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Description: Tags: 1130DefaultRates

The document discusses three types of default rates for federal student loans: 1) Cohort default rate is the percentage of borrowers who enter repayment on certain loans in a fiscal year that default within the next fiscal year. The Department of Education releases these rates annually. 2) Budget lifetime default rate is the projected percentage of loan dollars originated in a fiscal year that may default over the 20-year loan period, as reflected in the President's budget. 3) Cumulative lifetime default rate is the percentage of loans that entered repayment in a fiscal year that have defaulted through the current fiscal year. Unlike the cohort rate, it focuses on risk of default over the life of the loan. This rate is updated

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18 views

Description: Tags: 1130DefaultRates

The document discusses three types of default rates for federal student loans: 1) Cohort default rate is the percentage of borrowers who enter repayment on certain loans in a fiscal year that default within the next fiscal year. The Department of Education releases these rates annually. 2) Budget lifetime default rate is the projected percentage of loan dollars originated in a fiscal year that may default over the 20-year loan period, as reflected in the President's budget. 3) Cumulative lifetime default rate is the percentage of loans that entered repayment in a fiscal year that have defaulted through the current fiscal year. Unlike the cohort rate, it focuses on risk of default over the life of the loan. This rate is updated

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anon-320461
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Default Rates

Cohort Default Rate

A cohort default rate is the percentage of a borrowers who enter repayment on certain
Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan
(Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to
September 30, and default or meet other specified conditions prior to the end of the next
fiscal year. The U.S Department of Education releases official cohort default rates once
per year.

Budget Lifetime Default Rate

The budget lifetime default rate is a projected percentage of the dollars that are
originated in the Federal Family Education Loan and Direct Loan Programs for a
particular fiscal year and that may default during a projected 20 year life of the loan
period. This rate is reflected in the President’s budget.

Cumulative Lifetime Default Rate

A cumulative lifetime default rate is a percentage of loans that enter repayment in the
Federal Family Education Loan and Direct Loan Programs for a particular fiscal year and
have defaulted through the current ending fiscal year. Unlike the cohort default rate,
which is utilized as an administrative tool for schools and reflects a two-year indicator
period, the cumulative lifetime default rate is a performance tool focused on the risk of
default throughout the life of the loan. This rate will be updated and published annually.

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