The official national three-year cohort default rate for 2010 is 14.7 percent, an increase from the 13.4 percent three-year rate for the 2009 cohort. The official national two-year cohort default rate for 2011 is 10 percent, up from the official two-year rate of 9.1 percent recorded for the 2010 cohort.
This year marks the second in which the U.S. Department of Education issued official default rates for a three-year cohort. The Department is transitioning to the three-year measurement from the two-year rate.
For-profit institutions posted an official 2010 three-year rate of 21.8 percent, public institutions 13 percent, and private nonprofit institutions 8.2 percent.
In a news release issued Monday by the Department, U.S. Secretary of Education Arne Duncan said, “The growing number of students who have defaulted on their federal student loans is troubling.
“The Department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students — as well as the business, labor, and philanthropic leaders — to improve college affordability for millions of students and families.”
Also Monday the Department released PDFs and PowerPoint slides with information related to the official national rates.
USA Funds® recorded an official 2010 three-year cohort rate of 9 percent and an official 2011 two-year rate of 5.4 percent.
The Department recently issued individual schools’ official 2011 two-year and 2010 three-year cohort default rates, with an Electronic Announcements providing information about distribution of rates and the appeals process.
Requirements and sanctions
Certain cohort default rates result in required activities and sanctions and loss of eligibility. To learn more about those rules — and exemptions — download the USA Funds fact sheet Understanding the Change to Three-Year Cohort Default Rates.
The Department’s online Default Prevention and Management information provides a variety of cohort default rate figures, including rates by institution type and state.
Default prevention assistance
USA Funds offers a number of tools and solutions to assist schools in lowering cohort default rates. Contact USA Funds to learn ways to prevent default among your current and former students.
The Department offers a Default Prevention Resource Information page with links to a variety of debt management materials.