How to calculate your school’s cohort default rate

cohort default rate


By now, your school has received its draft cohort default rate (CDR) for fiscal year 2013. If this is the first time you’ve checked your school’s CDR since official rates were published in September, this is the article for you.


Checking your CDR twice a year – during draft publication and official rate publication – is not a reliable way to inform student repayment success efforts. You should regularly monitor your CDR and your at-risk borrowers to mitigate default risks and assist borrowers who encounter repayment challenges. There are two ways you can check your CDR on-demand: calculate it yourself or work with a vendor. Let’s examine the mechanics of each.


Manually calculate your school’s CDR


Although some schools rely on the federal government’s draft and official CDR publications, by the time the rates are published, it's too late for many borrowers. The process can be somewhat complicated, however, you should be able to calculate your CDR on your own using the following steps:


Step one: Access NSLDS


Log in to National Student Loan Data System (NSLDS) Professional Access website using the individual User ID and password assigned to you.


Step two: Request your SCHPR1


Navigate to the “Report” tab. A list of reports available for download will appear. Make sure to get familiar with these reports – they contain a lot of important information! For the purposes of calculating your CDR, you want your School Portfolio Report (SCHPR1) for the relevant cohort period. The report is delivered via the Student Aid Internet Gateway (SAIG).


Step three: Decode your SCHPR1


After you download your SCHPR1 from SAIG, use the NSLDS School Portfolio File Layout Guide to decode it.


Step four: Calculate your CDR


Divide the number of borrowers who have at least one loan that defaulted within the cohort period by the number of borrowers who have at least one eligible loan in that cohort year.


A loan is considered to be in default within the cohort period if it meets one of the two following criteria:


  1. The loan has the SCHPR1 field “CDR Date of Default” populated with a date prior to Oct 1 of the 3rd fiscal year following the close of the cohort year – e.g. a loan that entered repayment on 5/1/2014, which is in cohort year 2014, must default on or before 9/30/2016 to be counted as a default for cohort 2014 CDR purposes.
  2. The loan has the SCHPR1 field “Claim/Discharge Reason Code” populated with “DF” and “Claim/Discharge Paid Date” populated with a date meeting the same criterion as above.


Tip: The SCHPR1 is a loan detail report and cohort is not computed. You’ll have to calculate cohort based on the value in the “Date Entered Repayment” field. A loan that is paid in full prior to entering repayment will be counted as part of the cohort year in which it was paid in full, so for this you would need to check the balance date rather than the date entered repayment.


Work with a student loan default management vendor


Accurately calculating your CDR isn’t easy, requiring a strong understanding of NSLDS, FSA file layouts, and meticulous attention to detail. Rather than risk a mistake based on inexperience or human error, schools are increasingly choosing to work with specialized default management vendors, like i3 Group.


Vendors have expertise in interpreting the FSA reports, which are frequently not as straightforward as they appear (the quirk with cohort calculation is just one of many details you must account for when translating raw SCHPR1 data into easily digestible reports). They are able to interpret your SCHPR1 and deliver actionable information, such as proactively identifying at-risk students and projecting your potential CDR month-to-month based on the most current data available.


Added benefits of working with a default management vendor:


  • Vendors have existing processes to request, import, and process raw SCHPR1 data into reports you can act on.
  • Working with a reputable vendor typically yields faster, more sustainable CDR improvement and ensures the best possible experience for borrowers.
  • Default management vendors will track their efforts and report it to you on a weekly basis. Most vendors can even build custom reporting if there’s something you need to know that isn’t included in their standard reports.


Remember that default management vendors don’t exist to simply provide weekly reports. The primary role of a default management vendor is to reach out to help borrowers before they default on their loans. The on-demand reports are just a bonus!


Over the course of millions of student interactions, i3 has built data management and outreach processes proven to help delinquent students develop affordable, sustainable repayment strategies. If you are interested in learning more about i3’s services, please contact us.

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