USA Funds Lists Nine Steps for Appealing Draft Cohort-Default Rates

With the U.S. Department of Education’s recent announcement of draft cohort-default rates for 2005, schools are advised to compare the Department’s rates for their schools with their own records to ensure consistency.

Schools that find inconsistencies between the Department’s cohort-default-rate data and their own may challenge the Department’s findings for their schools. The deadline for submitting challenges to schools’ draft 2005 cohort-default rates is April 6, 2007.

The following are nine steps to take to review the Department’s data and, if appropriate, issue an incorrect-data challenge:

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 your school’s data.
4. Compare the internal data you gathered against the data on the LRDR. If there is data on the LRDR that you believe is incorrect based on your internal data, you should contest the LRDR data.
5. Put any data that you believe to be incorrect into spreadsheets to be submitted to your data manager. In the Federal Family Education Loan Program, the loan’s guarantor is the data manager. USA Funds’ Web site offers a “Cohort-Default-Rate Appeals” section that provides a template you can use to input your data.
   
   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 your data. You 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 you do not meet the 45-calendar-day time frame for submitting an incorrect-data challenge — for the 2005 cohort, that deadline is April 6 — the challenge will not be reviewed

The “Cohort-Default-Rate Appeals” section of the USA Funds Web site also offers information about other types of appeals, as well as a time line and sample cover letters.

USA Funds also provides a list of common errors that schools make when submitting cohort-default-rate appeals.

Details about the cohort-default-rate-appeals process also appear in the Department of Education’s Cohort Default Rate Guide.

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