Nine Key Steps for Reviewing and Appealing Cohort Default Rate Information

With the recent release of 2007 draft cohort default rates, USA Funds^® suggests that schools compare their own records against the information from the U.S. Department of Education. Schools are advised to review the data and, if appropriate, submit an incorrect data challenge by taking the following steps.

1. Download the Department’s Electronic Loan Record Detail Report (DRCO35, School Cohort Default Rate History Report — extract version, message class 4SHCDREOP).
2. Collect and review any relevant enrollment and repayment data. Such data should include the following:
   • Records from the financial aid office or the registrar’s office.
   • Student Status Confirmation Reports or other electronic enrollment reports.
   • Transfer requests for new students and former students.
   • National Student Loan Data System borrower enrollment history or borrower aid history.
   • Lender or servicer records.
3. Create a spreadsheet with data about borrowers in the cohort and when they entered repayment, based on your school’s data. The USA Funds Cohort Analysis Tool^SM helps simplify the process of reviewing loan data and identifying records that may prompt potential cohort default rate challenges. Once the USA Funds Cohort Analysis Tool runs data, it organizes the data in categories and presents it in tabs within a Microsoft Excel document.
4. Compare the internal data against the data on the LRDR. For USA Funds Cohort Analysis Tool users, the tool will double-check time lines, such as when a borrower’s grace period began and ended, and when the student entered repayment. If the tool finds a discrepancy, you can review account information to confirm the accuracy of the data. The function saves time in identifying potential cohort challenges by eliminating the need to manually analyze all accounts in the cohort and pinpoints only those accounts that you may need to correct. If there is data on the LRDR that you believe to be incorrect based on the internal data, you should contest the LRDR data.
5. Put any data believed to be incorrect into spreadsheets to be submitted to your school’s data manager, or access the Department’s eCDR appeals Web-based application. In the Federal Family Education Loan Program, the loan’s guarantor is the data manager. The Department offers information about eCDR appeals. USA Funds’ Web site provides information about cohort default rate appeals, including a template for entering data if your school chooses to use the manual appeals process. Note that a separate incorrect data challenge must be submitted to each data manager. Each challenge should list only the loans held by that particular data manager.
6. Determine what kind of error has been made. Allegations usually fall into one of the following categories:
   • Data incorrectly reported.
   • Data incorrectly excluded.
   • Data incorrectly included.
7. Review and confirm the data. Schools must provide documentation to prove each allegation.
8. Gather supporting documentation.
9. Submit the incorrect data challenge. The Department’s guidelines set a 45-calendar-day time frame for submitting incorrect data challenges. You must submit your school’s incorrect data challenge by April 3 in order for the Department to review it. You should maintain documentation that verifies the receipt of the incorrect data challenge, as well as all electronic and hard copy documentation submitted as part of the incorrect data challenge.

Contact Bruce Bement, USA Funds manager, compliance and investigations, by e-mail or telephone at (317) 806-1256 for more information.