Media Advisory: Financial Aid Experts Available To Discuss New Federal Student Loan Cohort Default Rates

Contact: Erin Timmons
Managing Editor     
(202) 785-6959     

New Data Will Show How Well Student Loan Borrowers Are Managing Their Debt Immediately After Leaving College    


Sept. 15, 2014 -- In the coming days, the U.S. Department of Education (ED) will release the latest-available data on student loan borrowers who fell so far behind on repayments that they defaulted. The National Association of Student Financial Aid Administrators (NASFAA) has experts on hand to provide context on student loan trends and comment on what this key education finance information means for students, taxpayers, policymakers, and institutions. 

Federal student loan borrowers typically must begin repaying their loans six months after graduating or leaving school, and they go into default if they do not make a payment for 270 days, or roughly 9 months. ED calculates annually the percentage of borrowers who default for each school that participates in the Federal student loan program. 

Default rates for a given fiscal year encompass the cohort of borrowers who entered repayment during that year. While cohort default rates were originally only calculated based on the number of those borrowers who defaulted before the end of the following fiscal year (“two-year rates”), the 2011 three-year rate that will be released in the coming days marks the complete transition to only three-year rates.

Since 2005, the percentage of borrowers who have defaulted nationally overall as measured by the two-year rates steadily climbed from 4.6 percent to 10 percent in 2011. The overall national three-year rate increased from 13.4 percent for the 2009 cohort year to 14.7 percent for the 2010 cohort year.

ED’s upcoming release will determine whether the trend has continued, showing the percentage of borrowers whose first loan repayments were due between Oct. 1, 2010, and Sept. 30, 2011, and who defaulted before Sept. 30, 2013. 

Cohort default rates (CDRs) provide a good jumping-off point on understanding how student loan debt can adversely affect students. CDRs can also provide a glimpse into institutional practices surrounding loan debt, and, increasingly, have led some institutions to leave the federal loan programs entirely. In a recent NASFAA survey of 206 financial aid professionals, 9 percent reported working at institutions that no longer offer federal loans to students, 78 percent of whom cited their CDRs as the impetus for leaving.  

NASFAA experts can provide insights into ED’s new data and its own survey findings, and can provide advice for consumers on how to avoid default as well. 

 To set up an interview, please email or call (202) 785-6959.

About NASFAA  

The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit