Take Key Steps in Reviewing and Appealing Cohort Default Rate Information

USA Funds^® suggests that schools compare their own records with the recently released U.S. Department of Education 2006 draft cohort default rate information for their schools. Schools are advised to take the following steps in reviewing the data and, if appropriate, to submit an incorrect data challenge.

Schools have until April 4, 2008, to challenge the Department’s cohort default rate findings.

1. Download the Department’s Electronic Loan Record Detail Report. The Department offers information about downloading the report.
2. Collect and review any relevant internal enrollment and repayment data. Such data could 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.
   • Data from USA Funds Debt Manager^®.
3. Create a spreadsheet with data about borrowers in the cohort and when they entered repayment, based on the 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. This function eliminates the need to manually analyze all accounts in the cohort and pinpoints only the accounts that may need to be corrected.
   
   If there is data on the LRDR that is believed 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 new 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 offers a Cohort-Default-Rate Appeals section that offers a variety of information about cohort default rate appeals, including a template for inputting data if your school chooses to use the manual appeals process.
   
   Note that you will need to submit a separate incorrect data challenge to each data manager. Each challenge should list only the loans held by that particular data manager.
6. Determine what kind of error you believe has been made. Allegations usually fall into one of 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 your incorrect data challenge. You should maintain the documentation that verifies the receipt of the incorrect data challenge, as well as all electronic and hard copy documentation submitted as a part of the incorrect data challenge process. If the 45-calendar-day time frame for submitting an incorrect data challenge — April 4, 2008 — has not been met, the challenge will not be reviewed.

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