Decoding CDR Reports and Correcting Data

1. Decoding CDR Reports and Correcting Data

2. Why Review Your CDR Data Administrative capability • High CDR could result in • Adverse publicity • Loss of Title IV eligibility • Loss of access to private loan funds • Extra work

3. Why Review Your CDR Data • Correct data • Accurate data • Timely data Administrative capability Better-quality decision-making

4. Why Review Your CDR Data • When borrowers default • Pay more in interest and collections fees • Government can seize wages, tax refunds, Social Security, and disability benefits Administrative capability Better-quality decision-making Better service to students

5. Objectives • Understand Cohort Default Rate (CDR) cycle • Decode Loan Record Detail Report • Learn how to collect, compare, and correct data • Know common appeal errors to avoid

6. Understanding the Cohort Default Rate Cycle

7. What Is a Cohort Default Rate? The Numerator is the number of Stafford loan borrowers from the denominator who default within a cohort period All borrowers entered repayment in 2011 = Did not default in 2011-2013 = Defaulted in 2011 = Defaulted in 2012 = Defaulted in 2013 The Denominator is the number of Stafford loan borrowers who enter repayment within a cohort period

8. What Is a Cohort Default Period? 2-year CDR Example FY2011 3-year CDR Example FY2011 Borrowers who entered repayment between 10/01/2010 and 9/30/2011 and who defaulted between 10/01/2010 and 9/30/2013 Borrowers who entered repayment between 10/01/2010 and 9/30/2011 and who defaulted between 10/01/2010 and 9/30/2012 Borrowers who entered repayment between 10/01/2010 and 9/30/2011 Borrowers who entered repayment between 10/01/2010 and 9/30/2011

9. What Is a Cohort Default Rate Cycle? Official Rate Cycle Draft Rate Cycle • Department sends draft and official cohort default rates to schools • Eligible to participate in any of the Title IV programs • Borrower in repayment in the current or any of the past cohort default rate periods February August September January Draft default rates released to schools only Official rates released to schools and the general public Source: CDR Quick Reference Guide

10. What Is a Cohort Default Rate Cycle? Official Rate Cycle Draft Rate Cycle • Official cohort default rates are available at: • ed.gov/FSA/defaultmanagement/cdr.html February August September January Draft default rates released to schools only Official rates released to schools and the general public Source: CDR Quick Reference Guide

11. No Sanctions or Benefits Associated with Draft CDR • Keep in mind • Schools that fail to challenge accuracy of draft rate data through incorrect data challenge can’t contest accuracy of official rate data

12. Publication of CDRs

13. How Are Schools Notified? • CDR notification packages • Sent electronically to all domestic schools (eCDR) • Student Aid Internet Gateway (SAIG) • 5 business days to report problems • Challenges, adjustments, and appeals begin 6th day following announced transmission date • Posted on IFAP (ifap.ed.gov)

14. What is Included in the eCDR? • CDR package includes • Cover letter • Two Loan Record Detail Reports (LRDR) • Reader-friendly • Extract-type • CDR package includes • SHDRLROP • SHCDRROP • SHCDREOP • Cover letter • Loan Record Detail Reports (LRDR) • Reader-friendly • Extract-type

15. Decoding the Loan Record Detail Report

16. Loan Record Detail Report (LRDR) • Contains borrower information for Stafford loans used to calculate draft or official cohort default rate • Includes borrower’s • Name, Social Security number • Date borrower entered repayment • Date of default (if applicable) • Loan type • Borrowers with multiple loans counted only once

17. Review LRDR • Check for accuracy • Compare to school records • Repayment Date • Default Status • Cancellations/Refunds

18. What is Included in the eCDR? • Beginning with the FY 2009 cohort • MUST use eCDR appeals to prepare and submit challenges or adjustments

19. Reader-Friendly LRDR

20. Loan Record Detail Report – Data Manager • Three-digit code used to identify entity reporting the information Guaranty Agency Department of Education

22. Loan Record Detail Report – Repayment Date • Indicates when borrower began repayment • Determines if loan is included in denominator

24. Loan Record Detail Report – Default Date • Indicates the date • Direct Loan considered in default based on past due status OR • Guarantee agency paid default claim to lender for FFELP Loan

26. Loan Record Detail Report – CDR Usage • Indicates how loan is included in calculation • “D” Denominator only • “B” Both Numerator and Denominator • “N” Not Used • “E” Eligible, but not counted

28. Important Codes to Know Source: CDR Guide, page 2.3-7

29. Important Codes to Know Source: CDR Guide, page 2.3-8

30. Collecting and Comparing Data

31. Collecting the Data • Determine data that needs to be captured • Last date of attendance (LDA) • Less than half-time date (LTH) • Withdrawal date (WD) • Date entered repayment (DER) • Claim paid date/default date (CPD/DD) • Spreadsheet or database to collect data • Implement this process early

32. Collecting the Data • Internal resources available on-campus • External resources • NSLDS • Servicer reports • Guaranty agencies Determine whereto find data

33. Possible Errors on LRDR • LRDR incorrectly: • Reports data element and data element should be changed • Includes borrower whose repayment date does not fall within cohort fiscal year; borrower removed from calculation • Excludes borrower who entered repayment within cohort; borrower added to calculation

34. Should the Loan be Included in FY09 3-year CDR? • Darin • Graduated from school 11/4/2008 • NSLDS reveals transferred to another school 2/4/2009 Transferred to other school LDA Date entered repay Date entered repayment Default date • 2/4/2009 • Actual 5/13/2010 • 5/8/2011 • Estimated 5/5/2009 • 11/4/2008

35. Should the Loan be Included in FY09 3-year CDR? No • Darin If date of repayment is delayed by re-enrolling in school prior to the end of grace, inclusion in a CDR calculation is also delayed • Defaulted between 10/1/2008 – 9/31/2011 • Defaulted 5/8/2011 • Y • FY2009 (10/1/2008 – 09/31/2009) • Date Darin entered repayment 5/13/2010 • N

36. Should the Loan be Included in FY09 3-year CDR? • Kara • Left school 11/4/2008 • Transferred to another school 1/12/2010 • Loans deferred 1/12/2010 LDA Date entered repayment Transferred to other school • 11/4/2008 • 5/5/2009 • Loan deferred 1/12/2010

37. Should the Loan be Included in FY09 3-year CDR? Yes • Kara • Deferments or forbearances do not alter the date the borrower entered repayment • Defaulted between 10/1/2008 - 9/31/2011 • No default • N • FY2009 (10/1/2008 – 09/31/2009) • Date Kara entered repayment 05/05/2009 • Y

38. Should the Loan be Included in FY09 3-year CDR? • Kyle • Withdrew from school 6/1/2008 • Defaulted on loans 5/27/2010 • Consolidated three loans 12/4/2010 in order to regain Title IV eligibility Consol date Default date LDA Date entered repayment Consol enters repay • 5/27/2010 • 6/1/2008 • 12/2/2008 • 2010 • 12/4/2010

39. Should the Loan be Included in FY09 3-year CDR? Yes • Kyle • The date underlying loans entered repayment is the date used in the cohort default rate calculation • Defaulted between 10/1/2008 – 9/31/2011 • Kyle defaulted 5/27/2010 • Y • FY2009 (10/1/2008 – 09/31/2009) • Date Kyle entered repayment 12/02/2008 • Y

40. Should the Loan be Included in FY09 3-year CDR? • Bethany • Graduated from school 6/1/2008 • Paid loan in full on 7/1/2008 Harrah’s Date entered repayment LDA • 12/2/2008 • Loan paid in full 7/1/2008 • 6/1/2008

41. Should the Loan be Included in FY09 3-year CDR? No • Bethany • The paid-in-full date becomes the new repayment date. • Same is true for loans discharged due to death, bankruptcy, disability • Defaulted between 10/1/2008 – 9/31/2011 • No default N • FY2009 (10/1/2008 – 09/31/2009) • Date Bethany paid in full 07/01/2008 N

42. Correcting Data

43. Challenges of Draft CDR • Used to correct errors on draft CDR • Submitted to guarantors (FFEL) and/or DL servicers via eCDR appeals within 45 days of timeframe begin date • Relevant information for each borrower challenged • Supporting documentation for each borrower challenged • CEO Certification Letter Incorrect Data Challenge (IDC)

44. Challenges of Draft CDR • Only available if school potentially subject to loss of eligibility (or provisional certification) based on draft rates • Must send completed PRI Challenge to U.S. Department of Education within 45 days of timeframe begin date • PRI Challenge Spreadsheet (CDR Guide page 4.2 – 8) • Letter Participation Rate Index Challenge (PRI)

45. Adjustments of Official CDR • Ensures school’s official cohort default rate calculation reflects changes correctly agreed to as result of incorrect data challenge • Must submit UDA to Department within 30 calendar days of timeframe begin date via eCDR appeals Uncorrected Data Adjustment (UDA)

46. Adjustments of Official CDR • Allows school to challenge accuracy of “new data” included in most recent official CDR • Compare LRDR of draft CDR to LRDR of official CDR to determine if new data reported correctly • Must submit NDA to Data Manager via eCDR appeals within 15 days of timeframe begin date • Relevant information for each borrower challenged • Supporting documentation for each borrower challenged • CEO Certification Letter New Data Adjustment (NDA)

47. Appeals of Official CDR • Alleges school’s official cohort default rate includes defaulted loans considered improperly serviced for cohort default rate purposes • Example • Borrower never made loan payment and school can document that lender/servicer failed to complete due diligence Loan Servicing Appeal (LS)

48. Appeals of Official CDR • Must send request for loan servicing records to Data Manager and Department within 15 days of timeframe begin date Loan Servicing Appeal (LS)

49. Appeals of Official CDR • Data Manager notifies school and Department within 20 days of receipt • Fees for providing records • List of representative sample • Description of how sample was chosen • School must pay fee, if charged, within 15 days of data manager notification Loan Servicing Appeal (LS)

50. Appeals of Official CDR • Available if school is subject to loss of eligibility (or provisional certification) based on official rates • School previously challenged accuracy of data as part of Incorrect Data Challenge • Review of loan record detail reports for draft and official rates show new data Erroneous Data Appeal (ER)