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Shoptalk 538, February 2, 2010

Industry Update

FY 2008 draft cohort default rates to be released

In a recent Electronic Announcement, ED announced that it plans to release the FY 2008 Draft Cohort Default Rates (CDRs) to all eligible schools on February 8, 2010. All schools, both domestic and foreign, enrolled in the eCDR process will receive their FY 2008 draft CDR and accompanying documentation via their Student Aid Internet Gateway (SAIG) mailbox. Any school not enrolled in the eCDR process may download its CDR and accompanying documentation from the National Student Loan Data System (NSLDS) via the NSLDS Professional Access website. A school's draft CDR is found on the last page of the Loan Record Detail Report (LRDR).

Challenges
If a school identifies any data it believes to be inaccurate, it may challenge its draft CDR and request a verification and correction of errors. Challenges of FFELP data must be submitted to the guarantor responsible for managing that data within a 45-day timeline. The timeline will begin February 17, 2010, for domestic schools. For foreign schools, the time period begins on the receipt date of the notification letter and password, whichever is later.

ED also provides every school with 45 calendar days to submit a participation rate index challenge to ED's Portfolio Performance Division. A participation rate index challenge is intended to prevent potential adverse consequences anticipated by a school based on a high official CDR. These challenges are based on a low number of student loan borrowers rather than allegation of inaccurate data.

Mailing challenges
Schools may mail challenges to TG at one of the following addresses:

For regular mail:

TG
Attn: Ken Johnson, Compliance Analyst
P.O. Box 83100
Round Rock, TX 78683-3100

For overnight delivery services:

TG Distribution Center
Attn: Ken Johnson, Compliance Analyst
3500 Wadley Place, #303
Austin, TX 78728-1244

Cohort Default Rate Guide
ED's Cohort Default Rate Guide (Guide) is Web-based and can be accessed via ED's Default Prevention and Management website. Additionally, the Cohort Default Rate Guide Quick Reference (Quick Reference) is available as an easy-to-understand resource that provides a high-level overview of the CDR process. You can access both the Guide and Quick Reference at http://ifap.ed.gov/DefaultManagement/finalcdrg.html.

How TG can help
TG considers default prevention a top priority. The ever-changing environment in the financial aid industry as well as current economic conditions makes default prevention a critical activity. TG's default prevention team works with the financial aid community in developing strategies to more effectively prevent student loan default. The team also works with borrowers by offering information about default and repayment. The team can help schools in a number of ways, including:

  • Explaining the rate calculation, including how the CDR is calculated and how it affects your campus;
  • Helping to create and implement campus-based default prevention plans;
  • On-site consulting in the areas of financial literacy and default aversion;
  • Training on TG's Integrated Default Assistant™ (IDA™), an online tool for tracking and managing cohort default rates for TG-guaranteed loans; and
  • Assisting with default rate challenges as well as answering policy questions regarding default aversion.

To learn more
For questions about the FY 2008 draft CDR challenge procedures, contact Ken Johnson at (800) 252-9743, ext. 4701, or send an email message to ken.johnson@tgslc.org.

Schools are encouraged to register for and attend TG's upcoming webinar titled "How to Challenge Your Cohort Default Rate," scheduled for Thursday, February 4, 10 a.m.-11 a.m. Central Time, and again, 3 p.m.-4 p.m. Central Time. Registration for this event is available on TG Online.

If you have questions about how you can benefit from TG's default prevention team's services, contact TG's default aversion consultants Joe Braxton at (800) 252-9743, ext. 4696; Rett Anderton at (800) 252-9743, ext. 4765; or Cindy Marrs at (800) 252-9743, ext 4860. You can also contact them by sending an email message to positivebalance@tgslc.org.

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