Policy Frequently Asked Question: The Impact of Loans From Previous Schools on Cohort-Default Rates

In the case of a student who defaults after leaving our school, but the defaulted loan was taken for attendance at a different school, which school’s cohort-default rate is affected? Does that loan impact the cohort-default rate of the school for which the loan was taken, or the school that the student last attended?

The U.S. Department of Education calculates the cohort-default rate by considering loans obtained by students attending the school at which the funds were delivered. The school at which the student was last enrolled should not include loans obtained for attendance at a previous school in either the numerator or denominator part of the cohort calculation.

For example, a student attends School A and obtains a Stafford loan. The student transfers to School B, but does not obtain a Stafford loan while in attendance. When the student enters repayment, the student is counted in the cohort rate for School A. If the student obtains two separate loans for attendance at both School A and School B and enters repayment on both loans in the same year, then the student would be in the cohort calculations for both schools.