Official Cohort Default Rates (CDR) and Trends
The Cohort Default Rate (CDR) is the percentage of borrowers who enter repayment in a given Fiscal Year (FY) who default on their loans by the end of the next FY (the two-year cohort period). For FY 2002, CDR is the number of borrowers who entered repayment in FY 2002 and defaulted by the end of FY 2003, divided by the total number of borrowers who entered repayment in FY 2002. Schools are subject to sanctions if their CDR exceeds 25 percent for three consecutive years, or 40 percent in one year (ED, National Student Loan Default Rates, 2004).
The official CDR in the U.S. is declining – from 11.6 percent for borrowers entering repayment in FY 1993 to 5.2 percent for borrowers entering repayment in FY 2002. In addition, the number of schools subject to sanctions as a result of their CDR has declined from 433 schools sanctioned due to FY 1993 CDR to 1 school sanctioned due to FY 2002 CDR (ED, National Student Loan Default Rates, 2004).
CDR by school sector is also declining. From FY 2000 to FY 2002, CDR decreased from 4.8 percent to 4 percent for public four-year schools, from 9.2 percent to 8.5 percent for public two-year schools, from 3.8 percent to 3.1 percent for private four-year schools, and from 9.4 percent to 8.7 percent for proprietary schools (ED, National Student Loan Default Rates, 2004).
The Cohort Default Rate (CDR) is the percentage of borrowers who enter repayment in a given Fiscal Year (FY) who default on their loans by the end of the next FY (the two-year cohort period). For FY 2002, CDR is the number of borrowers who entered repayment in FY 2002 and defaulted by the end of FY 2003, divided by the total number of borrowers who entered repayment in FY 2002. Schools are subject to sanctions if their CDR exceeds 25 percent for three consecutive years, or 40 percent in one year (ED, National Student Loan Default Rates, 2004).
The official CDR in the U.S. is declining – from 11.6 percent for borrowers entering repayment in FY 1993 to 5.2 percent for borrowers entering repayment in FY 2002. In addition, the number of schools subject to sanctions as a result of their CDR has declined from 433 schools sanctioned due to FY 1993 CDR to 1 school sanctioned due to FY 2002 CDR (ED, National Student Loan Default Rates, 2004).
CDR by school sector is also declining. From FY 2000 to FY 2002, CDR decreased from 4.8 percent to 4 percent for public four-year schools, from 9.2 percent to 8.5 percent for public two-year schools, from 3.8 percent to 3.1 percent for private four-year schools, and from 9.4 percent to 8.7 percent for proprietary schools (ED, National Student Loan Default Rates, 2004).
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