servicing records (if required)?

Response to School

♦ Request for fee

♦ Spreadsheet 

OR

♦ Spreadsheet

♦ Loan Servicing Records
Page 4.6 - 15

Loan Servicing Appeal Checklists (continued) 

School to the Department

Determine

♦ Do the loan servicing records show that the LRDR for the official cohort defaultrates 

contains loans that were improperly serviced for cohort default rate purposes?

Submit to the Department via eCDR Appeals

♦ Withdrawal Notice 

OR

♦ Loan Servicing Appeal case via eCDR Appeals

♦ CEO Certification Letter (See sample letter)
1

4.7 Economically Disadvantaged 

Appeal

Low Income Students
What is an economically disadvantaged appeal?

An economically disadvantaged appeal alleges that a school should not be subject to loss of eligibility 

(or potential placement on provisional certification if based on two successive three-year rates of 

30.0% or more ), because it has a high number of low-income students. There are two types of 

economically disadvantaged appeals: an economically disadvantaged appeal based on low-income rate 

and placement rate and an economically disadvantaged appeal based on low-income rate and 

completion rate.

The type of economically disadvantaged appeal a school may submit depends on whether the school is 

a non-degree-granting school or a degree-granting school. For an economically disadvantaged appeal 

to be successful, a non-degree-granting school must submit an independent auditor’s written opinion 

that—

• The school’s low-income rate (generally, the percentage of students with low incomes) is twothirds or more and

• The school’s placement rate (generally, the percentage of students who became employed in the 

occupation for which the school trained them) is 44 percent ormore.

For an economically disadvantaged appeal to be successful, a degree-granting school must submit an 

independent auditor’s written opinion that—

• The school’s low income rate (generally, the percentage of students with low incomes) is twothirds or more and

• The school’s completion rate (generally, the percentage of students who completed their program) 

is 70 percent or more.

Economically Disadvantaged Appeal

Timeframe

Draft Cycle Not applicable

Official 

Cycle

School receives notice of loss of 

eligibility or notice of a second 

consecutive three-year cohort default 

rate subjecting school to potential 

placement on provisional certification 

as part of the official cohort default rate 

notification package

September

School sends the written assertion by its 

management to U. S. Department of 

Education (the Department)

Within 30 days of 

timeframe begin 

date

School sends completed Economically 

Disadvantaged Appeal to the 

Department

Within 60 days of 

timeframe begin 

date

Page 4.7 - 2

The timeframe 

begins on the sixth 

business day 

following the 

transmission date 

for eCDR 

notification 

packages that is 

posted on the 

Department’s 

website.

Regulatory citations: 

34 CFR 668.213
What benefit will a school gain from submitting an economically 

disadvantaged appeal?

If an economically disadvantaged appeal is successful, the school is exempt from loss 

of eligibility or, if the rate is the second successive three-year rate at or above 30.0 

percent, placement on provisional certification based on that cohort default rate 

until the next official cohort default rates are released. However, a successful

economically disadvantaged appeal does not change a school’s official cohort default 

rate.

Are economically disadvantaged appeals based on a specific 

period of time?

The school must base the economically disadvantaged appeal on any 12-month 

period that ended during the six months immediately preceding the start of the 

cohort fiscal year for which the school is submitting the economically disadvantaged 

appeal. The time period will differ based on the cohort fiscal year used by the school.

The federal fiscal year always begins on October 1st . As a result, the six months 

immediately preceding the start of a fiscal year will always begin on April 1st and 

always end on September 30th . Therefore, the 12-month period the school uses 

must end no earlier than April 1st and no later than September 30th. In order for a 

12-month period to end between April 1st and September 30th , it must begin no 

earlier than April 2nd and no later than October 1st of the preceding year.

Page 4.7 - 3
Cohort Fiscal 

Year

Cohort Fiscal 

Year

Start Date

Acceptable 12-Month Period 

Begins Between

Acceptable 12-Month Period 

Ends Between

FY 2016 10/01/2015 04/02/2014 -- 10/01/2014 04/01/2015 – 09/30/2015

FY 2017 10/01/2016 04/02/2015 -- 10/01/2015 04/01/2016 – 09/30/2016

FY 2018 10/01/2017 04/02/2016 -- 10/01/2016 04/01/2017– 09/30/2017

FY 2019 10/01/2018 04/02/2017 – 10/01/2017 04/01/2018 – 09/30/2018

FY 2020 10/01/2019 04/02/2018 – 10/02/2018 04/01/2019 – 09/30/2019

FY 2021 10/01/2020 04/02/2019 – 10/02/2019 04/01/2020 – 09/30/2020

FY 2022 10/01/2021 04/02/2020 – 10/02/2020 04/01/2021 – 09/30/2021

12-Month Period Status Reason

04/02/2018-04/01/2019 Acceptable Starts within acceptable range; ends 12 months 

later within acceptable range

04/02/2018-04/02/2019 Unacceptable Starts within acceptable range; ends more than 12 

months later

04/01/2018-03/31/2019 Unacceptable Starts and ends outside acceptable range

A school can select the most beneficial 12-month period available. In other words, a non-degreegranting school can identify the acceptable 12-month period with the highest low income rate and 

the highest placement rate. Similarly, a degree-granting school can identify the acceptable 12-month 

period with the highest low-income rate and the highest completion rate.

If a school selects an unacceptable 12-month period, the Department will not review any portion of 

the school’s economically disadvantaged appeal and the economically disadvantaged appeal will be 

denied.

How does a school calculate its low-income rate?

After selecting the 12-month period, the school determines the number of students who were 

enrolled in an eligible Title IV program during any part of the 12-month period. To be included in the 

calculation, the student must have been enrolled at least halftime and enrolled at least one day 

during any part of the selected 12-month period. The school then determines the number of these 

students who are considered low-income students.

Page 4.7 - 4

Acceptable 12-Month Periods

Contact the 

Department at 202-

377-4259 if you 

need guidance on 

choosing an 

acceptable 12-

month period.

To choose an acceptable 12-month period, determine which cohort fiscal year the school will use. Then pick a start date

from the range listed in the “Acceptable 12-Month Period Begins Between” column. The end date will be 12 months 

after the start date, which will fall in the range listed in the “Acceptable 12-Month Period Ends Between” column. The 

Figure below shows an acceptable and some unacceptable 12-month periods for cohort FY 2015.

Examples of Acceptable vs Unacceptable 12-Month Periods 

for Cohort FY 2018
A student is considered to be a low income student if—

• for an award year that overlaps the selected 12-month period, the student has 

an expected family contribution (EFC) that is equal to or less than the largest 

EFC that would allow a student to receive one-half of the maximum Federal 

Pell Grant award, regardless of the student’s enrollment status or cost of 

attendance, or

• for a calendar year that overlaps the selected 12-month period, the student 

has an adjusted gross income (AGI) that, when added to the AGI of the 

student’s parents (if the student is a dependent student) or the student’s 

spouse (if the student is a married independent student), is less thanthe

amount listed in the Department of Health and Human Services (HHS) poverty 

guidelines for the size of the student’s family unit, which can be found on the 

HHS website.

To determine the low income rate, the school divides the number of low income 

students enrolled at least half-time in an eligible program during any part of the 

selected 12-month period (the numerator) by the total number of students enrolled 

at least halftime in an eligible program during any part of the selected 12-month 

period (the denominator). The result is the low-income rate.

Page 4.7 - 5

Low-income students 

enrolled at least 1⁄2-time in an 

eligible program during any 

part of the selected

12-month period

LowIncome 

Rate

For the appeal to be successful, the low-income rate must 

be 2/3 or greater.

Total students enrolled at 

least 1⁄2-time in an eligible 

program during any part of 

the selected

12-month period

An award year begins on 

July 1 of one year and 

ends on June 30 of the 

following year. A 

calendar year begins on 

January 1 and ends on 

December 31.
200

Students 

enrolled at 

least halftime

For example, a school had a total of 200 regular students enrolled at least half time in an eligible 

program and enrolled at least one day during the selected 12-month period. Of those, 80 were 

eligible to receive at least one-half of the maximum Federal Pell Grant and 60 others were below the 

poverty level. Therefore, a total of 140 students are considered low income.

The school’s low-income rate is calculated as follows:

÷ =

How does a non-degree-granting school calculate its placement rate?

As mentioned, only non-degree-granting schools can submit an economically disadvantaged appeal 

based on the school’s low-income rate and placement rate. Degree-granting schools can only submit 

an economically disadvantaged appeal based on the school’s low-income rate and completion rate.

When calculating placement rates, a school must use the same selected 12-month period it used in 

calculating its low-income rate. The school first determines the denominator, which is the number of 

former regular students initially enrolled at least half-time in an eligible Title IV program who meet 

the following criteria:

• The student was originally scheduled to complete his or her program during the selected 12-

month period. The student’s actual last date of attendance does not need to fall within the 

selected 12-month period.

• The date a student was originally scheduled to complete is based on the student’s initial 

enrollment status. For a student who was initially enrolled full-time, the date is based on the 

amount of time specified in the school’s enrollment contract, catalog, or other materials for a fulltime student to complete the program. For a student who was initially enrolled less than fulltime, the date is based on the amount of time specified by the school for the student to complete 

the program if the student remained enrolled in that enrollment status throughout the program.

• The student was enrolled in the program beyond the point at which he or she would have 

received a 100 percent tuition refund. A student who withdrew before the point at which he or 

she would have received a 100 percent tuition refund is not included in the calculation.

These “former students” are included in the placement rate. A student is not included in the

placement rate if, on the date that is one year after the student’s originally scheduled completion 

date, he or she is still enrolled in the same program and is making satisfactory progress.

Page 4.7 - 6

140

Low-Income 

Students

70.0%

Low-income 

Rate
Total Number of 

Former Regular 

Students

50

Former Regular 

Students

After determining the number of “former regular students” (the denominator), the 

school then determines the numerator, which is the number of these “former

regular students” who have been placed in jobs for which the school provided 

training. A student is considered a placed student if the student meets one of the 

following three criteria:

• The student was employed on the date that is one year and one day after 

the student’s last date of attendance at the school in an occupation for 

which the school provided training. For example, if the student’s last date 

of attendance was August 31, the date that is one year and one day after 

the student’s last date of attendance is September 1 of the following year. 

A student is not considered successfully placed if the school was the 

employer.

• The student was employed for at least 13 weeks (91 days) between the 

date the student first enrolled and the date that is one year and one day 

after the student’s last date of attendance at the school in an occupation 

for which the school provided training. A student’s employment while in 

school can be considered as long as the employment was in an occupation 

for which the school was providing training to the student. A student is not 

considered successfully placed if the school was the employer.

• The student entered active duty in the U.S. Armed Forces within one year 

after his or her last date of attendance at the school.

These are the “placed students” (the numerator).

The school then divides the number of “placed students” (the numerator) by the 

total number of “former regular students” (the denominator). The result is the 

placement rate.

÷ =

For example, a school had a total of 50 “former regular students.” Of those, 17 met 

the first criteria (employed on the date one year and one day after the last date of 

attendance), 6 met the second criteria (employed for 13 weeks), and 2 met the third 

criteria (Armed Services). Therefore, the school has a total of 25 “placed students.” 

The school’s placement rate is calculated as follows:

÷ =

Page 4.7 - 7

Placed 

Students

Placement 

Rate

25

Placed Students

50.0%

Placement Rate

For the appeal to be

successful, the 

placement rate must be 

44.0% or greater.
Total Number of Regular 

Students

50

Regular Students

How does a degree-granting school calculate its completion rate?

As mentioned, only degree-granting schools can submit an economically disadvantaged appeal based 

on the school’s low-income rate and completion rate. Non-degree-granting schools can only submit 

an economically disadvantaged appeal based on the school’s low-income rate and placement rate.

When calculating completion rates, a school must use the same selected 12-month period it used in 

calculating its low-income rate. The school first determines the denominator, which is the number of 

regular students initially enrolled on a full-time basis in a Title IV eligible program who were originally 

scheduled to complete their programs during the selected 12-month period. The date a student was 

originally scheduled to complete is based on the amount of time specified in the school’s enrollment 

contract, catalog, or other materials for a full-time student to complete the program. A student’s 

actual last date of attendance does not need to fall within the selected 12-month period.

After determining the number of “regular students” (the denominator), the school then determines

the numerator, which is the number of “regular students” who completed their program. A student is 

considered to have completed a program if the student meets one of the following four criteria:

• The student completed the educational program in which he or she was enrolled.

• The student transferred to a higher-level program at another school.

• The student remained enrolled and was making satisfactory academic progress at the end of the 

selected 12-month period.

• The student entered active duty in the U.S. Armed Forces within one year after his or her last date 

of attendance at the school.

These are the “completed students” (the numerator).

The school then divides the “completed students” (the numerator) by the total number of “regular 

students” (the denominator). The result is the completion rate.

÷ =

For example, a school had a total of 50 “regular students.” Of those, 17 met the first criteria 

(completed the program in which they were enrolled), 12 met the second criteria (transferred to a 

higher-level program), 8 met the third criteria (still enrolled and making satisfactory academic 

progress), and 2 met the fourth criteria (Armed Services). Therefore, the school had a total of 39 

“completed students.” The school’s completion rate is calculated as follows:

÷ =

Page 4.7 - 8

Completed 

Students

Completion 

Rate

39

Completed Students

78.0%

Completion Rate

For the appeal to be 

successful, the 

completion rate 

must be 70.0% or 

greater.
Does a school need to wait until it receives a notice of loss of 

eligibility to calculate its low-income rate and placement rate or 

low-income rate and completion rate?

A school does not need to wait until receiving the notice of loss of eligibility to begin 

preparing materials to submit as part of its management’s written assertion. If the 

school believes that it will be subject to sanction after release of the official cohort 

default rates, and the school believes that it should not be subject to sanction 

because of its low income rate and placement rate or because of its low income rate 

and completion rate, the school should calculate its low income rate and placement 

rate or low income rate and completion rate in advance of the release of the official 

cohort default rates.

How does a school submit an economically disadvantaged appeal?

Timing is critical when submitting an economically disadvantaged appeal. Within 30 

calendar days of the school’s timeframe begin date, the school must determine if it is 

eligible to submit an economically disadvantaged appeal and, if so, submit its 

management’s written assertion to the Department. Within 60 calendar days of the 

school’s timeframe begin date, the school must submit an independent auditor’s 

opinion to the Department.

The school must compile a spreadsheet of the students that qualify to be included in 

the school’s low income rate and a spreadsheet of the students that qualify to be

included in either the school’s placement rate (if the school is a non-degree-granting 

school) or the completion rate (if the school is a degree-granting school).

Sample Low Income Rate Spreadsheet – School to the Department

Type: Low Income Rate 12-Month Period: 06/15/2011 –

06/14/2012

Cohort FY: 2013 Award years: 2010 2011, 2011-2012

From: Graphic Tech Calendar Years: 2011, 2012 

Code: 099999 Low Income Students: 140

To: Operations Performance Division

Total Students: 200

Code: N/A Low Income Rate: 70%

A B C D E F

Student's Student's Student's Economically EFC and AGI, Family Size

SSN Name Enrollment Disadvantaged Award Year And Calendar Year

Dates

111-11-1111 Siebert, Angela 08/25/2011 - 12/30/2011 Yes 0 / 2011-2012 N/A

222-22-2222 Bennett, Derek 08/24/2010 - 06/15/2012 No N/A N/A

333-33-3333 Brewbaker, Mark 08/25/2011 - 05/16/2012 Yes N/A $4,300 / 1 / 2010

Date 10/22/2015 Page 1 of 1

A blank version of this spreadsheet is posted on the Default Management website.

.

Page 4.7 - 9
Sample Completion Rate Spreadsheet –

Degree-Granting School to the Department

Type: Completion Rate 12-Month Period: 06/30/2011 - 06/29/2012

Cohort FY: 2013 Placed Students: 25

From: Coralville College Total Students: 50

Code:

To:

098998

Default Prevention and Management

Placement Rate: 50%

Code: N/A

Date 10/30/2015 Page 1 of 1

Sample Placement Rate Spreadsheet –

Non-Degree-Granting School to the Department

Type: Placement Rate 12-Month Period: 06/15/2011 – 06/14/2012

Cohort FY: 2013 Placed Students: 25

From: Graphic Tech Total Students: 50

Code: 099999 Placement Rate: 50%

To: Default Prevention and Management

Code: N/A

Date 10/22/2015 Page 1 of 1

Page 4.7 - 10

A B C D E F G H I J

1

Student's Student's Student's Student's Student Completed Student's Student Transfers to Student's

Date 

Student

SSN Name Scheduled Enrollment Completed Program Program Higher Program: Date, GPA Entered

Completion Dates Date of Study School Name, School Armed

Date Address, Program Services

2

111-11-

1111

Mann, 

Marcia

05/17/2012 08/26/2011 to

05/17/2012

Yes 05/17/2012 N/A N/A N/A N/A

3

222-22-

2222

Vincent,

Richard

05/17/2012 08/26/2011 to

05/16/2012

Yes N/A N/A N/A N/A 06/01/2012

4

333-33-

3333

Smith, 

Abigail

12/15/2011 01/28/2008 to

05/15/2013

Yes N/A N/A N/A 4.0 N/A

5

444-44-

4444

Wilson, 

Hannah

05/17/2012 08/26/2011 to

05/17/2012

Yes N/A Marine 

Biology

08/14/2008 Orlando 

State University, 121 

Water Street, Orlando, 

Florida Master's of

Marine Biology

N/A N/A

6

555-55-

5555

Michaels, 

Lilly

05/17/2012 08/26/2002 to

12/30/2002

No N/A N/A N/A N/A N/A

A B C D E F G H I

1

Student's Student's Student's Student's Student's Student Student's Student's Student's

SSN Name Scheduled Enrollment Program Placed Employment Job Employer:

Completion Dates of Study Dates Description Name, Address

Date and Phone

2

111-11-

1111

Smith, 

Gene

12/30/2011 08/25/2011 to

12/30/2011

Graphic 

Design

Yes 04/03/2012

to Present

Web Designer TangledWeb.com 68 

Forsyth Canary, Mo 

66666 1-313-131-

3131

3

222-22-

2222

Davis, Mark 06/15/2011 08/24/2010 to

06/15/2011

Graphic 

Design

Yes 05/31/2001 to 

Present

Web Designer TangledWeb.com 68 

Forsyth Canary, Mo 

66666 1-313-131-

3131

4 333-33-

3333

Baker, Tim 12/30/2011 08/25/2011 to

05/16/2012

Graphic

Design

No N/A N/A N/A
After completing the spreadsheets, the school should calculate either its low-income 

rate and its placement rate (if it is a non-degree-granting school) or its low-income 

rate and its completion rate (if it is a degree-granting school).

The school then submits its management’s written assertion to the Department. The 

management written assertion must include the following:

• The low-income rate spreadsheet.

• The placement rate spreadsheet (if the school is a non-degree-granting school) 

or the completion rate spreadsheet (if the school is a degree-granting school).

• A letter on the school’s letterhead (see sample letter #1 at the end of this 

chapter).

Page 4.7 - 11

Non-Degree Granting Schools:

Low-income rate must be 2/3 or greater and placement rate must be 44.0% or 

greater.

Degree Granting Schools

Low-income rate must be 2/3 or greater and completion rate must be 70.0% or 

greater.

How a school submits an

Economically Disadvantaged Appeal to the Department

The Department recommends that a school send all correspondence return receipt requested or via 

commercial overnight mail/courier delivery. This will be useful if the school is asked to authenticate 

the timeliness of its response. The school should maintain the documentation that verifies the receipt 

of the appeal as well as all other electronic and hardcopy documentation submitted as a part of the 

economically disadvantaged appeal process.

If a school does not meet the timeframe for submitting the appeal, the appeal will not be reviewed.

If sending by courier: If sending by U.S. Postal Service:

U.S. Department of Education 

Partner Eligibility and Oversight Services 

Union Center Plaza, 6th Floor (61G3)

830 First Street, NE 

Washington, DC 20202

ATTN: Cohort Default Rates Groups

U.S. Department of Education Partner 

Eligibility and Oversight Services 

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353

ATTN: Cohort Default Rates Group

Do not send materials to any other address at the Department.
The AICPA standards may 

be ordered by calling

1-888-777-7077

or visiting the AICPA 

website.

How does an independent auditor review the management’s written assertion?

To complete the school’s economically disadvantaged appeal; an independent auditor must review 

and attest to the management’s written assertion. The school must submit the following materials to 

an independent auditor:

• The low-income spreadsheet.

• The placement rate spreadsheet (if the school is a non-degree-granting school) or the completion 

rate spreadsheet (if the school is a degree-granting school).

• Any other materials the auditor requests.

• A letter on the school’s letterhead (see sample letter #2 at the end of this chapter).

Upon reviewing the management’s written assertion and any other documentation that the auditor 

deems appropriate, the auditor must provide an opinion as to whether the written assertion 

demonstrates that the school meets the criteria for an economically disadvantaged appeal under 34 

CFR 668.213 (see sample letter #3 at the end of this chapter). The report must also indicate if the 

written assertions are fairly stated in all material respects. A school submitting an economically

disadvantaged appeal must submit the independent auditor’s written opinion to the Department 

within 60 calendar days of the school’s timeframe begin date.

The engagement which forms the basis of the independent auditor’s written opinion must be an 

examination-level compliance attestation engagement performed in accordance with the AICPA’s 

Statement on Standards for Attestation Engagements, Compliance Attestation (AICPA, Professional 

Standards, Volume 1, AT sec. 500), as amended. The attestation must also be performed in accordance 

with the Government Auditing Standards issued by the Comptroller General of the United States.

The school is responsible for sending the independent auditor’s written opinion to the Department 

within the 60-calendar-day deadline. If the school does not submit the written opinion within 60

calendar days of the school’s timeframe begin date, the Department will not review the economically 

disadvantaged appeal and will return all economically disadvantaged appeal materials to the school 

upon the school’s request.

The school must submit the following materials to the Department—

• The independent auditor’s written opinion.

• A letter on the school’s letterhead (see sample letter #4 at the end of this chapter).

What happens after the school submits the independent auditor’s written 

opinion?

The Department will review, using the standard of review described in 34 CFR 668.208(f), only the 

information submitted with the economically disadvantaged appeal and will not review information 

submitted after the 60-calendar-day deadline. The Department will send the school written

notification of the Department’s decision. The Department’s decision is final and no further 

administrative review is provided.

Page 4.7 - 12
If the school was notified that it was subject to loss of eligibility (or potential 

placement on provisional certification based on two successive three year rates at

30.0 percent or higher) and the economically disadvantaged appeal is successful, the 

Department will withdraw the notice of loss of eligibility or potential placement on 

provisional certification. If the school was notified that it was subject to loss of 

eligibility or potential placement on provisional certification and the economically 

disadvantaged appeal is unsuccessful, and the school has no other outstanding 

adjustments or appeals, the Department will notify the school of the effective date 

of the sanction or placement on provisional certification.

A school that submits an adjustment and/or an appeal but fails to

avoid loss of eligibility is liable for certain costs associated with the Federal Family 

Education Loans (FFELs) it certified and delivered and/or the William D. Ford Federal 

Direct Loans (Direct Loans) it originated and disbursed during the adjustment and 

appeal process. Liabilities are not calculated for loans that were delivered or 

disbursed more than 45 calendar days after the school submitted its completed 

adjustment and/or appeal to the Department. Schools may avoid this liability if they 

choose not to certify or originate loans during the adjustment and appeal process.

What roles do data managers have in a school’s economically 

disadvantaged appeal?

Schools submit economically disadvantaged appeals directly to the Department for 

review and consideration. The Department is responsible for determining whether 

schools meet the established economically disadvantaged appeal criteria. Therefore, 

there is no role for data managers.

If a school submits an appeal to the wrong entity or address, the appeal might not be 

reviewed and the school could miss the deadline for submitting the appeal to the 

Department.

If a data manager receives an economically disadvantaged appeal from a school, it 

should immediately contact the school to inform it that the appeal must be sent to 

the Department. The data manager should also indicate that the request must be 

sent to the Department within the appropriate timeframe. The data manager should 

then notify the Department that the data manager has contacted the school.

Page 4.7 - 13
Sample Economically Disadvantaged Appeal Letter #1 

(School to the Department)

The letter must include the school’s OPE ID number, a statement indicating that the school is submitting 

economically disadvantaged appeal data and the type of economically disadvantaged appeal (either low 

income rate and placement rate or low income rate and completion rate) the school is submitting. The 

subject line must read “Subject: Cohort FY [insert cohort fiscal year being used in the appeal] 

Economically Disadvantaged Appeal.” The letter must include a certification that the information 

provided is true and correct under penalty of perjury, a list of any other adjustments and/or appeals the 

school is submitting to the Department, and a statement that the school is sending its management’s 

written assertion to an independent auditor. The school President/CEO/Owner must sign the letter, and 

the signature must be followed by a signature block showing the signer’s name and job title.

Page 4.7 - 14

Enclosures

Alexander Peachum

President, Graphic Tech

Subject: Cohort FY 2015 Economically Disadvantaged Appeal

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is submitting a cohort FY 2015 economically disadvantaged appeal based 

on the school’s low-income rate and placement rate. It is our management’s written assertion that 

Graphic Tech has a low-income rate of 70.0 percent and a placement rate of 50.0 percent for the 12-

month period beginning on June 15, 2017 and ending on June 14, 2018. Please see the enclosed 

spreadsheets.

Graphic Tech has employed Alliance Auditing to review our management’s written assertion.

I, the undersigned, certify under penalty of perjury that all information submitted to you is true and 

correct.

Graphic Tech has also timely submitted an uncorrected data adjustment. 

Thank you for your consideration.

Sincerely,

OPE ID 099999

October 22, 2018

U.S. Department of Education 

Operations Performance Division

ATTN: Economically Disadvantaged Appeal 

400 Maryland Avenue, SW

Washington, DC 20202-5353
Sample Economically Disadvantaged Appeal Letter #2 

(School to Independent Auditor)

The letter should include the school’s OPE ID number, a statement indicating that the school is 

submitting to the auditor economically disadvantaged appeal data, and the type of economically 

disadvantaged appeal (either low income rate and placement rate or low income rate and completion 

rate) the school is submitting. The subject line should read: “Subject: Cohort FY [insert cohort fiscal 

year being used in the appeal] Economically Disadvantaged Appeal.”

The letter should also include a request that the auditor review the written assertions in accordance with 

the standards of the American Institute of Certified Public Accountants (AICPA), the Government 

Auditing Standards issued by the Comptroller General of the United States, and the economically 

disadvantaged appeal criteria under 34 CFR 668.213. Finally, the letter should include a statement 

indicating that the deadline for submitting the independent auditor’s written opinion is within 60 

calendar days of the school receiving the notice of loss of eligibility and a certification that the 

information provided is true and correct under penalty of perjury. The school’s President/CEO/Owner 

should sign the letter, and the signature should be followed by a signature block showing the signer’s 

name and job title.

Page 4.7 - 15

Enclosures

Alexander Peachum

President, Graphic Tech

Subject: Cohort FY 2015 Economically Disadvantaged Appeal

Dear Mr. Falduto:

Graphic Tech, OPE ID 099999, is filing a cohort FY 2015 economically disadvantaged appeal 

based on the school’s low-income rate and placement rate. We ask you to review our written 

assertions in accordance with the standards of the American Institute of Certified Public 

Accountants (AICPA), the Government Auditing Standards issued by the Comptroller General of 

the United States, and the economically disadvantaged appeal criteria under 34 CFR 668.213 to 

determine if our written assertion meets the requirements for an economically disadvantaged 

appeal and is fairly stated in all material respects. You should note that our deadline for

submitting an independent auditor’s written opinion to the U.S. Department of Education is 

November 29, 2018. Please see the enclosed spreadsheets.

I, the undersigned, certify under penalty of perjury that all information submitted to you is true 

and correct.

Thank you for your consideration.

Sincerely,

OPE ID 099999

October 22, 2018

ATTN: Mr. Anthony Falduto 

Alliance Auditing

5222 Antwerp Lane

Aicpa, WI 97697-6976
Sample Economically Disadvantaged Appeal Letter #3 

(Independent Auditor to School—Written Opinion)

The written opinion must be in the form of a letter to the school with the school’s name, the school’s OPE ID number, the 

cohort fiscal year to which the appeal applies, and the auditor’s opinions. The letter should feature a subject line that

reads “Subject: Cohort FY [insert cohort fiscal year being used in the appeal] Economically Disadvantaged Appeal.” The 

auditor must sign the letter, and the signature must be followed by a signature block showing the signer’s name and job 

title.

Page 4.7 - 16

November 21, 2018

Alexander Peachum 

President

Graphic Tech

2341 Toulouse Street

Cape Canaveral, FL 54321-2341

OPE ID 099999

Subject: FY Cohort 2015 Economically Disadvantaged Appeal

Dear Mr. Peachum:

We have examined the written assertions of the management of Graphic Tech, OPE ID 099999, stating that the information 

contained in the economically disadvantaged appeal the school submitted is complete, accurate, and determined in 

accordance with the requirements of 34 CFR 668.213 of Title 34 of the Code of Federal Regulations (34 CFR 668.213). The 

management of Graphic Tech is responsible for the school’s compliance with those requirements. Our responsibility is to 

express an opinion on management’s written assertions about the institution’s compliance based on our examination.

Our examination was made in accordance with standards established by the American Institute of Certified Public 

Accountants (AICPA) and the Government Auditing Standards issued by the Comptroller General of the United States 

accordingly. We also examined, on a test basis, evidence about Graphic Tech’s compliance with 34 CFR 668.213, and 

performed other procedures that we considered necessary under the circumstances. We believe our examination provides 

a reasonable basis for our opinion. Our examination does not provide a legal determination on Graphic Tech’s compliance 

with specified requirements.

In our opinion, management’s written assertion that Graphic Tech has a low income rate of 70.0 percent and a placement 

rate of 50.0 percent for the 12-month period beginning on June 15, 2017 and ending on June 14, 2018, is complete, 

accurate, and determined in accordance with the requirements set forth in 34 CFR 668.213, and is fairly stated in all 

material respects.

This report is intended solely for the information of an audit committee, management, and the U.S. Department of 

Education. However, this report is a matter of public record and its distribution is not limited.

Thank you for your consideration.

Sincerely,

Anthony Falduto

President, Alliance Auditing
Sample Economically Disadvantaged Appeal Letter #4

(School to the Department- cover letter submitting auditor’s written opinion)

The letter must include the school’s OPE ID number, a statement indicating that the school is submitting 

an economically disadvantaged appeal, and the type of economically disadvantaged appeal (either low 

income rate and placement rate or low income rate and completion rate) the school is submitting. The 

letter must feature a subject line that reads “Subject: Cohort FY [insert cohort fiscal year being used in

the appeal] Economically Disadvantaged Appeal.” The letter must also include a certification that the 

information provided is true and correct under penalty of perjury and a list of any other adjustments and 

appeals the school intends to submit to the Department. The school’s President/CEO/Owner must sign 

the letter, and the signature must be followed by a signature block showing the signer’s name and job 

title.

Page 4.7 - 17

Enclosures

Alexander Peachum

President, Graphic Tech

Operations Performance Division

Union Center Plaza 61G3 

400 Maryland Avenue, SW 

Washington, DC 20202-5353

Subject: Cohort FY 2015 Economically Disadvantaged Appeal 

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is submitting a cohort FY 2015 economically disadvantaged appeal 

based on our low-income rate and placement rate. I, the undersigned, certify under penalty of 

perjury, that our low income rate is 70.0 percent, our placement rate is 50.0 percent, and that all 

other information submitted in support of this economically disadvantaged appeal is true and 

correct. Please see the attached spreadsheets for the low-income rate and placement rate, along 

with the independent auditor's attestations on our school's management assertions.

Graphic Tech is submitting its economically disadvantaged appeal at this time; however, the 

school has also submitted an uncorrected data adjustment.

Thank you for your consideration.

Sincerely,

OPE ID 099999

November 30, 2018

U.S. Department of Education
Page 4.7 - 18

Economically Disadvantaged Appeal 

Checklists

School to the Department & 

Independent Auditor

Determine

♦ Is the school subject to sanction or potential provisional certification based on a second 

successive three year cohort default rate above 30 %?

♦ What is the school’s low-income rate?

♦ For a non-degree-granting school, what is the school’s placement rate? For a degreegranting school, what is the school’s completion rate?

Submit to the Department

♦ Spreadsheets (Please remember to number your borrowers)

♦ Letter (see sample letter #1)

Submit to Independent Auditor

♦ Spreadsheets (Please remember to number your borrowers)

♦ Other Requested Materials

♦ Letter (see sample letter #2)

Independent Auditor to School

Determine

♦ Does school meet criteria?

Submit to School

♦ Written Opinion (see sample letter #3)

School to the Department

(after receiving auditor’s response)

Submit to the Department

♦ Copy of Independent Auditor’s Response

♦ Letter (see sample letter #4)
1

4.8 Participation Rate Index Appeal

Low Program Participation
What is a participation rate index appeal?

A participation rate index appeal alleges that a school should not be subject to loss of loan 

eligibility (or potential placement on provisional certification based solely on cohort default rates) 

because the school has a participation rate index that meets one of the following thresholds:

• Subject to sanction based on three consecutive cohort default rates of 30.0 percent or greater—

participation rate index of 0.0625 or less

• Subject to sanction based on most recent cohort default rate over 40.0 percent or greater—

participation rate index of 0.0832 or less

• Subject to potential provisional certification based on two out of three most recent cohort default 

rates of 30.0 percent or greater—participation rate index of 0.0625 orless

Participation Rate Appeal

Timeframe

Draft Cycle Not applicable

Official 

Cycle

School receives notice of loss of eligibility 

(or of a second three-year cohort default 

rate that, in combination with an earlier 

three-year rate, potentially subjects the 

school to provisional certification) as 

part of the official cohort default rate 

notification package

September

School sends completed Participation 

Rate Index Appeal to the U.S. 

Department of Education (the 

Department)

Within 30 days of 

timeframe begin 

date

Which cohort default rate can be used to determine a participation rate 

index appeal?

A school can submit a participation rate index appeal for any cohort default rate upon which a loss 

of eligibility (or, after 2014, potential provisional certification resulting from rates) is based. For 

example, take a sequence of cohort fiscal years: This Year, Last Year, and Two Years Ago.

If a school is subject to loss of eligibility due to three consecutive years of an official cohort default 

rate that is 30.0 percent or greater, the school can submit a participation rate index appeal based 

on the official cohort default rate for This Year, the official cohort default rate for Last Year, and/or 

the official cohort default rate for Two Years Ago. If the sanction is due to an official cohort default 

rate for This Year that is greater than 40.0 percent, the school can submit a participation rate index 

appeal based on the official cohort default rate for This Year. If the school is subject to potential 

provisional certification due to two out of three of its most recent official cohort default rates 

being 30.0 percent or greater, the school can submit a participation rate index appeal based on the 

official cohort default rate for This Year if it is 30.0 percent or greater, the official cohort default 

rate for Last Year if it is 30.0 percent or greater, and/or the official cohort default rate for Two 

Years Ago if it is 30.0 percent or greater (see following chart).

Page 4.8 - 2

The timeframe begins on the 

sixth business day following the 

transmission date for eCDR 

notification packages that is 

posted on the Department’s 

website.

Regulatory citations: 

34 CFR 668.214
Years Used for Participation Rate Index Appeals

Nature of Sanction This Year Last Year Two Years Ago

Three consecutive years of 

cohort default rates that 

are 30.0 percent or greater

Yes – Official Cohort 

Default Rate if equal to or 

greater than 30.0 percent 

(a timely PRI Challenge can 

be taken from the Draft 

Cohort Default Rate)

Yes – Official Cohort 

Default Rate if equal to or 

greater than 30.0 percent

Yes – Official Cohort 

Default Rate if equal 

to or greater than

30.0 percent

Current cohort default rate 

that is greater than 40.0 

percent.

Yes – Official Cohort 

Default Rate (a timely PRI 

Challenge can be taken 

from the Draft Rate).

NO NO

Potential provisional 

certification due to two of 

last three years of cohort 

default rates 30.0 percent 

or greater.

Yes – Official Cohort 

Default Rate if 30.0

percent or greater (a timely 

PRI Challenge can be taken 

from the Draft Rate).

Yes – Official Cohort 

Default Rate if 30.0 percent 

or greater (a timely PRI 

Challenge can be taken 

from the Draft Rate).

Yes – Official Cohort 

Default Rate if 30.0 

percent or greater (a 

timely PRI Challenge 

can be taken from 

the Draft Rate).

Which schools are eligible to submit a participation rate index 

appeal?

Only a school that is subject to loss of eligibility (or, after September 2014, potential 

provisional certification based on rates) because of its official cohort default rates may 

submit a participation rate index appeal.

What benefit will a school gain from submitting a participation rate 

index appeal?

The Department will withdraw a notice of loss of eligibility for a school that submits a 

successful participation rate index appeal. Additionally, a school subject to potential 

provisional certification based on rates will not be provisionally certified based solely on its 

cohort default rates. The school will not be subject to a subsequent loss of eligibility based 

on that official cohort default rate, or provisional certification based on that official cohort 

default rate, due to the successful participation rate index appeal.

Page 4.8 - 3
Date Ranges for Acceptable 12-Month Periods

Acceptable & Unacceptable 12-Month Periods for Cohort FY 2018

See Chapter 2.1 

“How the Rates are

Calculated” for information on 

the formulas used to calculate 

cohort default rates.

Are participation rate index appeals based on a specific period of time?

The school may base the participation rate index appeal on any 12-month period that ended during 

the six months immediately preceding the start of the cohort fiscal year for which the school is 

submitting the participation rate index appeal. Because a school can submit a participation rate index 

appeal for any cohort default rate upon which a loss of eligibility or potential provisional certification is 

based, the time period will differ based on the cohort fiscal year used by the school.

The federal fiscal year always begins on October 1st. As a result, the six months immediately preceding 

the start of a fiscal year will always begin on April 1st and always end on September 30th. Therefore,the 

12-month period the school uses must end no earlier than April 1st and no later than September 30th. 

In order for a 12-month period to end between April 1st and September 30th, it must begin no earlier 

than April 2nd and no later than October 1st of the preceding year.

Cohort

Fiscal Year

Cohort FY

Start Date

Acceptable 12-Month Period

Begins Between

Acceptable 12-Month Period

Ends Between

2016 10/01/2015 04/02/2014-10/01/2014 04/01/2015-09/30/2015

2017 10/01/2016 04/02/2015-10/01/2015 04/01/2016-09/30/2016

2018 10/01/2017 04/02/2016-10/01/2016 04/01/2017-09/30/2017

2019 10/01/2018 04/02/2017-10/01/2017 04/01/2018-09/30/2018

2020 10/01/2019 04/02/2018-10/01/2018 04/01/2019-09/30/2019

2021 10/01/2020 04/02/2019-10/01/2019 04/01/2020-09/30/2020

2022 10/01/2021 04/02/2020-10/01/2020 04/01/2021-09/30/2021

To choose an acceptable 12-month period, a school should first determine which cohort fiscal year the 

school will use. The school then picks a start date from the range listed in the “Acceptable 12-Month 

Period Begins Between” column. The end date will be 12 months after the start date, which will fall in

the range listed in the “Acceptable 12-Month Period Ends Between” column.

12-Month Period Status Reason

04/02/2018-04/01/2019 Acceptable Starts within acceptable range; 12 months

later within acceptable range

04/02/2018-04/02/2019 Unacceptable Starts within acceptable range; more than 12

months later

04/01/2018-03/31/2019 Unacceptable Starts and ends outside acceptable range

A school can select the most beneficial 12-month period available. In other words, a school can 

identify the acceptable 12-month period during which it had the lowest percentage of borrowers and 

use that period when calculating its participation rate index.

If a school selects an unacceptable 12-month period, the Department will not review any portion of 

the school’s participation rate index appeal and the participation rate index appeal will be denied. A 

school may contact the Department at 202-377-4259 to discuss whether the school has selected an 

acceptable 12-month period.

Page 4.8 - 4
School’s cohort 

default rate

How does a school calculate its participation rate index?

After selecting the 12-month period, the school determines the total

number of regular students enrolled at least halftime and for at least one day during 

any part of the 12-month period. It is not necessary for the student’s entire 

enrollment period to fall within the 12-month period. The total number of regular 

students is the denominator. The school then determines the total number of those 

students who borrowed an FFEL or Direct Loan for a loan period that overlaps any 

part of the 12-month period. The total number of borrowers is the numerator.

÷

A regular student is a student who enrolled or was accepted for enrollment at a 

school for the purpose of obtaining a degree, certificate, or other recognized 

educational credential offered by that school. To be included in the participation rate 

index calculation, the borrower must be a student who was enrolled at least halftime and enrolled at least one day during the selected 12-month period.

Once the school has divided the total number of FFEL and Direct Loan borrowers by 

the total number of regular students, the school multiplies the result by the cohort 

default rate upon which the school is basing the participation rate index appeal. The 

result is the participation rate index. A participation rate index is calculated as 

follows:

x =

If a school has fewer than 30 borrowers who entered repayment in the cohort fiscal 

year for which the participation rate index is calculated, the participation rate index 

for that cohort fiscal year may be calculated using either:

♦ The cohort default rate that would result from applying the non-average 

rate formula or

♦ The cohort default rate that would result from applying the average rate 

formula.

To avoid loss of eligibility or potential placement on provisional certification, the 

school’s participation rate index must meet the relevant threshold as indicated on 

page 4.8-1.

Page 4.8 - 5

Total borrowers in 

12-month period

Total regular students in 

12-month period

Total borrowersin 

12-month period

Total regular studentsin 

12-month period

Participation 

Rate Index
30.0

cohort default rate

For example, School A’s official cohort default rate for the current cohort fiscal year is 30.0 percent. 

School A’s two most recent official cohort default rates were 31.0 percent and 33.0 percent. As a 

result, School A is subject to loss of eligibility because it has three consecutive years of official cohort 

default rates that are 30.0 percent or greater.

School A decides to base its participation rate index appeal on the official cohort default rate for the 

current cohort fiscal year. School A had a total of 200 regular students enrolled on at least a half-time 

basis during any part of the selected 12-month period relating to the current cohort fiscal year. Of 

those 200 students, 31 obtained FFELs or Direct Loans for a loan period that overlapped the 12-month 

period. School A’s participation rate index is 0.0465.

x =

Because the participation rate index is less than 0.0625, School A’s participation rate index appeal 

would be successful.

As another example, School B’s official cohort default rate is 50.0 percent. School B’s two most recent 

official cohort default rates were 20.0 percent and 31.0 percent. As a result, School B is subject to 

sanction because it has an official cohort default rate that is greater than 40.0 percent.

School B should base its participation rate index appeal on the official cohort default rate for the 

current cohort fiscal year. School B had a total of 100 regular students enrolled on at least a half-time 

basis during any part of the 12-month period relating to the current cohort fiscal year. Of these 100 

students, 10 obtained FFELs or Direct Loans for a loan period that overlapped the 12-month period. 

School B’s participation rate index is 0.05.

x

Because the participation rate index is less than 0.0832, School B’s participation rate index appeal is 

successful. However, had School B’s two most recent two-year official cohort default rates been 30.0 

percent and 31.0 percent, School B would also be subject to sanction because it had three 

consecutive official cohort default rates that are 30.0 percent or greater. In that event, the 

participation rate index would have to be 0.0625 or less for the participation rate index appeal to be 

successful.

Does a school need to wait until the official cohort default rate is released to 

prepare its participation rate index appeal?

If a school is submitting a participation rate index appeal using a previous cohort fiscal year’s official 

cohort default rate, it can prepare a complete participation rate index appeal before it receives its 

current year official cohort default rate.

Page 4.8 - 6

10 borrowers

100 regular students

50.0

cohort default 

rate

0.05

31 borrowers

200 regular students 0.0465
If a school is submitting a participation rate index appeal using the current cohort fiscal 

year, it cannot perform the final step in the process (multiplying the participation ratio 

by the official cohort default rate) until the school receives its official cohort default 

rate. However, a school can perform the initial steps to identify the data to include in 

the calculation before it receives its official cohort default rate if it believes its current 

cohort fiscal year official cohort default rate will incur sanctions. In that way, a school 

can save time when it receives its official cohort default rate.

What roles do the Department and data managers have in a 

school’s participation rate index appeal?

Schools submit participation rate index appeals directly to the Department for review 

and consideration. The Department is responsible for determining whether schools 

meet the established participation rate index criteria. Therefore, there is no role for 

data managers.

If a school submits a participation rate index appeal to the wrong entity or address, 

the participation rate index appeal might not be reviewed and the school could miss 

the deadline for submitting the participation rate index appeal to the Department.

If a data manager receives a participation rate index appeal from a school, it should 

immediately contact the school to inform it that the participation rate index appeal 

must be sent to the Department. The data manager should also indicate that the 

participation rate index appeal must be sent to the Department within the initial 30-

calendar-day timeframe. The data manager should then notify the Department that 

the data manager has contacted the school.

What materials must a school submit as part of a participation 

rate index appeal?

The participation rate index appeal must include a letter on the school’s letterhead 

(see sample letter at the end of this chapter).

If a school does not have any students who received FFELs or Direct Loans with loan 

periods that overlapped any part of the selected 12-month period, the school does not 

have to submit a spreadsheet to the Department. However, to avoid sanctions, the 

school’s letter to the Department must identify the 12-month period and indicate that 

the school did not have any students who received loans with loan periods that 

overlapped the 12-month period.

If the school is required to submit a participation rate index appeal spreadsheet, it

should use the format shown in the sample spreadsheet below. Using the information 

on the spreadsheet and the participation rate index formula, a school must calculate 

its participation rate index. To avoid loss of eligibility, or potential placement on 

provisional certification, the school’s participation rate index must meet the relevant 

threshold as indicated on page 4.8-1.

Page 4.8 - 7
Page 4.8 - 8

Sample Participation Rate Index Appeal Spreadsheet

Type: Participation Rate Index Appeal Cohort Default Rate: 50.0%

Cohort FY:

From:

2011

Graphic Tech

12-Month Period:

Total Borrowers:

9/01/2009 – 08/31/2010

2

Code:

To:

099999

Default Management PRI:

Total Regular Students:

0.02

50

Code NA

A B C D E

1

Student's Student's Student's Loan Type Loan Period

SSN Name Enrollment (if any)

Dates

2 111-11-1111 Ross, Betsy 08/15/2009 - 05/25/2010 FFEL 08/15/2009 - 05/26/2010

3 222-22-2222 Adams, John 05/15/2009 - 05/26/2010 DL 08/15/2009 - 12/30/2010

4 333-333-3333 Washington, Martha 08/15/2009- 12/30/2009 No N/A

Date 02/14/2014 Page 1 of 1

A blank version of this spreadsheet is posted on the Default Management website.

Schools are not required to submit an independent auditor’s attestation to support the school’s 

participation rate index appeal.

If a school is submitting a participation rate index appeal for multiple cohort default rates, it should 

submit all the participation rate index appeals in the same mailing to the Department. However, the 

school still needs to submit separate documentation for each participation rate index appeal.

How does a school submit a participation rate index appeal?

Timing is critical when submitting a participation rate index appeal. A school must send its 

participation rate index appeal to the Department within 30 calendar days of the timeframe begin 

date. If a school does not meet the 30-calendar-day timeframe for submitting a participation rate 

index appeal, the participation rate index appeal will not be reviewed

Do not send materials to any other address at the Department.

U.S. Department of Education

Partner Eligibility and Oversight Services 

Union Center Plaza, 6th Floor (61G3)

400 Maryland Avenue, SW 

Washington, DC 20202-5353

ATTN: Cohort Default Rate Group

U.S. Department of Education

Partner Eligibility and Oversight Services

Union Center Plaza, 6th Floor (61G3)

830 First Street, NE. 

Washington, DC 20202

ATTN: Cohort Default Rate Group

If sending by courier: If sending by U.S. Postal Service:

How a school submits a Participation Rate Index appeal

to the Department

The Department recommends that a school send all participation rate index appeal correspondence return receipt 

requested or via commercial overnight mail/courier delivery. This will be useful to a school if it is asked to authenticate 

the timeliness of its submission. A school should maintain the documentation that verifies the receipt of the participation 

rate index appeal as well as all electronic and hardcopy documentation submitted as a part of the participation rate index 

appeal process.
What happens after the school submits the participation rate 

index appeal?

The Department will review, using the standard of review described in 34 CFR 

668.208(f), only the information submitted with the participation rate index appeal 

and will not review information submitted after the 30 calendar-day deadline. The 

Department will send the school written notification of the Department’s decision. The 

Department’s decision is final and no further administrative review is provided.

The Department will withdraw the notice of loss of eligibility for a school that submits 

a successful participation rate index appeal. Additionally, a school subject to potential 

provisional certification as a result of cohort default rates will not be provisionally 

certified based solely on its cohort default rates. The school will not be subject to a 

subsequent loss of eligibility or provisional certification based on that official cohort 

default rate due to the successful participation rate index appeal. However, if the 

school’s participation rate index appeal is unsuccessful, and the school has no other 

outstanding adjustments or appeals, the Department will notify the school of the 

effective date of the sanction.

A school that submits an adjustment and/or an appeal but fails to avoid sanctions is 

liable for certain costs associated with the Direct Loans it originated and disbursed 

during the adjustment and appeal process. Liabilities are not calculated for loans that 

were disbursed more than 45 calendar days after the school submitted its completed 

adjustment and/or appeal to the Department. Schools may avoid this liability if they 

choose not to originate loans during the adjustment and appeal process.

Page 4.8 - 9
Sample Participation Rate Index Appeal Letter

The letter must include the school’s OPE ID number, a statement indicating that the school is submitting a participation 

rate index appeal, the relevant cohort default rate on which the appeal is based, and a certification that the information 

provided is true and correct under penalty of perjury. The school must also note its participation rate index and the 12-

month period the school selected. The letter must feature a subject line that reads “Subject: Cohort FY [insert cohort fiscal 

year being used in the challenge] Participation Rate Index Appeal.” The school’s President/CEO/Owner must sign the

letter, and the signature must be followed by a signature block showing the signer’s name and job title.

Page 4.8 - 10

Enclosures

Alexander Peachum 

President, Graphic Tech

Subject: Cohort FY 2015 Participation Rate Index Appeal 

To Whom It May Concern:

Graphic Tech, OPE ID 099999, is submitting a participation rate index appeal based on 

our FY 2015 official cohort default rate. According to our calculations, our participation 

rate index is 0.02. This index is calculated using a 12-month period that began on 

September 1, 2009 and ended on August 31, 2010. Please see the enclosed spreadsheet.

I, the undersigned, certify under penalty of perjury, that all information submitted in 

support of this participation rate index challenge is true and correct.

Thank you for your consideration.

Sincerely

OPEID 099999

February 14, 2018

U.S. Department of Education 

Operations Performance Division 

Union Center Plaza 61G3

400 Maryland Avenue, SW 

Washington, DC 20202-5353
Page 4.8 - 11

Participation Rate Index Appeal 

Checklist

School to the Department

Determine

 Is the school subject to sanction?

 What is the school’s participation rate index?

Submit to the Department

 Spreadsheet (Please remember to number your borrowers)

 Letter
4.9 Average Rate Appeal

Department Offices and Addresses
Regulatory 

34 CFR 66

What is an average rates appeal?

A school facing loss of eligibility based on three consecutive official cohort default rates that equal or 

exceed the relevant threshold as described in Chapter 2.4 is not subject to that sanction if at least two 

of these official cohort default rates are average rates and would have been less than the relevant 

threshold if they had been calculated using only the non-average data for that cohort fiscal year alone. 

(Refer to Chapter 2.1 for an explanation of the average and non-average cohort default rate 

calculations.)

In addition, a school facing loss of eligibility based on one official cohort default rate that is greater 

than 40.0 percent is not subject to that sanction if the official cohort default rate was calculated as an 

average rate.

Average Rates Appeal

Timeframe

Draft Cycle Not applicable

Official Cycle School receives notice of loss of 

eligibility as part of the official cohort 

default rate notification package

September

School sends completed Average 

Rates Appeal to the U.S. Department 

of Education (the Department)

Within 30 days of 

timeframe begin 

date

How does a school qualify for a successful average rates appeal if the school is subject to sanction 

because of three consecutive cohort default rates that equal or exceed the relevant threshold as 

described in Chapter 2.4?

Take a sequence of cohort fiscal years: This Year, Last Year, and Two Years Ago.

School A, a degree-granting school, certified loans for the following students:

• 7 borrowers who entered repayment This Year (of whom 2 defaulted in the cohort default 

period),

• 26 borrowers who entered repayment Last Year (of whom 7 defaulted in that cohort default 

period), and

• 35 borrowers who entered repayment Two Years Ago (of whom 12 defaulted in that cohort 

default period).

Page 4.9 - 2

The “timeframe begin date” is the sixth business day following the transmission date for 

eCDR notification packages that is posted on the Department’s website.

citations: 

8.215
See Chapter 2.1, “How 

the Rates are

Calculated”, for more 

information on average 

rates.

The 18 borrowers (2 + 7 + 12 = 21) who entered repayment and defaulted are divided 

by the 68 total borrowers (7 + 26 + 35 = 68) to give School A an average cohort default 

rate for This Year of 30.8 percent. School A had an average cohort default rate for Last 

Year of 30.0 percent and a non-average cohort default rate for Two Years Ago of 34.2 

percent. Therefore, School A is subject to sanction for This Year because of three 

consecutive years of an official cohort default rate that meets or exceeds the relevant 

threshold. (For purposes of this example the school is subject to sanction based on the 

three-year calculation.)

However, School A had an average cohort default rate for both This Year and Last 

Year. Therefore, School A meets the criteria that at least two of the three most recent 

official cohort default rates be average rates. The next criteria is to determine if those 

cohort default rates would be less than the relevant threshold if they were calculated 

using only data from those cohort fiscal years alone.

If School A’s cohort default rate for This Year was calculated using only data from This 

Year, the cohort default rate for This Year would be 28.5 percent (2 ÷ 7 = 0.285). If 

School A’s cohort default rate for Last Year was calculated using only data from Last 

Year, the cohort default rate for Last Year would be 26.9 percent (7 ÷ 26 = 0.269).

Because the two cohort fiscal years with average cohort default rates would have 

been less than the relevant threshold (for purposes of this example, 25.0%) if the 

rates were calculated using only data from those years alone, School A’s average 

rates appeal will be successful, and the school will not be subject to sanction.

How does a school qualify for a successful average rates appeal if the school is 

subject to sanction because of a cohort default rate that is greater than 40.0percent?

As mentioned previously, a school facing sanction based on one official cohort default 

rate that is greater than 40.0 percent is not subject to that sanction if the official 

cohort default rate was calculated as an average rate. Therefore, if the cohort default 

rate that is greater than 40.0 percent is an average cohort default rate, the school’s 

average rates appeal will be successful, and the school will not be subject to sanction.

How does the average rates appeal process begin?

The Department will automatically determine if a school meets the criteria associated 

with an average rates appeal. This initial determination will take place prior to the 

release of the official cohort default rates. The Department will notify the school if it 

is not subject to sanction at the same time the Department notifies the school of its 

official cohort default rate. In addition, if a school’s official cohort default rate 

changes because of an adjustment or appeal the school submitted, the Department 

will automatically determine if the change in the cohort default rate results in the 

school meeting the criteria for an average rates appeal.

What if a school disagrees with the initial determination by the Department?

If a school disagrees with the initial determination by the Department, the school 

may submit an average rates appeal to the Department. For a school attempting to 

avoid a sanction based on three consecutive years of a cohort default rate that equals 

or exceeds the relevant threshold as described in Chapter 2.4, the average rates 

appeal must include supporting documentation showing that two of the three official 

cohort default rates in question were calculated as average rates and would be less 

than the relevant threshold if calculated only for those cohort fiscal years alone.

Page 4.9 - 3
For a school attempting to avoid a sanction based on a cohort default rate that is greater than 40.0 

percent, the average rates appeal must include supporting documentation showing that the current 

cohort default rate is an average rate. For all average rates appeals, a school must include a

certification from the school’s chief executive officer that all information is true and correct. A school 

must send the average rates appeal within 30 calendar days of the school’s timeframe begin date.

Page 4.9 - 4

Do not send materials to any other address at the Department.

U.S. Department of Education

Partner Eligibility and Oversight Services

Union Center Plaza, 6th Floor (61G3)

400 Maryland Avenue, SW 

Washington, DC 20202-5353

ATTN: Cohort Default Rates Group

U.S. Department of Education

Partner Eligibility and Oversight Services

Union Center Plaza, 6th Floor (61G3)

830 First Street, NE

Washington, DC 20202

ATTN: Cohort Default Rates Group

If sending by U.S. Postal Service: If sending by courier:

How a school submits an

Average Rates Appeal

The Department recommends that a school send all correspondence return receipt requested or via commercial 

overnight mail/courier delivery. This will be useful to the school if it is asked to authenticate the timeliness of its 

submission. A school should maintain the documentation that verifies the receipt of the appeal as well as all electronic 

and hardcopy documentation submitted as a part of the appeal process.
Page 4.9 - 5

Average Rates Appeal 

Checklists

School to the Department

Determine

♦ Is the school subject to loss of eligibility and, if so, whattype?

♦ If the school is subject to loss of eligibility because of three consecutive cohort default rates 

that equal or exceed the relevant threshold as described in Chapter 2.4, were two of those 

cohort default rates calculated as average rates?

♦ If so, would those cohort default rates be less than the relevant threshold if they were 

calculated using only that year’s cohort default rate data alone?

♦ If the school is subject to loss of eligibility because of a cohort default rate that is greater 

than 40.0 percent, was the cohort default rate calculated as an average rate?

♦ Did the Department automatically grant the school an average rates appeal?

Submit to the Department

♦ Supporting documentation

♦ Certification
4.10 Thirty-or -Fewer Borrowers 

Appeal

Department Offices and Addresses
What is a Thirty-or-Fewer borrowers appeal?

If a combined total of thirty or fewer borrowers entered repayment in the three most recent cohort 

fiscal years used to calculate a school’s cohort default rates, the school is not subject to sanction.

Regulatory citations:

34 CFR 682.216

How does a school qualify for a successful thirty-or-fewer borrowers appeal?

Take a sequence of cohort fiscal years: This Year, Last Year, and Two Years Ago. 

School A, a degree-granting school that is subject to sanction, had

♦ 3 borrowers enter repayment This Year,

♦ 10 borrowers enter repayment Last Year, and

♦ 5 borrowers enter repayment Two Years Ago.

The combined total number of borrowers who entered repayment in School A’s three most recent

cohort fiscal years is 18 borrowers (3 + 10 + 5 = 18). Because this number is less than thirty, School A’s 

thirty-or-fewer borrowers appeal is successful and the school is not subject to sanction.

How does the thirty-or-fewer borrowers appeal process begin?

The Department will automatically determine if a school meets the criteria associated with a thirty-orfewer borrowers appeal. This initial determination will take place prior to the release of the official 

cohort default rates. The Department will notify the school that it is not subject to sanction at the 

same time the Department notifies the school of its official cohort default rate.

In addition, if a school’s official cohort default rate changes because of an adjustment or appeal the 

school submitted, the Department will automatically determine if the change in the cohort default rate 

results in the school meeting the criteria for a thirty-or-fewer borrower’s appeal.

Page 4.10 - 2

The timeframe begins on the sixth business day following the transmission date for eCDR notification 

packages that is posted on the Department’s website.

Thirty-or-Fewer Borrowers Appeal 

Timeframe

Draft Cycle Not applicable

Official 

Cycle

School receives notice of loss of 

eligibility as part of official cohort 

default rate notification package

September

School sends completed Thirty or Fewer 

Borrowers Appeal to the U.S. 

Department of Education (the 

Department)

Within 30 days of 

timeframe begin 

date
What if a school disagrees with the initial determination by the 

Department?

If a school disagrees with the initial determination by the Department, the school may submit a 

thirty-or-fewer borrowers appeal to the Department. The thirty-or-fewer borrowers appeal 

must include supporting documentation showing that there were a total of thirty or fewer 

borrowers in the three most recent cohort fiscal years used to calculate its cohort default rates. 

The school must include a certification from the school’s chief executive officer that all 

information is true and correct. The school must send the thirty-or fewer borrowers appeal

within 30 calendar days of receiving the Department’s notice of a loss of eligibility.

Page 4.10 - 3

Do not send materials to any other address at the Department

U.S. Department of Education

Partner Eligibility and Oversight Services

Union Center Plaza, 6th Floor (61G3)

400 Maryland Avenue, SW 

Washington, DC 20202-5353

ATTN: Cohort Default Rates Group

U.S. Department of Education

Partner Eligibility and Oversight Services

Union Center Plaza, 6th Floor (61G3)

830 1st Street, NE. 

Washington, DC 20202

ATTN: Cohort Default Rates Group

If sending by courier: If sending by U.S. Postal Service:

How a school submits a

Thirty-or-Fewer Borrowers Appeal

The Department recommends that a school send all correspondence return receipt requested or via commercial 

overnight mail/courier delivery. This will be useful to the school if it is asked to authenticate the timeliness of its 

submission. A school should maintain the documentation that verifies the receipt of the appeal as well as all electronic 

and hardcopy documentation submitted as a part of the appeal process. If a school does not meet the timeframe for 

submitting the appeal, the appeal will not be reviewed.

Thirty-or-Fewer Borrowers Appeal Checklist

School to the Department

Determine

♦ Is the school subject to loss of eligibility?

♦ Did the school have thirty or fewer borrowers enter repayment in the three most recent 

cohort fiscal years?

♦ Did the Department automatically grant the school a thirty-or-fewer borrowers appeal?

Submit to the Department

♦ Supporting Documentation

♦ Certification