OGSLP Online News

February 5, 2009

Focus on HEOA: Cohort Default Rates

On February 9, 2009, the Department of Education (ED) will release federal fiscal year (FFY) 2007 Draft Cohort Default Rates for all eligible schools for informational purposes.

Comparison of Current and HEOA Calculation Methodologies

ED currently defines the cohort default rate as the percentage of a school's borrowers who enter repayment on Federal Stafford, Federal SLS, and Direct Stafford/Ford loans during a particular federal fiscal year and default prior to the end of the next fiscal year. The Higher Education Opportunity Act (HEOA) extended the length of the cohort default rate calculation from the current two-year period to a three-year period and increased the ceilings for most benefits and sanctions beginning with the FFY 2009 rates. 

Currently, schools with a rate below 10 percent for each of the three most recent fiscal years may deliver or disburse, in a single installment, loans that are made for one semester or other prescribed academic period and may also choose not to delay the first disbursement of a loan for 30 days for first-time, first-year undergraduate borrowers. HEOA increases this threshold from 10 percent to 15 percent beginning in FFY 2012. 

In addition, schools with cohort default rates of 25 percent or higher for three consecutive years or 40 percent or higher for any one year may lose access to all Title IV funds. HEOA increases the multi-year threshold from 25 percent to 30 percent beginning FFY 2012; however, the 40 percent criterion remains unchanged.

Are you wondering how the HEOA changes to the cohort default rate calculation might affect your campus? The following tools were developed by OGSLP to help you understand HEOA’s impact on your cohort default rate and to assist you in your default prevention efforts.

OGSLP’s Cohort Comparison Chart

One of the many services OGSLP provides is a cohort comparison chart.  Using your 2006 cohort rate, we extend the calculation to the three-year period, providing a viable estimated rate for your school and a corresponding sector rate for comparison purposes. See the sample below.

2006 Cohort Default Rate Estimates

Cohort Year


2-Year Rate

3-Year Rate

Percent Increase from 2- to 3-Year Rate


4-Year Public Institutions





ABC University




NOTE: These estimates are based solely on loans guaranteed by OGSLP.

OGSLP's Default Prevention School Tool

OGSLP developed the Default Prevention School Tool (DPST) to offer an excellent solution for schools to maximize resources while combating student loan delinquencies. Converting the existing OGSLP Delinquent Borrower by School report into an interactive application, DPST is a versatile tool that allows customers to access reports, use pre-formatted letters, and utilize a comprehensive database and search feature to help manage their OGSLP cohort default rate. DPST is an easy-to-use database offering current borrower cohort information and providing special support to schools as they focus on students who are most at risk for delinquency or default.

OGSLP's Cohort Analysis Service

OGSLP also offers a cohort analysis service as part of our ongoing default prevention efforts. Utilizing cohort rate data supplied by the Department of Education via the Student Aid Internet Gateway (SAIG), OGSLP is able to identify the characteristics and trends of a school’s borrowers who are categorized as "cohort default rate borrowers." This analysis enables schools to identify default trends and groups of borrowers who are more likely to default. Identification of higher risk borrower groups helps schools prioritize activities and assign resources as they build successful default prevention programs.

OGSLP's Default Prevention team is ready and able to help schools reach their default prevention goals. For more information or to request a cohort comparison chart, DPST demonstration or cohort analysis, contact Wayne Sparks, OGSLP's Default Prevention Manager, at 405.234.4358, 800.247.0420 (toll-free) or wsparks@ogslp.org.